2025 Dealmaking Surge: Mega-Deals, Rising Fees & Growing Regulatory/Capital Risks

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In 2025, the investment banking sector appears to be undergoing what could be termed a tempered rebound—deal volumes have surged, particularly in mega-mergers and acquisitions, though accompanied by heightened regulatory, political, and financial risk. Strategic implications suggest that banks need to sharpen both their political intelligence as well as financial structuring capabilities to thrive.

First, the magnitude of recent deals reveals renewed boldness. Netflix’s proposed acquisition of Warner Bros Discovery (WBD) for approximately US$82.7 billion enterprise value is one such iconic deal, preceded by others like the $55B leveraged buyout of Electronic Arts. These deals illustrate that sponsors and corporates are willing to layer leverage anew given favorable debt market conditions. [2][5]

Second, regulatory and political risk has become central to deal success. As Lazard CEO Peter Orszag emphasized, high-level engagement—sometimes at White House or Cabinet level—is now essential, especially when deal participants include foreign funds, politically exposed persons, or assets with strategic importance. [3]

Third, banks are revising leadership and strategy. JPMorgan is hiring veteran investor Todd Combs to lead over US$10B in committed capital toward national security sectors; and BoA has reorganized its global tech/media/telecom investment banking leadership. [4][7] These moves indicate an orientation toward sectors seen as high priority under current geopolitical and economic themes.

Fourth, the availability and structure of financing are changing. Bridge loans have returned, exemplified by Wells Fargo leading a $59B bridge loan for Netflix’s WBD deal, while private equity and alternative capital (including sovereign wealth funds) are more involved in taking ownership stakes. [5][6] However, this resurgent leverage also raises concerns about debt servicing, bondholder exposure, and covenant strength.

Finally, while dealmaking is back, IPOs remain selective and cautious. Firms are monitoring cost of capital, regulatory environments, and market sentiment. Private equity appears to offer earlier exit possibilities, but liquidity preferences may favor buy-and-build, carve-outs, or direct secondaries over IPOs in the near term. [7][6]

Open questions include: will regulatory bodies be able to keep pace with the complexity of cross-border deal flows involving foreign capital? How sustainable are high leverage levels amid rising interest rates? And, can IPO markets absorb some of the pent-up supply without faltering?