UK dealmakers unprepared for M&A recovery

More than half of UK dealmakers expect deals to increase, despite a record slow start in an unstable 2025. But six-in-ten HR  teams feel underprepared to handle acquisitions, suggesting integration may be an issue amid heightened activity.

British business has done its best to drum up interest in the economy among investors going into 2025. But for all the talk of slowing inflation, an allegedly decisive election result and rising public investment in digital infrastructure, the opening months of the year have been listless, in terms of M&A activity.

Research from Refinitiv showed that only 1,209 deals involving UK companies occurred in the first quarter of 2025: the lowest since 2017. At the same time, the value of deals that had any kind of UK involvement dropped 60% year-on-year to £38  billion.

Despite this alarmingly sluggish start, however, a new poll from WTW suggests dealmakers remain moderately upbeat about their prospects. WTW surveyed over 80 HR leaders, based in North America, Europe, the Middle East and Asia Pacific, involved in their organisation’s deal-making – and while it is in their interests to suggest that they will be busy in the coming months, a 54% majority said they expected M&A to pick up before the end of the year.

The global advisory also found that only 19% of respondents expect deal activity to decrease. According to WTW, this suggests “a wave of deals forthcoming once markets stabilise”. And while that “once markets stabilise” may prove to be load-bearing, should that come to fruition, firms will need to plan to make the most of the opportunity.

WTW found that HR teams felt they were under increasing pressure, with 65% feeling less than fully prepared to handle their deal portfolio. Around 66% of survey respondents viewed data completeness, quality and integrity as their top due diligence challenges

Meanwhile, 78% identified key talent with unique or special skill sets below executive level as their highest due diligence priority. With many firms keen to fill out their workforce with digitally-capable talent, this saw non-executive talent retention identified by 50% of respondents as the top sign of integration success – well ahead of leadership retention on 29%. With this being said, though, respondents were again suggestive of their company losing track of this priority – 74% of non-US and 54% of US companies stating that aligning cultures remains the overall top challenge.

Jim Plomer, senior director for integrated global solutions in M&A with WTW, said, “Low deal volumes during the first half of 2025 suggest pent-up demand fuelling a new wave of deals when market stability improves. However, a majority of companies have expressed concern about their level of preparedness for future transactions, exacerbated by the possibility that timelines will need to be accelerated if the objective is to complete by year-end. The role of HR should already be in full swing even before M&A discussions take shape, looking at the culture, the people, their values and whether they will fit. Proactively assessing people-related challenges and opportunities is critical to enhancing deal value and easing integration.”