Matt Sanders
Managing Partner
Guernsey
With M&A activity on the rise, evolving regulatory frameworks, and a favourable market for acquisitions, this year presents significant opportunities across corporate sectors. Whether managing complex cross-border transactions or adapting to shifting regulations, our Corporate experts are ready to help clients navigate challenges and seize new opportunities with confidence.
Read on for our jurisdiction-specific outlooks, covering major financial hubs around the globe.
Bermuda
As a leading domicile for (re)insurance, we expect to see M&A activity to persist in this sector, particularly private equity investment in life and other insurance vehicles given the stabilization of interest rates across the US and Europe, decelerating inflation, resolution of several key national elections and the narrowing of valuation gaps, providing PE with more opportunity for successful exits.
With the introduction of Bermuda's corporate income tax regime, which aligns with the OECD's Global Minimum Tax Rules (the "GloBE Rules"), with effect from fiscal years commencing 1 January 2025 and thereafter, we expect many (re)insurance entities to maintain principal places of business in Bermuda and we have seen increased M&A and transactional activity, with a number of global corporates redomiciling to Bermuda in order to take advantage of the benefits of being in a jurisdiction which does impose corporate income tax. We have seen a particular interest in the jurisdiction from the maritime sector since Bermuda's corporate income tax incorporates the international shipping income exclusion from the GloBE Rules.
Bermuda has established itself as the hub for fintech companies over the past 7 years since the enactment of its digital assets business licensing framework, and it is expected that the favourable market for investment in the US will result in considerable investment in the sector and ultimately result in M&A activity as the industry grows and consolidates and opportunities for VC exits in startups arise. We would expect the resurgence of IPOs to continue in 2025 given the US election results, confidence in the US market, as well as the strong pipeline of deals that were delayed in 2024 which are expected to be revisited.
British Virgin Islands (BVI)
The BVI as a jurisdiction is a bellwether for the global economy and as such we are anticipating a strong pipeline of M&A during 2025. This is driven by key macro-trends including a deal-friendly environment post US-election and a pro-growth agenda that is being pursued in many financial centres globally.
In particular, we expect an increase in big-ticket M&A, take-privates and IPOs of BVI companies, including the NYSE and NASDAQ where valuation premiums over other global exchanges persist. The flexibility afforded by the BVI corporate law regime for structuring complex cross-border M&A and IPOs will facilitate this global deal flowing during the coming year.
Cayman Islands
The merger and acquisition (M&A) outlook for the Cayman Islands in 2025 is expected to benefit from the anticipated favourable tailwinds for the United States business environment, including what some business commentators consider business-friendly policies of the Trump administration and continuing downward pressure on the Federal Reserve's interest rates. It remains to be seen if such enhanced activity in the United States will have a trickledown effect in Latin America, but assuming it does, this is likely to increase M&A activity in the Cayman Islands in connection with such LatAm based transactions.
The significant amount of dry powder held by investment houses, combined with an anticipated increase in public offerings in capital markets, is expected to drive a continued used of Cayman Islands structures. As funds seek efficient jurisdictions to deploy capital and support emerging opportunities, the Cayman Islands' favourable regulatory environment and tax benefits will likely attract an influx of investments and M&A transactions.
Private equity firms are increasingly looking for offshore opportunities and strategic partnerships, which will should support continued momentum for both take-private and public M&A transactions. The anticipated rise in cross-border transactions—especially in technology, healthcare, and energy and resources — are expected to bolster the region's utilisation. We expect to see continued growth of Cayman Islands entities in M&A transactions and corporate structuring generally.
Dubai
Continued geopolitical instability and uncertainty in the Middle East region looks set to play into Dubai's hands in 2025, as the city further entrenches its position as the regional financial hub. We expect this trend to be particularly evident in the startup ecosystem, with an anticipated year-on-year increase in total fundraising and the continued use of Cayman Islands and British Virgin Islands entities in connection with such fundraising.
Whilst equity fundraising is still the most popular choice for Middle East start-ups, 2024 saw an increase in debt financing among startups and we expect that this trend will gain further momentum in 2025, as the number of venture debt funds operating in the region continues to grow.
Guernsey
M&A activity in Guernsey is expected to perform strongly in 2025. For international deals, Guernsey's M&A market is driven in large part by the state of the UK economy, and with recent falling inflation data allowing the Bank of England more flexibility to cut interest rates, we expect to see heightened deal activity in 2025.
We would also expect to see the trend of Guernsey private equity funds looking to make full or partial exits to continuation funds to continue to develop. We have recently received a number of enquiries concerning restructurings or take-privates involving Guernsey schemes of arrangement, and we thus expect to see further schemes being used in 2025 accordingly.
We are also hopeful that greater IPO activity in the UK will return in 2025, with Guernsey continuing to be a leading jurisdiction to incorporate vehicles listed on the LSE.
For more domestically-focused deals, consolidation within the regulated financial services sector is expected to continue, with a number of businesses still actively looking to acquire smaller market participants with operations in Guernsey and elsewhere.
Hong Kong
We are predicting a continued upswing in corporate M&A, IPOs and take privates in 2025 as confidence amongst investors is returning and interest rates become more palatable for deal-making activity. With the US and many other countries' elections now decided, there is a sense of gradual returning vigour to markets in the region.
Whilst the Chinese economy looks to be in a downtrend, particularly under the weight of geopolitical issues, the PRC government has announced two rounds of stimulus and there has been a relaxation of approvals by Chinese regulators for listings. IPO activity is increasing.
We are seeing a number of take privates being announced involving Chinese businesses listed on Hong Kong and US exchanges and if increased US regulatory scrutiny of Chinese listcos continues we may see PRC firms exit the US capital markets to relist or dual list in Hong Kong.
Hong Kong is also successfully attracting family office and asset management firms, meaning there is significant capital looking to be deployed. Japan remains a bright spot for investment activity, as does Australia. We are also seeing activity across other major economies in the region including South Korea.
Ireland
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.
Cross-border transactions 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 notwithstanding growing concerns around 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.
The sectors set to experience the most significant degree of 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. However, noteworthy regulatory developments and increased scrutiny in both Ireland and the European Union (EU) (specifically in relation to technology, financial services and foreign direct investment) may bring with it protracted due diligence (DD) processes and lead-in times to completion. It remains to be seen whether (or the extent to which) developments in generative artificial intelligence (AI) in target identification and due diligence automation will help offset anticipated delays and streamline the deal-making process.
Jersey
The tailwinds anticipated from the political stability resulting from a decisive outcome of the UK election in 2024 have been countered by the market reaction to the first budget of the new government. However the M&A market in the UK and Jersey finished 2024 very strong and early indications in 2025 suggest this is going to continue at least for the first half of the year.
Deals entered into by sponsors around the time of the pandemic are now reaching the end of their cycle and given the unfavourable financing terms (when compared to the terms available at the time of the original deal) exits are being sought as opposed to refinancings. Partial exits and exits to continuation funds are a common feature of such transactions. Leverage on new deals is typically being provided by credit funds as opposed to the traditional lenders we might have seen 4 – 5 years ago.
In Jersey it is the usual sectors which continue to feature such as financial services, real estate, natural resources and Fintech. There is also a growing demand for tokenisation and digital asset platforms which Jersey is well placed to accommodate.
On the equity markets there were a number of take privates of Jersey entities in Q4 of 2024 reflecting the sentiment in the market the certain UK listed equities are undervalued. We expect this to continue in 2025.
There is much optimism that IPO activity in the UK will increase following the sweeping changes to the listing rules on LSE with 2025 going to be a telling year for how successful these changes have been. Jersey entities are also increasingly being used as listing vehicles on other stock exchanges particularly NYSE.
London
In 2025, we anticipate an increase in UK M&A activity, bolstered by greater macroeconomic stability, post-electoral political certainty in the UK and US, potential de-regulation in the UK and US and the stabilisation of interest rates. Key sectors that will facilitate this increase include technology (including, in particular, AI, machine learning and cybersecurity), energy and life sciences (including pharmaceuticals), with lower interest rates expected to support larger transactions in 2025.
Similarly, we expect the 2024 rise in take-private transactions in the UK and across Europe to continue into 2025, facilitated by the falling value of sterling, with UK targets presenting attractive opportunities to US- and Middle East-based buyers. Private equity deal activity is expected to recover in 2025, aided by falling interest rates, easing inflation, available capital reserves and a lack of successful investments and exits by PE funds in 2023 and 2024.
We expect an increased focus on pre-US IPO structuring by UK and European FinTech groups looking to take advantage of anticipated buoyancy in US capital markets.
Singapore
In Southeast Asia M&A activity is poised to benefit from strong economic prospects, digital transformation, and further increases in inbound or intraregional cross-border transactions. The region is becoming increasingly important for global trade and attracting foreign investment focus due to its strong economic integration, population growth, and strategic location; while its proximity to China makes it ideal for multinational corporations that are looking to diversify their supply chains.
We are optimistic that 2025 will bring a significant uptick in the pace of deal activity across Southeast Asian markets and sectors, much of which will flow through Singapore as the regional financial hub. There are positive signs in the macroeconomic data, improving confidence among private equity managers and a narrowing valuation gap between potential buyers and owners of target assets, many of which are past their 'sell-buy date'. With those PE buyers sitting on vast amounts of dry powder and PE owners under pressure to deliver exits, we expect the valuation gap to narrow further and 2025 to bring significant capital deployment. Strategic buyers also continue to show strong appetite to accelerate transformational change through M&A and we anticipate activity in take-private transactions will likely gather pace.
Conclusion
Across global markets, 2025 is poised for renewed growth in M&A activity, IPOs, and strategic investments. From regulatory developments to sector-specific shifts, Walkers’ expert teams across key jurisdictions are well-positioned to support clients in navigating this evolving landscape.
For tailored legal advice on how these trends may impact your business, please get in touch with our Corporate team.
