The recovery of M&A activity is just beginning, and there are several compelling reasons to be optimistic about what’s ahead. With the Federal Reserve continuing to ease its restrictive monetary policies, the cost of capital is declining, which will provide more favorable conditions for deal-making. Coupled with a resilient economy and a historic backlog of transactions following nearly three years of subdued deal flow, the stage is set for a strong recovery in M&A.

According to strategists, the results of the US presidential election add another layer of optimism, as federal regulators had imposed more restrictive policies on M&A under the outgoing administration. This created hurdles for business combinations and further complicated an already difficult market. In contrast, projections indicate that a pro-business agenda, which includes tax cuts and regulatory reforms, will likely create a more favorable environment for corporate consolidation in the years ahead. These changes are likely to drive further momentum in a deal-making market that is already poised for recovery in 2025.

As we look ahead, the best time to start preparing for a potential transaction is now. With a more crowded and competitive market expected in the near future, companies that invest in thorough preparation today—whether by optimizing financials, addressing regulatory concerns, or refining strategic goals—will be best positioned to capitalize on the opportunities ahead in this rapidly recovering M&A landscape.