- UK deal values up 12% in 2025 as capital concentrates on high-quality, strategic assets
- AI scale-up and infrastructure demand (data centres, cloud, energy) underpin the biggest transactions
- Financial Services leads high-value deal activity through consolidation and tech-driven modernisation
- Broader market remains subdued, with buyers cautious and preparation demands increasing
UK M&A activity in 2025 showed early signs of recovery, but against highly unusual and uneven market conditions. Stabilising inflation, improving sentiment and renewed availability of capital supported activity, according to PwC’s latest Global M&A industry trends 2026 outlook.
The total number of UK deals fell by 12% year‑on‑year to 2,991 (from 3,411 in 2024), while overall deal values increased by 12% to £131bn (from £117bn). This reflects a market where buyers are becoming more selective but willing to pay for high‑quality assets, strong technology capabilities and clear value‑creation potential. Crucially, average deal size rose from £34m in 2024 to £44m in 2025, an increase of 28%.
This divergence between rising values and falling volumes signals increasing conviction among buyers. Capital is being concentrated on fewer, higher‑quality opportunities, supporting renewed confidence in key market areas.
Although announced deal volumes remain below the peaks of 2021–2022, PwC analysis shows a notable rise in deal preparation activity through 2025. As valuation gaps narrow and macroeconomic conditions stabilise, this increased preparation, across both corporate and private equity buyers, is expected to support an uptick in deal announcements in 2026.
Much of the emerging momentum across the UK market is being driven by the rapid scaling of AI‑enabled business models and the infrastructure required to support them. Demand for data centres, cloud platforms and energy‑intensive digital infrastructure has underpinned some of the largest transactions of 2025, reflecting investors’ focus on long‑term, structurally attractive themes.
Lucy Stapleton, Head of Deals at PwC UK, said:
“We would not usually expect deal values to rise so sharply when volumes are falling, which underlines how exceptional current market conditions are. Competition for AI, and technology linked assets remains intense, while growth opportunities across the wider economy are far more challenging.
“After a difficult period for the UK deals market, 2025 marked a turning point. Inflation moved back towards target, interest rates stabilised and confidence gradually returned. We are now seeing clear momentum in the pipeline, driven by strategic transformation agendas, the accelerating impact of AI and the availability of capital, particularly from private credit and large global funds.
“Companies are preparing more thoroughly, building sharper investment theses and focusing on assets that bring technology capability, accelerated growth and resilience. As this continues, we expect to see more deals crossing the finish line in 2026.”
Sector insights: AI‑driven demand and macro pressures reshape activity
Rising deal values, even as transaction numbers fell, pushed average deal sizes higher across most sectors, revealing a market increasingly focused on fewer, more strategic, high‑quality assets.
Technology, Media and Telecommunications saw 590 deals, underpinned by continued demand for AI, cloud and data‑rich assets. While volumes were down year‑on‑year, valuations for premium assets rose significantly, with multiples in certain technology and professional services segments exceeding historical norms.
Financial Services delivered several of the UK’s largest deals of 2025, including major insurance and asset & wealth management transactions, with deal value rising 44% year‑on‑year. Consolidation and modernisation continue to reshape the sector as firms invest in next‑generation technology platforms.
In Energy, Utilities & Resources, deal value climbed to £18bn despite modestly lower volumes, reflecting investor focus on energy transition, infrastructure resilience and portfolio rotation.
Health Industries remained stable with 194 deals, supported by resilience in life sciences and healthcare services and strong valuations for specialist, data‑driven assets.
Consumer Markets and Industrials remained the most active sectors by volume, with 802 and 648 deals respectively, though both saw lower activity due to weak consumer confidence, cost pressures and global trade frictions. Industrials remained a key area for strategic transformation and consolidation.
Capital concentration and private credit reshape the market
The UK market in 2025 was increasingly shaped by the concentration of capital among the largest global private equity funds and the rapid expansion of private credit, which has become the fastest‑growing financing channel for large-cap transactions.
Private credit continues to replace traditional corporate lending in many processes, providing new forms of flexibility but also introducing heightened risk and increased regulatory attention.
Lucy Stapleton continued:
“Outside the most structurally attractive areas, activity has been more reflective of the UK’s broader low‑growth environment. Buyers remain cautious, and assets require deeper preparation, clearer value‑creation plans and stronger proof of resilience before processes move forward.”
Top UK deals of 2025
Significant transactions during the year included major activity in mining and metals, insurance, financial services and manufacturing. For UK outbound deals, the Anglo American’s £15.2bn acquisition of Teck Resources’ Canadian operations, was a notable highlight. Other major transactions included Athora’s purchase of PIC Group, multiple insurance sector acquisitions.
ENDS
Notes to editor
PwC’s Global M&A Industry Trends is a semi-annual analysis of global deals activity across six industries — consumer markets (CM), energy, utilities and resources (EU&R), financial services (FS), health industries (HI), industrials and services (I&S), and technology, media and telecommunications (TMT).
About the data
Our commentary on M&A trends is based on data from industry-recognised sources and PwC’s independent research and analysis. Certain adjustments may have been made to source information to align with PwC’s industry classifications. United Kingdom deal value and volume data is based on officially announced M&A transactions, excluding rumoured and withdrawn transactions, as provided by the London Stock Exchange Group (LSEG). Data is as of 31 December 2025 and was accessed between 1 and 8 January 2026. 2025e is a PwC estimate to improve year-on-year comparability, adjusting December 2025 for a reporting lag. 2025e does not represent a PwC forecast
UK M&A values were converted to GBP using the GBP/USD 2025 average rate of 1.244
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