North American M&A activity cools in Q2 2025

US and Canadian M&A activity slowed in the second quarter as companies increasingly adopted a more cautious approach to dealmaking amid ongoing economic uncertainty.

There were 3,908 M&A deals announced by North American companies with an aggregate transaction value of $409.60 billion in the second quarter, falling respectively by 12.44% and 1.98% from the first quarter, according to the latest S&P Global Market Intelligence data. Compared to the second quarter of 2024, transactions declined by 13.41% but total deal value surged nearly 33%.

The Trump administration's proposal to impose broad-based tariffs on most trading partners rattled global markets and corporate outlooks in April. Markets have since appeared to shrug off tariff fears since May, as the US has not committed to a clear trade policy path.

Dealmakers now may be more concerned about economic policy when assessing near-term M&A decisions, while better-prepared companies could view tariff policy updates as opportunities instead of obstacles, said Kevin Desai, deals deputy platform leader and private equity sector leader at PwC US.

"If you have a strong understanding of your value chain, and how these external factors are going to affect your value chain, you can move and pivot quickly using M&A as a lever to diversify supply chains, acquire a different customer base or pursue another strategy," Desai said in an interview.

The second-quarter slowdown in M&A activity and deal prospects for the remainder of the year may also be clouded by elevated interest rates. This uncertainty is tied more directly to US Treasury yields than speculation regarding the US Federal Reserve’s potential cuts to its benchmark fed funds rate.

"If you look at what happened with the last few fed funds rate cuts, the 10-year Treasury yield did not come down," Desai said. "Buyers are often financing somewhere much closer, if not above, that 10-year yield rate. They're not financing near the fed funds rate if the 10-year doesn't move with the fed funds rate."

The 10-year US Treasury note yield during the second quarter exceeded 4.50% in May before ending the quarter at 4.24%. This was higher than its yield of 3.91% at the beginning of September 2024 before the Fed slashed its benchmark rate by 1 percentage point over the final months of 2024.

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Largest deals

The announced merger of Charter Communications Inc. and Cox Communications Inc., valued at $36.70 billion, was the largest transaction of the second quarter. The combination of the two cable operators will form the largest US cable TV and broadband provider.

Through the first half of 2025, the cable operators' merger is the second largest deal by value behind Sycamore Partners Management LP's plan to acquire Walgreens Boots Alliance Inc. in a take-private transaction valued at $42.63 billion.

The 10 largest North American M&A deals announced during the first half of 2025 are cumulatively valued at $220.65 billion. Six of these deals were announced in the second quarter.

Sector activity

Only the real estate and materials sectors recorded a higher number of announced M&A deals in the second quarter relative to the first quarter. Conversely, deal activity slowed the most in the industrials sector, down to 681 transactions from 819.

However, aggregate transaction value increased in five of the eight sectors tracked in Market Intelligence's data analysis. The largest increase was recorded in the financials sector, with the total value of transactions up nearly 75% at $59.77 billion.

Meanwhile, the aggregate transaction value of M&A deals in the materials sector plunged more than 61% quarter over quarter to $7.65 billion, the largest drop among the eight sectors.