FY’24 highlights
M&A volume increased but number of deals fell to an eight-year low
In FY’24, the number of announced M&A deals dropped by 14% to 50,247 globally, compared with 58,262 in FY’23. However, the total deal value rose by 10% to USD3.2 trillion, making FY’24 the strongest year for deal-making since 2022. Regionally, M&A activities increased in the US and Europe by 5% YoY and 22% YoY, respectively, with the US accounting for 45% of the total deal volume, the lowest since FY’22. Similarly, with a 1% YoY increase in overall activities, FY’24 was the strongest period for APAC M&A in the last two years. High interest rates, geopolitical tensions, and political uncertainty appeared to impact global M&A activity. Globally, the technology and energy and power sectors led the way, accounting for 16% and 15% of total deal value, respectively, largely driven by mega deals.
Debt capital markets hit an all-time high
In FY’24, global debt capital market (DCM) activity reached USD10.7 trillion, a 20% increase compared with FY’23, making it the strongest annual period for DCM activity since 1980. New DCM offerings rose by 15% YoY to an all-time high of just over 34,000. Investment-grade corporate debt issuances grew by 19% YoY, while high-yield activity surged by 82%, marking a three-year high. Green bond issuance amounted to USD470 billion, up 10% from the previous year, despite a 29% drop in Q4’24 compared to Q3’24. In terms of sectoral activity, all industry sectors saw YoY gains, led by the healthcare, media and entertainment, and technology sectors, each experiencing strong double-digit percentage increases compared to FY’23.
ECM activity reached a three-year high
In FY’24, global equity capital market (ECM) activity rose to USD638 billion, a 19% YoY increase, marking the strongest annual period for global ECM in three years. The US contributed 38% of total issuances, with proceeds up 71% compared with FY’23. Conversely, ECM activity in China fell by 54% YoY, reaching its lowest share of global ECM activity since 2009. Global IPOs, excluding SPACs, amounted to USD113 billion, a 1% YoY decline, making it the slowest annual period for global IPOs since 2009. Despite this, total proceeds from IPOs on US exchanges increased by 54%, a three-year high compared with the previous year. Convertible offerings, totaling USD114 billion, grew by 19% YoY and represented 18% of overall ECM deals. The technology, financial, and industrial sectors were the most active and collectively accounted for 65% of convertible offerings in 2024.
Top five M&A deals (9M’24)
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Date of announcement
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Acquirer’s Name
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Acquirer’s Location
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Target
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Target’s Location
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Value (USD billion)
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Target’s Industry
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Deal types
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|---|---|---|---|---|---|---|---|
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Aug 14, 2024
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Mars
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US
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Kellanova
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US
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29.7
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Consumer
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Cash
|
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Mar 28, 2024
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Home Depot
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US
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SRS Distribution
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US
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18.3
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Retail
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Cash
|
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Feb 19, 2024
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Capital One Financial
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US
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Discover Financial Services
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US
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35.3
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Financials
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Stock
|
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Feb 12, 2024
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Diamondback Energy
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US
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Endeavor Energy Resources
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US
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25.8
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O&G
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Cash & stock
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Jan 16, 2024
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Synopsys
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US
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Ansys
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US
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32.4
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Tech
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Cash & stock
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Investment banks see positive trends after prolonged challenges
In FY’24, investment banking revenues for all banks rebounded due to improved global market conditions, resulting in a surge in equity and debt underwriting activities. The revival of mega deals, increased boardroom confidence from strong earnings, potential interest rate cuts this year, and buoyant markets were key drivers of this recovery. Market performance is anticipated to improve in 2025, driven by pentup demand for M&A and a robust pipeline, provided the macro and geopolitical environments remain stable.
Note: Revenue for Deutsche was converted into USD using the exchange rate as of December 31, 2024.
Revenue for Deutsche Bank reflects revenue from Origination & Advisory services
Bulge bracket investment banks – FY’24 highlights
JP Morgan’s investment banking fees surged by 49% YoY in Q4’24, driven by increased fees across products. Advisory fees grew by 41% YoY in the same quarter, benefiting from large deals and growth in key sectors. Underwriting fees also saw significant rises, with debt increasing 56% and equity growing 54% YoY in Q4’24, primarily due to favourable market conditions. Looking ahead, the bank is optimistic about its pipeline given the positive momentum in the markets.
Goldman Sachs’ investment banking fees grew by 24% YoY in FY’2024, due to significantly higher net revenues in debt underwriting, driven by leveraged finance activity, and in equity underwriting, mainly from secondary and initial public offerings. In 2024, the bank held the top spot in the league tables globally for announced and completed M&A, ranked third in equity underwriting, and second in leverage lending. Despite strong accruals in Q4’24, its investment banking backlog increased sequentially and remains strong, especially in advisory. The bank is optimistic about 2025 and expects more M&A and IPO activity.
In FY’24, Morgan Stanley’s investment banking revenues rose by 35% YoY, driven by strong performance in equity underwriting, advisory revenues, and fixed-income underwriting. Advisory revenues grew by 6% YoY due to more completed M&A transactions. Equity underwriting revenues surged by 80% YoY, thanks to higher IPOs and follow-ons. Fixed income underwriting revenues increased by 52% YoY due to more bond and loan issuances. Looking ahead to 2025, the bank’s M&A pipelines seem healthier and more diverse than in recent years. The bank believes it is well-positioned for a continued rebound in deal-making activity.
Bank of America’s investment banking fees increased by 44% YoY in Q4’24, mainly due to mergers and acquisitions. There was also significant growth in DCM fees, increased by 30% YoY in Q4’24, particularly in leveraged finance, whereas ECM grew by 83% in the same quarter. The business saw a strong rebound in investment banking fees in 2024, which the firm expects to continue into 2025
Citi’s investment banking fees increased by 35% YoY in Q4’24, driven by growth in DCM, ECM, and advisory services. DCM saw benefits from ongoing investment-grade issuance momentum and more leveraged finance activity, while ECM experienced strong issuance activity. Advisory growth was supported by strong client engagement and the completion of previously announced acquisitions, thanks to a favourable macroeconomic environment.
Deutsche Bank’s revenue from its origination and advisory (O&A) business grew by 61% YoY in FY’24, with increases across business lines, which enabled it to maintain its top ranking in Germany. Debt origination and advisory revenues rose by 53% YoY and 78% YoY respectively, in FY’24, reflecting a growing industry fee pool and market share gains from prior investments. For 2025, revenue growth drivers in the investment banking division include realizing the benefits of recent investments and greater client engagement in O&A, ongoing growth in fixed income currencies (FIC) financing, and continued development of a broader FIC platform, with a focus on the US.
UBS’s advisory revenue rose by 43% YoY in FY’24, mainly due to higher M&A transaction revenue while capital markets revenue soared by 53% YoY in the same period, largely due to the accretion of purchase price allocation (PPA) adjustments on financial instruments and other PPA effects. Excluding these effects, underlying capital markets revenue increased by 11% YoY in Q4’24, with gains across all products. The bank remains encouraged by the pipeline in M&A and LCM and its improved position in the Americas, which together are expected to support YoY revenue growth in 2025. Additionally, the bank is more optimistic for revenue growth in ECM productivity later in 2025 and into 2026, considering the timeline of pipeline build.
Advisory firms report strong growth in FY’24
Like investment banks, major advisory firms saw a revival in revenue in FY’24. While most firms acknowledge the heightened risks from current geopolitical, economic, inflationary, and market conditions, they anticipate better availability of debt capital and more deal-making heading into 2025.
Note: Houlihan Lokey’s fiscal year ends in March (represents numbers for nine months ending December-24).
M&A advisory firms – FY’24 highlights
Lazard’s financial advisory revenue grew by 28% YoY in FY’24 due to the increase of its market share in franchise captured business. During and since the start of Q4’24, the firm has been involved in significant and complex M&A transactions worldwide. Also, it anticipates an even more constructive environment for advisory business in 2025, as it remains focused on helping clients successfully to navigate complex deals and investment decisions. Its top-tier restructuring, and liability management practices have handled a variety of complex restructuring and debt advisory assignments. Overall, the financial advisory business has delivered strong performance in 2024, and the firm expects continued strong growth in 2025.
Houlihan Lokey’s revenues grew by 24% YoY in the first nine months of 2025, mainly due to an increase in fee events driven by better M&A activity. The firm’s financial and valuation advisory business is gaining momentum with market recovery. Despite ongoing macroeconomic uncertainties, the firm remains optimistic about this fiscal year, expecting continued improvements in M&A and capital markets activity.
Moelis’ revenue increased by 40% YoY in FY’24 driven by a higher number of transaction completions across all key products compared to the prior year. The firm continues to execute on its strategy of organic growth, and in early 2025 it promoted 12 advisory professionals to MD and hired a Global Head of private funds advisory who will join the firm in the near term. The firm is encouraged by the momentum heading into 2025 and is well positioned to continue delivering for its clients and shareholders.
PJT’s advisory revenues surged by 28% YoY in FY’24, driven by significant increases in restructuring, strategic advisory, and private capital solutions revenues. For 2025, the firm continues to look confident with its improved market presence, increased mandates, and a stronger backlog position. Also, it expects to see higher levels of global M&A activity in upcoming year as activity levels continue to normalize..
Evercore’s advisory fees increased by 24% YoY in FY’24, reflecting higher revenue from large transactions and a greater number of advisory fees earned. Underwriting fees rose by 41% YoY for the same period, due to an increase in the number of transactions the firm participated in. The firm begins 2025 with strong momentum and it expects a gradual improvement in deal-making activities throughout the year.
The road ahead
Financial sponsors to reemerge and lead M&A activity
Over the past three years, higher interest rates have increased borrowing costs and lowered corporate valuations, causing financial sponsors to delay exits. This has created a pent-up supply that is expected to lead to a strong rebound in M&A activity in 2025. Private equity firms will face pressure to sell assets and return money to investors, which in turn will drive them to monetize their assets before raising new funds. Lower valuations for publicly traded companies outside the US also present attractive opportunities for sponsors to deploy their surplus capital.
Corporates poised to pursue capital deployment through M&A
Globally, corporates are shifting from being net sellers to net buyers, with increased corporate activity expected to continue this year. As the Fed’s interest rate target falls to 3.75-4% by the end of 2025, holding cash will become less attractive, prompting corporates to prioritize M&A over dividends and share repurchases. Additionally, a more favorable antitrust and regulatory environment under the new US administration is expected to boost strategic activity in 2025 for deals of all sizes.
Higher cross-border M&A driven by valuation gaps and regional growth
In the past five years, the US economy has outpaced those of Europe and the UK, which may lead European companies to acquire US companies for market exposure. Conversely, US companies may acquire European companies to expand their footprint and benefit from lower valuations. Fast-growing economies in Asia continue to attract private equity firms, and as global M&A momentum accelerates, cross-regional dealmaking in Asia is expected to surge.
High level of activist campaigns expected to continue
With peak interest rates behind and inflation controlled, activism is set to further accelerate this year. Activist funds are raising more capital and targeting larger companies. As geopolitical and market conditions become more favorable for M&A in 2025, activists are likely to target boards for missing M&A opportunities and companies that resolved activist situations in 2024 but continue to underperform may face a second round of activism. A stronger M&A environment, where companies can find buyers more easily, will encourage more activist investors to push for changes at undervalued companies, particularly through corporate separations.
Global shift towards simplification likely to persist
Corporate simplifications will continue to drive M&A as companies aim to highlight undervalued assets, separate divergent businesses, and sharpen geographic focus. Companies will streamline their portfolios, capitalize on secular trends, and rotate capital to increase returns. They are likely to pursue regional separations to target specific investor bases and address the inefficiencies of operating cross-regional corporations. Valuation discrepancies will also encourage M&A by prompting companies to seek more favorable capital markets through new domiciles, listings, or headquarters.
Optimism around the US regulatory reset and industry-focused M&A to continue
The change in the US administration is expected to reduce the overall aggressiveness of federal antitrust agencies’ M&A enforcement efforts. After several years of a challenging regulatory environment for bank M&A, bank regulatory agencies are anticipated to reduce burdens for new entrants and be more receptive to mergers that meet statutory requirements. Industries such as energy, technology, and healthcare, which have seen significant activity in recent years, are poised for more deal-making in 2025 driven by strategic realignments and consolidation. Additionally, the anticipated wave of industry transformation through AI is sparking M&A among technology companies of all sizes.
