With fluctuating interest rates, changing trade policies, and rapid technological change, mergers and acquisitions, and investment entry and exit strategies are more complex but also more strategic. Dealmaking is not about volume anymore. It is about investing capital with conviction, managing regulatory and geopolitical risks, and aligning deals with long-term value.

Investors in Canada, Asia and the U.S. are all facing similar macro-economic headwinds, but they react differently depending on their region. Canada has seen a renewed interest in mid-market deals and infrastructure projects. The U.S. balances robust private equity with increased regulatory scrutiny and uncertainty over tariffs. Asia, especially Japan, India,  and Southeast Asia, is emerging as the key growth engine for private capital globally, even though China remains complex and focused on domestic issues.

Key Takeaways:

  • Quality over quantity: M&A is shifting to fewer, larger, high-conviction deals tied to long-term themes like AI, infrastructure, and energy.
  • Smarter structures win: Investors are using private credit, partnerships, and structured deals to manage risk, with exits favoring clean trade sales or selective IPOs.
  • Value creation is critical: Returns now depend on operational improvement, digital transformation, and early exit planning, not multiple expansion alone.

Global Context: Fewer Deals, Bigger Bets and Persistent Uncertainty

The M&A landscape has been reshaped by disruptions over the last five years, inflation and rate increases, and geopolitical factors. PwC’s mid-year global outlook for 2025 shows that while M&A volume fell 9% globally in the first six months of 2025 compared to 2024, the overall value of deals rose 15%. The number of transactions over US$1 billion increased, and those above US$5 billion were also up on an annual basis, indicating that large, complex deals continue to be done when there is a compelling strategic rationale.

There are several themes that cross-cut all three regions.

  • Capital is expensive but stable enough to support transactions. Markets have adjusted to the fact that interest rates are still above pre-pandemic and government debt levels remain high. Lenders have become more selective but high-quality borrowers are still able to access financing.
  • AI and digital transformations are driving a new wave in M&A driven by capabilities. Corporations are acquiring data, software, cybersecurity and AI capabilities to reposition business models. M&A is increasingly focused on data centres, cloud infrastructure and energy assets which support AI workloads.
  • Private equity has become a major player, but is under pressure. PwC estimates that there are over 30,000 portfolio companies owned by PE globally. Almost half of these have been held since 2020. The funds must find a balance between the need to deploy large reserves of dry powder and return capital to investors via exits.
  • Private credit has become mainstream. Direct lending and private funds provide flexible capital structures to buyouts and recapitalisations. They also offer structured solutions that banks are not willing to finance.

It is not uncommon for uncertainty to be the norm in a global market of deals. Dealmakers who are successful will be those who integrate macro-risks into valuation, structure and post-merger planning without being paralysed.

Canada: Mid‑Market Momentum, Infrastructure, and Tech Going Private Deals

Canada’s M&A climate has changed from caution to cautious positivity. 

Sector Hotspots across Canada

Canadian M&A activity is centered on several sectors:

  • Mining and essential minerals. Canada’s leadership in the global energy transition, battery supply chains, and other sectors is attracting strategic and financial investors. This is especially true for lithium, nickel and copper.
  • Energy, renewables and infrastructure. Oil and gas transactions are complemented by pipeline, grid and renewable energy deals. Infrastructure investors invest in digital assets such as data centres, telecom towers and utilities.
  • Technology and software. Private equity sponsors, especially those from the United States, continue to show a strong interest in Canadian tech companies and software. This is often done through public to private transactions.

The tech sector has seen a significant amount of private activity. Public valuations are low and domestic tech coverage is thin, which has allowed well-capitalized investors to buy listed companies at a discount. Some recent examples include fintech and software platforms that have been taken private by North American sponsors who are looking to grow and expand multiples over a long-term horizon.

Canada Entry and Exit Strategy

Investors prefer the following entry-level investments:

  • Platform acquisitions that have roll-up potential for critical minerals, industrial service, and vertical SaaS.
  • Models of partnership with Canadian pension funds, infrastructure managers and large capital-intensive assets in which long-term capital is an asset.
  • Multinationals are rebalancing their global portfolios or cutting out non-core Canadian operations.

Private equity funds are now returning to the market after extending their hold period through the uncertainty of 2022-2023. Trends include:

  • Sponsor-to-sponsor sales and trade sales will increase. Full exits are possible for assets that were quietly sold or “soft-tested” in 2024, as financing becomes more predictable.
  • Reopening the IPO market selectively. Larger, mature companies–particularly in infrastructure, renewables, and some tech segments may again consider Canadian or U.S. listings as an exit option. However, this will likely apply to a minority of assets.
  • Private credit is playing a greater role in exit financing. Private credit is being used by buyers to finance leveraged takeovers and secondary purchases, helping sellers reach cleaner exits within a cautious banking environment.

Canada has moved from a holding pattern to a more balanced situation where entry and exit strategies are possible, as long as expectations about valuations are realistic.

United States: Selective Dealmaking amid Regulatory and Tariff Pressures

Dealmakers in the U.S. must now navigate a much more complex market than in the previous cycles. The valuation multiples have been higher in the U.S. than in Europe and parts of Asia. This is especially true in high-growth technology sectors. Antitrust enforcement, uncertainty in trade policy, and changing tariff regimes have a direct effect on deal feasibility.

Deal Drivers and Constraints in the U.S.

The following are the key factors that influence U.S. mergers and acquisitions as well as investment entry or exit strategies:

  • Antitrust and regulatory scrutiny have been intensified. The FTC has tightened its review of large consolidation deals, particularly in industries such as tech, healthcare and other sectors where the transaction could be viewed as entrenching market power. This increases execution risk and delays big-ticket M&A.
  • Volatility in trade and tariffs. Tariffs and tariff proposals on certain products and sectors have created uncertainty in planning, especially for deals that involve a large cross-border supply chain. Some potential buyers have stopped or reduced transactions while they reassess demand and margin scenarios.
  • Strong private credit and equity ecosystems. Even when the syndicated loan market is choppy, large PE funds and alternative asset management firms remain active. They are supported by dry powder, and can structure bespoke private credits solutions.

This has led many U.S. buyers to move away from large horizontal mergers, which are highly scrutinized, and toward smaller, more focused vertical or capability-driven integrations, which can help them transform their position without raising regulatory red flags.

Entry and Exit Strategies in the U.S.

The following patterns are common on the entry side:

  • Capability-led acquisitions. Instead of pure scale, corporations are purchasing software, data, AI and cybersecurity capabilities. AI-native software firms, niche cloud infrastructure and developers’ tools are all examples.
  • Platform-plus-add-on strategies. In markets with fragmentation, such as healthcare, IT outsourcing and specialized industries, sponsors will acquire a strong platform and execute a series of smaller bolt-on purchases.
  • Structured and minority deals. Investors increasingly use convertible structures, preferential equity or minority stakes to gain exposure and manage downside when sellers are more sensitive to valuation or regulatory risks.

The exit side:

  • The strategic sales lead the way. Bain’s mid-year private equity report for 2025 highlights an increase in corporate exits, including several major transactions. Strategics are increasingly relying on M&A as a means to grow and improve capabilities.
  • The IPO window remains open but narrow. Investors are looking for strong, profitable companies in the technology, healthcare and consumer sectors. However, investors will be more concerned with profitability and growth clarity. Any new tariff or rate volatility could quickly slow issuance.
  • Secondary sales and GP-led solutions are tools, not panaceas. While GP-led secondary sales and continuation funds provide flexibility, limited partnerships are increasingly vocal in their preference for straightforward exits over complex fee-heavy structures, even when valuations are more conservative.

Dealmaking in the United States is still alive, but its success depends increasingly on creative structuring and value-creation plans, as well as regulatory foresight.

Asia: Growth Markets and Carve Outs, Governance Reforms

Asia is a key region for mergers and acquisitions, as well as investment entry and exit strategies. However, it is also very heterogeneous. While China’s outbound dealmaking remains constrained by geopolitics and regulation, other markets–particularly Japan, India, and Southeast Asia have become focal points for global capital.

Japan, India and Southeast Asia in Focus

Three themes are prominent:

  • Japan’s corporate reorganization wave. Divestments are driven by governance reforms, increasing shareholder activism and pressure from conglomerates for better capital efficiency. Diversification of non-core divisions or listed subsidiaries is taking place, resulting in a large number of control deals available to both industrial and private equity buyers.
  • India is a story of structural growth. India’s growing middle class, digitization and manufacturing ambitions underpin M&As in consumer goods, financial services and healthcare. Investors combine growth capital and operational value creation plans. They are also increasingly comfortable with control deals and structured minor investments.
  • Southeast Asia is a hub for diversification and economic growth. Indonesia, Vietnam and the Philippines, as well as other countries in Southeast Asia, are attracting investment, particularly in manufacturing, logistics and digital infrastructure. This is part of a strategy called “China+1”, which aims to diversify the supply chain.

Parallel to this, large alternative asset managers and sovereign wealth funds are supporting large-scale energy transition and infrastructure projects in the region. These include data centres, undersea cables, renewables and grid upgrades.

Entry and Exit Strategies in Asia

Entry strategies differ by jurisdiction but include:

  • Joint ventures and carve-outs. In Japan and Korea, there are many joint ventures and management buyouts. International investors frequently partner with domestic sponsors and industrial players in order to navigate cultural and regulatory nuances.
  • Minority stakes that are growth-oriented and offer protection. Investors in India and Southeast Asia often use structured minority investments that include governance rights, downside-protection mechanisms, and staged financing to balance growth potential with risk.
  • Platform-building for digital assets and infrastructure. Long-term capital has been deployed to platforms that aggregate multiple assets, such as portfolios of renewable projects, towers for telecoms or data centres, across different countries.

The same features apply to exits in Asia, but they are also specific to the region.

  • The most common way to sell is through regional and global strategics, particularly in the consumer, financial, and industrial sectors.
  • Timing and market sentiment are important factors in determining the success of local IPOs. The Chinese and Hong Kong IPO markets have been volatile and more selective.
  • Growing use of secondary sales and GP-led transactions. Global and regional funds increasingly use secondary sales, strip sales, and continuation vehicles in order to manage exposure and rebalance their portfolios. They also provide liquidity when faced with longer holding periods or geopolitical risks.

Asia is a continent with many opportunities, but to be successful, you need local knowledge, strong partners and the ability to accept that the exit timing in Asia may not be as predictable as it is in North America.

Convergence of Strategy: Creativity and Discipline with Thematic Focus

In spite of regional differences, sophisticated investors are increasingly convergent in their approach to mergers and acquisitions and strategies for entry into or exiting investments across Canada, America, and Asia.

The following themes are common on the entry side:

  • Thematic investing with high conviction. Capital is allocated to clear structural topics like AI, data, energy and infrastructure transition, healthcare innovations, and resilient business services, instead of purely cyclical investments.
  • More creative deal structures. To bridge valuation gaps, align incentives, and manage risks, standard tools include seller rollovers and preferred equity.
  • Focus on creating value. Buyers are not satisfied with multiple expansions. They expect to be able to improve operations, enable digital transformation, and accelerate commercial growth. AI and analytics are increasingly embedded into post-deal value creation playbooks.

Convergence is visible on the exit side.

  • Preference for liquid assets. Limited partners and corporate board members prefer simple exits, such as trade sales, sponsor to sponsor deals or credible IPOs, over complex partial monetizations.
  • Early and deliberate exit planning. The sellers are engaging with advisors and buyers earlier and preparing their assets more thoroughly. They also consider multiple exit routes simultaneously to manage risks.
  • Use of continuation and secondary funds selectively. These tools are still important for managing portfolio construction and holding periods. However, investors have become more selective about pricing, governance and structure.

The current trends in mergers, acquisitions, and investment entry or exit strategies across Canada, the U.S., and Asia point to a more demanding, but still opportunity rich environment. Higher capital costs, geopolitical uncertainty, and regulatory headwinds mean that capital must be deployed with more discipline, and exits must be planned earlier and more thoughtfully.

For corporates, this is a time to sharpen strategic M&A agendas around clear themes, including AI, infrastructure, and the energy transition, and to use partnerships, divestitures, and carve-outs as tools for repositioning. For private equity and other financial investors, the challenge is to balance the need to deploy capital with the imperative to return it, making both entry and exit decisions with a long‑term, thesis‑driven lens rather than reacting to short‑term market swings.

Those who succeed will likely be the ones who treat M&A as a core strategic capability, not a sporadic tactic, grounded in realism about risk, rigour in underwriting, and creativity in how deals are structured, integrated, and ultimately exited across these key global regions.