2025 Brings New Opportunities for Corporate M&A

The corporate sector faced a challenging 2024, as uncertainty loomed over the first half of the year, particularly following the snap election and change of government in July. By autumn, the newly elected Chancellor of the Exchequer, Rachel Reeves, implemented a budget that left many business owners facing “difficult decisions”. With increases in Capital Gains Tax (CGT), Business Asset Disposal Relief (BADR), and employer’s National Insurance Contributions, business costs are set to rise, creating a financial environment that prompted some sellers to accelerate deals in advance of anticipated changes in April 2025. 

Despite these challenges, the UK M&A landscape showed resilience, marked by an impressive rise in high-value M&A transactions that bolstered investor confidence. While deal volume lagged slightly behind the surge in transaction value, the substantial increase in M&A activity reflects a stable, forward-looking investment climate.  

Altius Group’s recognition in the Top 10 of most active advisors in the UK underlines the firm’s position within this growth in M&A and rising market confidence. As part of Altius Group, Altius Corporate Finance solidified our position as a leading broker for corporate transactions in the UK. Highlights in 2024 include the sale of Switch Health Ltd, one of the UK’s leading health insurance brokers, to Partners&, and Forerunner Personal Catering Ltd, a Dorset-based school catering business, to Canonbury Group. 2024 also saw the sale of Colmworth Electronics Ltd, a leading electronics supplier and manufacturer in Cambridgeshire, to Cyclops Electronics Ltd, part of the global Cyclops Group. 

The Road Ahead: Economic Forecasts for 2025 

The economic outlook presents both cautious optimism and considerable complexity. UK inflation, forecast to climb to 3% in early 2025, continues to drive the Bank of England’s more conservative stance on monetary easing. Interest rates are expected to remain steady. Although the forecasted GDP growth of 1.2% suggests a modest recovery, the rising unemployment rate, projected to surpass 4.3% in 2025, could affect consumer spending and impact sectors reliant on domestic demand. However, as business investment picks up thanks to successive interest rate cuts, the growth outlook could give firms renewed confidence to pursue investment and expansion plans. 

Corporate M&A Outlook 

As such, the corporate M&A landscape is poised for significant transformation in 2025, shaped by key economic, technological and regulatory drivers. Increased liquidity and investor confidence are driving momentum, with the technology, media and telecoms (TMT) sector leading the charge. According to Experian, TMT accounted for approximately 25% of deal volume and 30% of aggregate deal value, underscoring its dominance. 

As we have seen in 2024, AI and advanced analytics will continue to reshape M&A dynamics in the next year, streamlining due diligence and enabling innovative partnerships. In competitive sectors such as technology, healthcare, and renewable energy, these tools are fostering strategic collaborations and unlocking new revenue streams. 

We expect that private equity will play an increasingly prominent role in the SME M&A landscape. Creative deal structures and cross-border acquisitions are anticipated to grow as firms seek diversification and entry into new markets. High-growth sectors remain a primary focus, promising robust opportunities for strategic acquisitions that enhance operational efficiency and portfolio expansion.  

As the year unfolds, adaptability, technological adoption and a forward-thinking approach will be crucial for business owners to capitalise on these transformative trends. 

Strategic Planning  

Business owners and investors alike will need to approach the year ahead with careful planning and strategic foresight. The broader economic outlook and planned increased in CGT and BADR underscore the importance of well-timed exits and acquisitions, particularly as valuations and market confidence remain strong. 

At Altius Corporate Finance, we are dedicated to offering you the insights and resources to make informed decisions in this dynamic market and look forward to collaborating with business owners to support their exit and acquisition objectives during 2025. 

*This article is an adapted excerpt from Altius Corporate Finance’s 2025 Business Insights Market Report, which can be viewed here.

If you have questions about your business sale or acquisition and the process involved, please feel free to contact a member of our team.

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