April 25, 2025 Near-term Challenges May Spur Manufacturing M&A

Tariffs and trade uncertainty may impact M&A as dealmakers reassess strategies, especially in manufacturing.

By Mark Williams, Datasite Global Chief Revenue Officer

Early 2025 is showing signs of increased mergers and acquisition activity, but some indicators remain fragile, especially within the industrial sector.

On the one hand, new projects on Datasite, which annually facilitates close to 19,000 new deals, rose 12% in the first quarter of this year compared to the same time a year ago. The activity is being led by new deal kickoffs – asset sales or mergers – in the consumer, energy, and technology, media and telecommunications (TMT) sectors. New consumer and energy kickoffs rose 19% each, compared to a year ago, while new TMT kickoffs increased 11% in the first quarter, year over year.

In contrast, the industrials and manufacturing sectors exhibited modest growth. New global industrial kickoffs experienced a 3% increase in the first quarter compared to the previous year. This tepid growth underscores the sector’s vulnerability to external factors such as shifting trade policies and tariffs, which were identified by 66% of dealmakers in a recent Datasite webinar poll as a significant impediment to M&A activity this year.​

Perhaps more than other industries, the industrial sector faces several near-term dealmaking challenges including geopolitical uncertainties, a stringent regulatory environment, the risk of supply chain disruptions and technological advancements. Yet these are also the factors that could prompt increased deal activity, especially as they can affect a company’s broader strategic goals.

For example, some industrials need to transform, especially now that the pace of change is so fast around artificial intelligence (AI). This may spur some industrials to pursue acquisitions that bolster their technological capabilities, particularly in automation and digitization, to stay competitive in a rapidly evolving market.​ Likewise, supply chain vulnerabilities may prompt some industrials to engage in vertical integrations, acquiring suppliers or distributors to gain greater control over their value chains.​ Some industrials may also want to shed non-core assets to streamline operations and focus on primary business areas, thereby unlocking value and improving financial performance.​ Clearly, the fastest way to transform is through transactions.

To be sure, the current unpredictability means dealmakers must remain vigilant about policy changes that could accelerate, or drag out, deal timelines. The key is preparation—anticipating increased levels of review, longer review processes, and leveraging technology to expedite diligence.

Here, AI can help. AI is already enhancing M&A by identifying targets, automating due diligence, and using predictive analytics to boost efficiency and accuracy. Currently, one in five dealmakers uses generative AI in the M&A process, and many rank AI adoption as their top operational priority this year.

Industrial M&A success requires strengthening due diligence, strategically using AI, anticipating regulatory scrutiny, and staying ahead of geopolitical shifts. Industrials that embrace proactive strategies, including prioritizing deal readiness and leveraging technology to mitigate risks and enhance efficiency will thrive in the evolving landscape.

As summer 2025 approaches, the industrials sector stands at a crossroads, influenced by a complex interplay of geopolitical, economic, and technological factors. While challenges persist, opportunities abound for companies that can adeptly navigate this landscape. Strategic acquisitions, supply chain consolidations, and targeted divestitures are poised to shape the M&A activity in the coming months, driving growth and resilience within the sector.

About the Author:
Mark Williams is Global Chief Revenue Officer at Datasite Enterprise, a business unit of Datasite, a leading SaaS platform used by enterprises globally to execute complex, strategic projects. In this role, Mark is responsible for all aspects of the go-to-market strategy for the company’s flagship SaaS solution, including managing a global organization of more than 450 sales, enablement, and operations professionals supporting clients in over 180 countries.

Prior to this, Mark was Chief Revenue Officer, Americas for Datasite, where he directed the sales strategy across the region, including leading over 170 sales representatives, sales leaders and pre-sales teams across the United States, Canada, and Latin America.

Before joining Datasite in 2015, Mark held several sales leadership roles at a variety of SaaS companies, including Intralinks (now part of SS&C), SmartFocus and Kno.

Mark holds a BSc in Mechanical Engineering from Humberside University, England.

Find Mark on LinkedIn. 

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