UK deal value increased during 2025, with the biggest transactions being underpinned by demand for AI and digital infrastructure. Despite highly uneven market conditions, dealmaking activity was supported by stabilising inflation, improving sentiment and the renewed availability of capital.
That’s according to PwC’s latest Global M&A industry trends 2026 outlook report, which found that overall deal values increased by 12 per cent last year, rising from £117 billion in 2024 to £131 billion. This came in spite of a 12 per cent drop in deal volume, with the number of deals falling from 3,411 in 2024 to 2,991 last year.
According to PwC, this reflects an environment in which buyers are more selective, but willing to pay for high-quality assets, strong technological capabilities and clear potential to create value. Underscoring this, average deal size increased 28 per cent from £34 million in 2024 to £44 million in 2025.
PwC reports “increasing conviction among buyers”, with capital being concentrated on fewer, higher-quality transactions, supported by renewed levels of confidence in key areas of the market.
Lucy Stapleton, Head of Deals at PwC UK, commented: “We would not usually expect deal values to rise so sharply when volumes are falling, which underlines how exceptional current market conditions are. Competition for AI, and technology linked assets remains intense, while growth opportunities across the wider economy are far more challenging.”
Despite deal volumes remaining below the 2021-2022 peaks, PwC analysis found a significant rise in deal preparation activity during 2025 across both corporate and private equity buyers. With valuation gaps narrowing and economic conditions stabilising, this trend is expected to support increased deal activity during 2026.
The report emphasises that much of the momentum in the UK market is driven by the rapid scaling of AI-enabled business models and the infrastructure that supports them. Some of the largest transactions of 2025 were underpinned by strong investor demand for data centres, digital infrastructure and cloud platforms.
Lucy Stapleton said: “After a difficult period for the UK deals market, 2025 marked a turning point. Inflation moved back towards target, interest rates stabilised and confidence gradually returned. We are now seeing clear momentum in the pipeline, driven by strategic transformation agendas, the accelerating impact of AI and the availability of capital, particularly from private credit and large global funds.”
“Companies are preparing more thoroughly, building sharper investment theses and focusing on assets that bring technology capability, accelerated growth and resilience. As this continues, we expect to see more deals crossing the finish line in 2026.”
PwC also provided insights on some of the most prominent sectors for M&A in 2025:
Technology, Media and Telecommunications - The TMT sector saw 590 deals, with activity underpinned by demand for AI, cloud and data-rich assets. While deal volumes dropped, valuations for premium assets increased significantly, with multiples in some areas exceeding historical norms.
Read our deep-dive on M&A activity in the TMT sector
Financial Services - The Financial Services sector delivered a number of 2025’s biggest deals, including major transactions in insurance and asset and wealth management, with values up 44 per cent year-on-year. According to PwC, consolidation and modernisation are defining the industry, with companies investing in next-gen tech platforms.
Find out more about UK financial services M&A
Energy, Utilities and Resources - Despite volumes falling somewhat, deal value increased to £18 billion, driven by investor focus on the energy transition, infrastructure resilience and portfolio rotation.
The UK saw strong renewables M&A in 2025
Consumer Markets and Industrials - The most active sectors by volume (802 and 648 deals, respectively), but both saw reduced activity amid cost pressures, global trade frictions and weak consumer sentiment. Despite this, PwC reports that industrials remained a key area for strategic transformation and consolidation.
Health Industries - Activity across the health sector remained solid, driven by resilient dealmaking in life sciences and healthcare services, as well as strong valuations for specialist, data-driven assets.
Despite the strength of UK valuations, Lucy Stapleton emphasised the challenging conditions that continue to define the market during the early weeks of 2026: “Outside the most structurally attractive areas, activity has been more reflective of the UK’s broader low-growth environment. Buyers remain cautious, and assets require deeper preparation, clearer value-creation plans and stronger proof of resilience before processes move forward.”
Read our in-depth outlook on UK M&A trends for 2026
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