M&A in a New Economic World Order

The tariffs announced on April 2, 2025, marked the end of the beginning for a new economic world order. The effect on dealmaking has been swift, with strategic M&A dropping by 39% in April. Now, as companies wrestle with the immediate and long-term impacts on strategy and the rising risk of recession, those that thrive will rapidly retool for a world in which the free movement of goods, capital, IP, and people cannot be taken for granted. As in previous periods of uncertainty, leaders will use the potentially vast changes ahead as an opportunity to expand their competitive advantage through M&A.

Here are questions every CEO should ask about the 2025 M&A agenda:

Have we pressured tested our corporate portfolio in light of the rising geopolitical uncertainty? Is our business as resilient as we think it is?

• How does our footprint compare with competitors? Where do we have a competitive advantage and relative risk in a trade war?
• Where should we be doubling down on our portfolio? Where are we out of the money?
• Where can we see opportunities and options that will position us for the next decade?

Is our organization, including the board, aligned with the role of strategic M&A in the business? And are we poised to take advantage of dislocations through M&A?

• Have we updated our M&A game board and outside-in view of priority targets?
• Are we proactively engaging with potential sellers while others wait and see?

Do we have capital flexibility to seize the opportunities that volatile worlds always present? Could we jump on a deal for the taking?

• What is our financial headroom for capital needs and balance sheet flexibility?
• Are we considering alternative deal structures that create options?

Do we have the right diligence skills for doing business in this environment?

• Do we understand the impact of tariffs on value chain pricing and end customer demand, both for potential targets and competitors?
• Do we understand the impact of generative AI on sector and target profit pools?