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PwC and Boston Consulting Group expect “pent-up demand” for mergers and acquisitions to boost their advisory revenues this year, as an expected surge in dealmaking spurs hopes that the industry can break free from its post-pandemic funk.
BCG chief executive Christoph Schweizer told the Financial Times there had been a rise in M&A deals on the firm’s “radar” and that it expected an increase in due diligence and preparatory work, along with advice on integrating newly merged businesses.
Mohamed Kande, global chair of PwC, said optimism among CEOs was “high” and that businesses were “looking at ways to transform for success, and in many cases reinventing their business model altogether”.
Their comments come after the number of M&A deals worldwide hit a nine-year low in 2024, according to the London Stock Exchange Group. While a handful of megadeals pushed the total value of M&A to more than $3tn for the first time since 2022, that was still barely half the 2021 peak.
The deal slump contributed to a sharp slowdown across the consulting sector, particularly at the Big Four of Deloitte, EY, KPMG and PwC.
In their most recent financial year, Deloitte and EY posted their lowest global revenue growth in 14 years. Thousands have been laid off across the industry in the past two years, including at McKinsey, PwC and KPMG.
Investment bankers are optimistic that dealmaking will rebound in 2025 after activity was depressed last year by uncertainty over elections across the globe. Source Global, which tracks the consulting industry, said the dealmaking slump had led to a particularly weak end to the year for firms in the US, which went to the polls in November.
“We expect growth in our advisory business as well as across the broader consulting sector . . . driven by a higher level of M&A activity and companies’ increased focus on implementing technology and sustainability transformation programmes,” Kande said.
Schweizer said companies were now more eager to do deals because “there has been pent-up demand” for M&A. He said that “private equity has a lot of dry powder they . . . need to deploy”, which will encourage acquisitions, adding that buyout firms also need to exit some investments after sitting on their portfolio companies “for an unusual length of time”.
Global private equity and venture capital funds held $2.51tn in uncommitted capital in December, according to private market data provider Preqin, down from a record $2.66tn at the end of 2023 but still an elevated level by historic standards.
Schweizer said M&A activity would also be boosted by the prospect of less regulation under the Trump administration in the US.
BCG, which has not yet published its revenues for 2024, said its growth was in the “double digits” in 2024 and it expected similar this year, largely from technology projects and advising companies on how to improve productivity, as well as deal work.
One senior partner at another leading consulting firm said there was now “energy and excitement” about M&A again.
“There isn’t a company that isn’t thinking about M&A,” they said. “We are a fairly good leading indicator and the amount of diligence work we are engaged in increased significantly in December and January.”
Politics will also help drive growth in consulting in the UK, according to PwC UK’s head of consulting Jonathan House, who cited the British government’s focus on economic growth.
As optimism grows in the consulting industry, firms are revisiting their headcounts and hoping to leave the run of staff cuts behind them. PwC and BCG both said they expected to add to their workforce this year.
Carole Streicher, head of deal advisory at KPMG in the US, said the firm hired heavily during an M&A surge in 2021 and kept staff busy preparing clients’ businesses for sale when the market eventually revives. The first half of 2025 could prove to be a window for dealmaking, she said, before a possible rise in inflation from new tariffs.
The staff “have been trained. They’re continuing to be trained. And as the deal market picks up, utilisation will go up,” she said. “We’ll also be adding more people to the team.”
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