Goldman Sachs' Stephan Feldgoise on M&A landscape: One of the highest $10B+ transaction years YTD

M&A Market Update: Goldman Sachs Perspective

Key Concepts:

M&A (Mergers and Acquisitions)
IPO (Initial Public Offering)
Private Equity
Private Credit
Acqui-hire/Reverse Acqui-hire
Corporate Strategy
AI (Artificial Intelligence)
Scale
Deregulation

M&A Market Performance and Outlook

First Half 2025 Performance: M&A volumes at Goldman Sachs were up 50% in the first half of 2025, while the overall market was up about 30%. This exceeded initial expectations of a 10-15% increase.
Deal Size: The $1 to $5 billion deal category has been particularly strong. The second quarter of 2025 saw a significant increase in deals valued at $10 billion or more, making it one of the highest years for such transactions.
Geographic Distribution: Activity has been robust across all geographies, with Europe being particularly active. The Americas have also seen strong activity in the $1 to $5 billion range.
Sector Distribution: M&A activity is occurring across all sectors.
Second Half 2025 Expectations: A survey of 700 companies revealed that over half consider M&A a core part of their strategy for the second half of the year.

Drivers of M&A Activity

Post-COVID Repositioning: Companies are using M&A to reposition themselves after the COVID-19 pandemic, addressing supply chain issues and seeking scale.
AI Integration: The advent of AI is driving M&A as companies seek to acquire scale, technology, and data (organized data) to leverage AI effectively.
Cost Reduction and Revenue Scale: M&A is being used to achieve cost reductions and broader revenue scale.

Talent Acquisition Strategies

Acqui-hire and Reverse Acqui-hire: The practice of acquiring companies primarily for their talent (acqui-hire) or hiring key talent from competitors (reverse acqui-hire) is discussed.
Impact on M&A: While talent acquisition is important, it is argued that the broader M&A market is driven by factors beyond just talent, such as assets, scale, and customer base.
Long-Term Perspective: While there may be periods where individual talent has a significant impact, the long-term success of corporate franchises depends on more than just talent.

Private Equity and Private Credit Markets

Jamie Dimon's Concerns: Jamie Dimon's concerns about the hot private equity and private credit markets are mentioned.
Goldman Sachs' Perspective: Private credit is viewed as a market that meets a client need and has been around for a long time (e.g., through mezzanine funds).
Transparency: The need for transparency in the private credit market is emphasized.
Market Dynamics: Private credit allows for direct negotiation and serves specific purposes.

Conclusion

The M&A market is experiencing a resurgence, driven by factors such as post-COVID repositioning, AI integration, and the need for scale. While talent acquisition strategies like acqui-hire are relevant, the broader M&A market is influenced by a wider range of factors. The private equity and private credit markets are also playing a role, with a need for transparency and a recognition of their established presence.