Making accurate predictions today about the global economy is harder than ever, but well-executed programmatic acquisitions can still create value.
National economies face a greater degree of uncertainty than ever before, according to senior partners and global co-leaders of McKinsey’s M&A practice Jake Henry and Mieke Van Oostende during a recent McKinsey Live. Following a three-year slide in global M&A activity, the pace accelerated in 2024 and expectations were high for M&A rejuvenation in 2025. Then a combination of economic shocks put most M&A on hold: inflation, high interest rates, a global energy crisis, rising geopolitical tensions, value-chain disruptions, and regulatory tightening. Of particular concern to executives and dealmakers are fluctuations in global trade policies, including tariffs, because they engender economic anxiety and complicate asset valuation.
While most executive committees are unlikely to proceed with big, strategic, and transformative deals at this time, two decades of McKinsey research show that even in turbulent times taking a programmatic approach to dealmaking—that is, pursuing multiple small or medium-size acquisitions each year as part of a growth strategy—maximizes the likelihood of an acquirer’s generation of excess total returns to shareholders with comparatively low risk. In the aggregate, programmatic acquirers across sectors and geographies have outperformed their peers that did not pursue M&A as part of their strategy, as well as selective dealmakers.
Even today, opportunities exist for proactive and creative dealmakers to make successful programmatic acquisitions. Pent-up demand is substantial, and an estimated $2.1 trillion in dry powder is available. Moreover, private-equity firms, which have engaged in fewer deals in recent years, are eager to make deals again.
A winning acquirer creates a well-defined M&A blueprint aligned with strategic goals and reallocates capital accordingly. Success requires internal conviction and strong deal execution capabilities. Cultural fit is prioritized to ease integration, while nonstrategic holdings are divested to focus on high-value opportunities. Identifying key roles early ensures stability, and contingency planning prepares the company for integration risks. Programmatic acquirers treat M&A as a continuous capability, supported by dedicated teams and defined processes. This disciplined, proactive approach to acquisitions helps maximize value creation and long-term growth.
Q&A from the session
1. What is the benefit of acquiring or merging when there is so much uncertainty?
In an era of heightened uncertainty, strategic acquisitions and mergers can offer significant advantages. Companies that adopt a programmatic approach—executing deals aligned with a clear strategic vision—tend to outperform their peers, even during volatile periods. These deliberate strategies enable firms to capture increased synergies, particularly in cost and revenue. Moreover, alternative deal structures like joint ventures and alliances provide flexibility, allowing organizations to navigate market fluctuations while accessing new capabilities and markets. Ultimately, purposeful M&A can be a powerful tool for long-term value creation amid uncertainty.
2. Where do you see AI tech impacting each phase of the M&A value chain in the coming years?
Generative AI is transforming each phase of the M&A value chain. In sourcing, AI accelerates target identification by analyzing large datasets, uncovering opportunities that align with strategic goals. During due diligence, it automates document analysis, identifies risks, and drafts key legal documents, enhancing efficiency. In integration, AI provides real-time guidance, harmonizes policies, and identifies synergy opportunities, ensuring smoother transitions. Post-transaction, it evaluates deal performance and refines internal capabilities. By embedding AI across these stages, organizations can execute M&A strategies more effectively, even amid uncertainty.
3. With the impact of the new tariffs, what significant changes do you foresee in the M&A landscape?
The recent surge in U.S. tariffs has disrupted the M&A landscape. Companies face heightened costs and supply chain uncertainties with the U.S. imposing tariffs up to 25% on imports from key trading partners. This has led to a slowing of global M&A activity, with deal count down around 45% year-over-year in April. Despite this, investment banks are expanding their financial sponsor teams, indicating a strategic bet on a market recovery. Meanwhile, as sectors look to strengthen and localize supply chains, a wave of consolidation could occur. Companies may need to assess their relative positioning and consider strategic actions to navigate the evolving trade environment.
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For more on this topic, see M&A Annual Report: Is the wave finally arriving? as well as the articles “Uncertainty in M&A: Postcards from the new normal,” “CEOs in M&A: Five actions only chief executives can take,” “Gen AI: Opportunities in M&A,” “Unlocking value from technology and AI for institutional investors,” and “Global Private Markets Report 2025: Private equity emerging from the fog” and the chart “2024’s M&A momentum,” all on McKinsey.com.