Eoin Ryan

In 2025, M&A activity in Ireland is expected to perform strongly fuelled by a combination of global economic trends, post-electoral political climates, sectoral shifts and local market dynamics.

Following widespread political and economic uncertainty in 2024, a bullish, pro-business environment has renewed investor confidence.

Private equity and credit

Private equity investors, mandated to deploy large sums of capital, are poised for more active investment strategies. Cross-border deals are likely to play a critical role in this upswing as Ireland continues to leverage its strong position as a hub for innovation and foreign-direct investment (despite rising concerns about protectionist foreign economic policies).

Such activity is expected to take place at the mid-market level as increased margin pressures, scaling pressures and reduced borrowing costs encourage acquisitions and disposals.

Private credit, particularly asset-based lending, has emerged as an alternative to traditional banks and mainstream lenders, offering investors more accessible financing options outside the regulated banking sector. Increased competition by lenders on fees and pricing will hopefully reduce the cost of borrowing and grow deal appetite.

We are also likely to see more bank-private credit partnerships which will serve to bolster volume opportunities as banks adapt and look for synergies with their private credit competition.

Sectors set to shine

Key sectors expected to drive M&A activity include technology, pharmaceuticals and healthcare, financial services and renewable energy. Further acquisitions in renewable energy and green technologies are also predicted as companies look to meet environmental, social and governance (ESG) targets. 

The rapid growth, evolution and disruption of artificial intelligence (as seen by the recent DeepSeek AI model) is apparent amid aggressive spending plans by ‘Big Tech’ and governments alike.

As a viable source of value creation, AI should help investors in streamlining their processes — from identifying targets and consolidating due-diligence workstreams, to augmenting business models of portfolio companies and evaluating possible targets. This efficiency should make deals less intensive and prompt greater deal volume.

Regulation’s potential impact

However, noteworthy regulatory developments and increased scrutiny in both Ireland and the EU — specifically in relation to technology, financial services and foreign direct investment — may bring with it protracted due diligence processes and extended completion times.

The recent foreign investment screening legislation means that transactors will have to be more mindful of the identity of the parties, the types of sectors and the location of the assets involved in the deal. Such an assessment, together with ministerial notification and/or approval (if required), may delay the implementation of transactions.

Whether developments in generative AI for target identification and due-diligence automation will help counterbalance these delays and streamline deal-making remains to be seen.

Warranty and indemnity (W&I) insurance is similarly set to gain further traction in Irish M&A transactions, especially for buy-side policies and seller-initiated buy-side policies.

W&I insurance protects both purchasers and sellers against breaches of warranties and indemnities for previously unknown or undisclosed risks, provided the policyholder has conducted due diligence on the relevant matters.

By shifting the risk onto the insurer, W&I insurance has the potential to enhance the deal-making and negotiation processes by expediting deal closings, allaying liability concerns for management and parties alike, facilitating a clean exit for the seller and removing the need for deferred consideration or escrow mechanisms.

With these factors in mind, the outlook for Irish M&A activity in 2025 appears promising. The combination of renewed investor confidence, evolving financing options, and technological advancements suggests a dynamic market ahead.

While regulatory considerations may present certain challenges, the increasing adoption of tools like W&I insurance and AI-driven solutions should help facilitate smoother transactions.

Ireland’s strong position as a hub for cross-border deals, coupled with active private equity investors and growing interest in key sectors like technology and renewable energy, sets the stage for what we anticipate will be a stronger year in the M&A landscape.

• Eoin Ryan is a partner and Tristan Meyer is an associate in the Irish office of global law firm Walkers.