Heading into 2025, many experts think that M&A activity will pick up in the New Year. Surveys of industry insiders reveal a consensus that deal-making will increase next year, thanks largely to Trump’s expected deregulation and the U.S. Federal Reserve’s newly dovish monetary policy.
As an example of this, Rajesh Sharma, an M&A strategist, said that “M&A activity will continue to strengthen in 2025 after having suffered in 2022 and 2023 due higher rates, geopolitical uncertainty and mismatch in valuations between buyers and sellers.” Sharma’s perspective is typical of those working in M&A, with 70% of managers surveyed by Dykema saying they expected more dealmaking in 2025.
In this article, I will explore 3 stocks that look like likely M&A/takeover targets in 2025.
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7/11
7/11 is a globally known convenience store chain, owned by the Japanese retail conglomerate Seven & I Holdings (OTC: SVND.Y). The company was the target of a buyout attempt by Canadian company Alimentation Couche-Tard (TSX: ATD) in 2024.
Couche-Tard initially bid $38.7 billion for 7/11, and it was promptly rejected. The company then upped its bid, which Seven & I responded to by saying it would review the offer. Then, the family that founded 7/11 came out with their own offer, valued at $60 billion. Although Alimentation’s increased bid has not been formally rejected, the offer being made by the Ito family is worth almost Couche-Tard’s entire market cap. It seems unlikely ATD will get the financing required. The general tone in media coverage of the 7/11 takeover is that ATD will not succeed.
Nevertheless, 7/11 remains a likely M&A target in 2025 because of the founding family’s offer. The plan will see a major restructuring of Seven and I, the holding company, as well as an IPO of 7/11’s North American assets. These types of restructurings and public offerings can be thought of as part of the broader M&A universe, and they look likely to be in 7/11’s future.
Laurentian Bank
Laurentian Bank (TSX: LB) is a Canadian bank likely to be involved in M&A in 2025 – this one as the acquired company rather than as an acquirer. Laurentian is a smaller bank that is known to be looking for a larger bank to acquire it. The big Canadian banks have large market shares and Systemically Important Bank (SIB) status, which makes it hard for smaller banks like Laurentian to compete with them. For this reason, Laurentian is seeking a buyer. It failed to attract one this year, but many expect one of the big six banks to make a bid next year.
First Quantum Minerals
First Quantum Minerals (TSX: FM) is a Canadian mining company that mainly mines for copper ore, a commodity that accounts for about 80% of the company’s revenues. First Quantum is a relatively small company with a $17 billion market capitalization. However, despite its small size, the company has been at times profitable, which makes it a suitable takeover target for a larger mining company. Reuters recently reported that First Quantum was a likely 2025 takeover target, due to the increased demand for copper in renewable energy.
Foolish bottom line
2025 looks likely to be a big year for M&A. Interest rates are coming down, and a new U.S. administration is coming up. The Trump administration is expected to be very M&A friendly, and that has implications for Canadian companies as well as their U.S. counterparts. On the whole, it looks like a great many deals will get done.
