Jerome Pottier, EMEA Chief Revenue Officer at Datasite, highlights how rising economic pressures, geopolitical uncertainty and the rapid adoption of AI-driven tools are accelerating consolidation across global markets. Drawing on activity trends from Datasite’s platform, his perspective comes at a pivotal time for UK businesses preparing for the Autumn Budget and assessing how best to position themselves for stability and growth.
A sharp rise in merger activity signals a shifting dealmaking landscape. Organisations are pursuing consolidation to strengthen resilience, accelerate digital transformation and stay competitive amid economic uncertainty. Merger activity on Datasite’s platform, which facilitates about 19,000 new deals annually, shows a significant global increase in third-quarter mergers compared to the same time last year.
This activity is the result of rising costs, geopolitical pressures and the adoption of artificial intelligence (AI)-powered tools that streamline these complex transactions. With the UK Autumn Budget approaching, businesses are navigating fiscal uncertainty while seeking clarity to plan and sustain growth.
Drivers of Consolidation
The timing of this wave of consolidation is not surprising. As the UK approaches its Budget and companies globally face rising costs and geopolitical uncertainty, mergers have become a clear path to growth. Technology is also a significant factor as AI-powered tools, including those focused on agentic AI, speed up diligence processes and help dealmakers manage complex transactions that would previously have taken much longer.
Unlike traditional automation, these agentic AI tools can analyse information, make strategic recommendations and carry out complex tasks with limited human oversight. Dealmakers are taking advantage of this, with a survey from Sourcescrub showing that nearly half of dealmakers use AI tools almost daily, with most expecting deals to move 50% faster because of AI-powered tools. Two-thirds of professionals have also identified AI as their top operational priority for 2025.
The UK Market
Firms recognise that organic growth alone cannot provide the technology and capabilities needed to stay competitive in markets shaped by AI and digital systems. Acquisitions provide faster progress and reduce operational risk. Consequently, 43% of deals globally reached closure in Q3 on Datasite’s platform, up slightly from last year. Deal holds, where transactions pause but remain active, rose to 29% in the same time. These trends suggest cautious optimism and confidence, with buyers willing to commit capital under more certain economic conditions.
The UK market provides additional context. The Office for National Statistics reported that M&A volumes increased more than 22% in Q2 2025 quarter over quarter, though the value of deals fell outside domestic transactions. Outward M&A by UK firms halved to £4 billion, while inbound investment declined by £11.8 billion. Domestic consolidation continues, likely driven by larger firms acquiring smaller competitors that face higher operating costs. This suggests that while the UK faces challenges internationally, domestic consolidation is helping firms strengthen their position and manage costs effectively.
Autumn Budget Looms
Although Q2 saw a marked increase in activity, the outlook for the second half is less certain. Businesses are preparing for the Autumn Budget on 26 November, amid concerns that constrained liquidity and potential rises in financial sector levies could trigger a slowdown or freeze in dealmaking.
Chancellor Rachel Reeves faces pressure to address an estimated £22 billion, prompting widespread expectations of new revenue raising measures. Business rates, capital gains tax, and inheritance tax are all rumoured to be under consideration, leaving owners uncertain about their future liabilities.
The timing is tough for businesses as they continue to adjust to the National Insurance rise that came into effect in April, which has already squeezed margins and dampened risk appetites.
Stability in Clarity
Still, despite these concerns, there is cause for optimism. Once the Budget is delivered, businesses will once again have a clear view of the road ahead after months of speculation. The government has previously emphasised its commitment to providing predictability, stability and certainty over the corporate tax landscape to help businesses make investments and drive growth. Companies can adapt to higher costs or new regulations once they know exactly what they’re dealing with, and the UK will still represent a stable and attractive place to do business.
