Automotive M&A Surged in 2025, Alvarez & Marsal Report Finds
The automotive sector saw increased merger and acquisition activity in 2025, with transaction volumes surpassing the previous year and a rise in larger deals, according to a new report from Alvarez & Marsal.
Merger and acquisition (M&A) activity in the automotive industry increased in 2025, with transaction volumes exceeding those of the prior year and a notable rise in larger-scale deals, according to the "Automotive M&A Trends Report" released in May 2026 by Alvarez & Marsal.
Dealmakers navigated a complex landscape balancing long-term electrification goals against immediate pressures such as rising costs, uneven electric vehicle (EV) adoption, and tightening regulations. Geopolitical volatility and supply chain realignments also reshaped capital deployment strategies.
The report, authored by Managing Director David Evans, indicated that nearly 1,000 transactions were announced in 2025, up from just over 900 in 2024. Deals exceeding $50 million accounted for approximately 30% of all disclosed transactions, a higher proportion compared to the previous year.
Valuation multiples rose to an average of 12x in 2025, compared to approximately 9x in 2024. This increase was driven by elevated valuations in specific deals, particularly within the automotive components and electronics segments in China. Strategic buyers represented about 68% of announced transactions, consistent with prior periods.
Deal activity was primarily driven by acquisitions targeting electrification, software-defined vehicle capabilities, autonomous driving, and commercial vehicles, reflecting the industry's transition away from traditional internal combustion engine architectures. Geopolitical factors and trade tariffs also contributed to a surge in nearshoring activity.