The start of 2025 saw cautious optimism in the consumer and retail merger and acquisition (M&A) world.
After a volatile 2024, many dealmakers expected the new year to bring stability: a return to fundamentals, a rebound in cross-border flows, and a release of pent-up dry powder. Instead, they encountered something different: a pause that never quite ended.
Each quarter delivered fresh disruptions, from unexpected tariffs and geopolitical escalations to macroeconomic churn. While sentiment showed signs of recovery, intermittent waves of uncertainty introduced caution. Rather than a sharp downturn, the market experienced a gradual recalibration, with global deal volumes easing by 10 percent year-on-year. Notably, deal value rose by approximately 24 percent, though some of this reflects a few big-ticket deals.
Within the broader decline in deal volumes, 2025 has continued to see some blockbuster deals that highlight strategic clarity in specific niches. One of the most notable announcements was Prada’s US$1.4 billion proposed acquisition of Versace, to capitalize on the latter’s strong brand equity and global appeal. This deal reflects the luxury sector’s trend towards global consolidation.
Similarly, L’Oréal’s US$1.1 billion capture of Medik8 reinforced the company’s intent to scale in the premium skincare segment. The purchase elevates L’Oréal’s luxury offering while tapping into booming demand in Asia and other emerging markets.
PE firms continue to adopt a strategic lens, pursuing opportunities in corporate carve-outs and operational turnarounds. For instance, the ongoing Walgreens Boots divestiture attracted strong interest from PE players, who seek to unlock value in businesses where they can bring in operational expertise and scale efficiencies. Six of the top ten deals by value in 1H 2025 involved PE buyers.
No article on M&A trends in 2025 can stay silent on the clear elephant in the deal room. Tariffs have emerged as one of the most unpredictable challenges to M&A. Companies such as Crocs, Mattel, P&G, and PepsiCo have all revised growth forecasts due to disruptions in global supply chains and shifting cost structures.
The uncertainty is not just about current tariffs but also potential new rounds, causing volatile earnings guidance and complicating long-term planning. Deals are being delayed as buyers and investors reassess financial models, pricing assumptions, and margin projections.
A Philippine Perspective
Philippine dealmakers welcomed 2025 with optimism, with total deal values reaching US$8.6 billion across 113 transactions, marking a 37% increase from the previous year with 113 recorded transactions. Notably, a major Philippine food corporation acquired a 70% majority stake in a South Korean coffee chain last year, and a 70% stake in a Taiwanese food company, bringing to light an appetite that is expanding beyond Philippine shores. Meanwhile, a leading specialty retailer from the Philippines is bringing a popular UK athleisure brand to local consumers. This strategic expansion will ensure access to globally competitive retail experiences and exemplifies the inherent enthusiasm that can be observed in the M&A activity of local companies.
Recent regulatory developments, such as the Capital Markets Efficiency Promotion Act (CMEPA) improve liquidity and investor confidence, which can help retailers and consumer firms finance acquisitions more cheaply, while the Philippine Competition Commission’s adjustment of notification thresholds, further signal efforts to keep the investment climate responsive and aligned with market growth.
“From automation to zero-code platforms, insurers in the Philippines are exploring tools that allow them to move faster and more efficiently, but they must also tailor these efforts to the realities of our fragmented and price-sensitive market.”
The challenge now is for insurers to scale these solutions in ways that fit the needs and behaviors of Filipino consumers, many of whom are still uninsured or underinsured. Technology may offer the bridge that finally brings insurance into the mainstream.
This excerpt was taken from the KPMG Thought Leadership publication “Insurance Transformation: The New Agenda”.
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This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or R.G. Manabat & Co.