The Industrial & Manufacturing sector ranks among the top areas for anticipated M&A activity in 2025, with over 20% of respondents identifying it as a focus. However, dealmaking in this space is not without its challenges. Tariffs and supply chain disruptions—both cited as top obstacles across the broader survey—are particularly relevant to this sector, where global sourcing, logistics, and cost structures are highly sensitive to trade policy and geopolitical shifts.

Respondents indicated that economic uncertainty and valuation concerns are influencing strategy, prompting a shift toward strategic and selective acquisitions. This aligns with broader trends across sectors, where dealmakers are prioritizing operational efficiency and resilience. In Industrial & Manufacturing, this often translates to consolidation, vertical integration, and investment in automation and AI to offset labor shortages and improve margins.

While the sector may not be leading in AI adoption compared to Technology or Healthcare, there is growing interest in leveraging AI for predictive maintenance, supply chain optimization, and production analytics—all of which can enhance the value proposition of potential targets.

M&A activity in Industrial & Manufacturing is expected to remain active, but dealmakers are navigating a complex landscape shaped by tariff exposure, supply chain volatility, and macroeconomic pressures. Strategic alignment and operational synergies will be key drivers of successful transactions in the year ahead.

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“Manufacturing M&A in 2025 is about building smarter, not just bigger. Buyers are targeting companies with operational strength, supply chain control, and automation readiness. Buyers with strong balance sheets and cashflows have a decisive advantage in this market.” Nick Monaghan Dykema Member

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