The UK’s corporate finance and M&A landscape in 2025 was defined by resilience, adaptability and a renewed sense of opportunity. There was a rebound in activity with rising deal values in the second half of 2025.
Our Deals team completed on 257 deals with a disclosable value of £10.9 billion. We’re proud to be ranked as No1 Financial Due Diligence provider (Mergermarket 2025) and No1 Financial Adviser (Factset 2025).
Private equity deals accounted for over 61% of our deal volume, but we were also encouraged by the increase in activity on the capital markets. You can find out more about our predictions for private equity in 2026 and our Capital markets forecast.
Uncertainty has become a defining feature of the market. Significant Budget announcements, shifting tariff regimes, and global economic headwinds have made investors and dealmakers more cautious. Investment committees have responded with increased scrutiny, particularly in the face of US tariff issues and the broader macroeconomic volatility. Despite the challenges in 2025, there is a sense of measured optimism for 2026, with interest rates appearing more stable and falling and a reset of growth expectations. We are expecting the strongest year for capital markets and M&A since 2021.
Private equity remains a key driver of deal activity. The prevalence of bolt-on acquisitions, where PE houses enhance portfolio value by acquiring complementary businesses, has continued. Continuation vehicles and innovative deal structures designed to mitigate risk and reward performance have also become more common.
The unpredictability of the market has led to innovative approaches. Flexible capital and other pragmatic solutions are being deployed to address distressed situations and maintain deal flow. Direct lending has become more prominent, and our debt advisory services have seen a notable uptick reflecting those evolving client needs.
Although overall deal volumes contracted in 2025, several sectors continued to deliver strong deal activity by volume. Financial Services, Healthcare, Life Sciences Pharma & Biotech, Professional and Business Services and Technology, Media and Telecommunications, all maintained robust levels of activity. Our Manufacturing and Engineering deals have also doubled in a busy market.
Regionally, the Midlands and Scotland have been particularly active with M&A activity supported by a trend towards smaller deals and bolt-on acquisitions for private equity platforms. Organic growth remains challenging, making strategic acquisitions an attractive route for expansion.
In response to suppressed deal volumes, lenders are working hard to differentiate themselves, secure deal flow and protect their incumbent positions. They are offering additional flexibility around terms and structure. Direct lenders have noticeably tightened on pricing.
We are increasingly being approached by sponsors seeking to take advantage of the borrower-friendly market conditions by amending existing debt facilities to optimise capital structures in portfolio companies. These processes are an interesting test of lender behaviour and lenders are reacting positively to even the implicit threat of a refinancing. In these instances, a debt advisor can benchmark any proposal to market and prepare papers that rationalise the position so lenders can effectively ‘copy and paste’ into their credit papers.
The range of debt structuring options continues to expand as direct lenders follow varied strategies to deliver risk-weighted returns. This is particularly relevant in more stressed/stretched situations, where unsupportive lenders can be refinanced by funds who can price the risk differently and offer innovative solutions.
Thorough deal preparation and robust diligence remain critical. Buyers and investors are demanding and scrutinising strategies on cyber security, AI and ESG. As has always been the case, early engagement with M&A teams and due diligence, debt and integration specialists is key. Together, they can plan for a transaction by addressing potential challenges and supporting value drivers.
Actionable recommendations, including entry into new markets and international expansion, are now standard from Day 1 in effective post-deal integration and value preservation.
Immediate post-deal operational activity, such as 100-day plans and management team readiness, has become the norm. Due diligence teams are increasingly being asked to contribute actionable recommendations.
In a market where deal value needs to be delivered quickly, the 100-day plan has become a pre-deal, rather than post-deal, discipline. The most successful buyers use it as a mechanism through which diligence findings are translated into operational choices and priorities through the first 100 days. Done well, the 100-day plan becomes the bridge between valuation and execution – it defines clear ownership, priorities, and timelines. It also defines measurable outcomes and supports quick wins.
There is more appetite for Commercial Due Diligence (CDD) early in the deal process, particularly from buyers. The purpose is to test the robustness of the specific markets the target operates in or tries to address, understand the positioning of the target, the sustainability of its differentiation as well as defining potential opportunities. There is also demand for a spectrum of early-stage scopes, ranging from red-flag sprints to delivering full scope CDD. We are also being asked to kick off sell-side CDD at ever earlier stages. This is so our findings can feed into and sense-check management plans prior to finalisation and diligence.
Tax asset valuation has grown in importance. Buyers are more willing to attribute value to tax losses if sellers can demonstrate their usability. This trend is particularly relevant for mid-market deals, where revised FRS 102 has had a notable impact.
The changes to Inheritance Tax (IHT) were hotly discussed in 2025. There were changes to allowances for Agricultural Property Relief and Business Property Relief in December 2025 so there is some uncertainty around long term government policy. IHT could feature prominently in transaction discussions in 2026.
Cybersecurity is a value driver in the 2026 deal landscape. Key issues include:
Due Diligence depth
Buyers now carry out more thorough technical reviews, concentrating on data lineage, model reliability and clear warranty coverage for technology and intellectual property.
Regulatory drivers
The implementation of the EU's NIS2 Directive and Cyber Resilience Act (CRA), effective January 2026, is driving more compliance-related acquisitions, especially within the OT and IoT sectors.
Identity
Identity management now key to central management of AI and important in securing AI going forward. Effective management of non-human identified will drive future value.
ESG remains a key value driver and risk factor in deals even though there was a temporary decline in focus due to market conditions. Upcoming UK legislation is expected to reignite ESG discussions and requirements. Private equity scrutiny of ESG remains high. Integrated ESG, FDD, and tax diligence continues to be performed on select deals. Buyers and investors expect robust ESG strategies and data as part of exit and investment processes.
International inbound deals, particularly from the US and APAC, have increased, contributing to the overall strength of the UK market.
The UK deals market in 2025 has shown remarkable resilience and adaptability in the face of geopolitical and economic challenges. As we look to 2026, businesses should prioritise early preparation, rigorous diligence and granular 100-day plans to capitalise on emerging opportunities. For a deeper dive into sector trends, market dynamics, and specialist insights, scroll down to our Deal Matrix and Sector Insights sections.
Looking ahead, several key themes are set to shape the market:
Despite recent volatility, ESG remains a critical lever for dealmakers, with high ESG maturity often signalling superior asset quality.
Discover our comprehensive guide to the 2025 trends and shifts in M&A activity in key economic sectors. You can find out more about emerging market opportunities, trends, and predictions for 2025, including our PE trends for 2026.
