News of the week summary - 28/12/2025

Mega-Deals push global M&A to record levels

Global mergers and acquisitions reached $4.5 trillion this year, marking the second-highest total in over four decades and just below the 2021 boom. This surge was driven by a wave of so-called mega-deals, with 68 transactions each valued at $10 billion or more reshaping industries ranging from media to transportation.

Several factors fueled this surge. Financial markets remained robust, lending was readily available, and U.S. regulatory barriers were eased, giving companies confidence to pursue bold, transformative deals. High-profile examples include Netflix and Paramount competing to acquire Warner Bros Discovery, and a $250 billion rail merger between Union Pacific and Norfolk Southern to form a transcontinental powerhouse.

Investment banks benefited directly, with fees estimated at $135 billion, a 9 percent increase from the previous year. The U.S. dominated the activity, accounting for $2.3 trillion of deals, the largest share since 1998. Experts highlight that the combination of strong risk appetite, favorable financing, and a cooperative regulatory environment created ideal conditions for large-scale mergers.

While mega-deals surged, smaller acquisitions and private equity transactions did not keep pace, indicating that the boom was concentrated among a limited number of high-value deals rather than broad market activity.

EU Falling Short on U.S. Energy Purchase Pledge

The European Union has spent less on American oil and gas over the past four months than expected, despite a political pledge to buy $750 billion of U.S. energy over the next three years. While the bloc imported higher volumes of U.S. liquefied natural gas since signing the trade deal in August, falling global energy prices meant the total value of purchases dropped by 7 percent compared with the same period last year.

Estimates suggest EU imports of U.S. oil and gas from September to December totaled about $30 billion, far below what would be required to meet the three-year target. Analysts highlight that the deal itself is non-binding and that energy purchases are largely determined by market factors, including shipping costs and profit margins, rather than political commitments. Even replacing all Russian gas imports with U.S. supplies would only cover around 23 percent of the pledged value. Meeting the full $750 billion target would require gas prices to quadruple, a scenario that is highly unlikely given current market expectations and projected oversupply.

Infrastructure constraints also limit the EU’s ability to import more U.S. energy. The bloc would need to expand its storage and regasification capacity by over 50 percent, while the U.S. would have to more than double its export facilities to support such volumes. Even so, the EU has taken steps to increase U.S. energy imports, signing at least nine new long-term LNG contracts this year and expecting to purchase 70 billion cubic meters of U.S. LNG in 2025, up from 45 billion cubic meters the previous year.

U.S. economy surprises with strong third-quarter growth

The U.S. economy grew at an annualized rate of 4.3 percent in the third quarter, significantly outperforming economists’ expectations of 3.2 percent and marking the fastest growth in two years. The expansion was fueled by strong consumer spending, particularly on healthcare services and electronic equipment, alongside increased government defense spending and robust exports. At the same time, business investment slowed and imports fell, which added to overall GDP growth because imports subtract from the measure of domestic production.

Trade also played a notable role. Net trade contributed 1.6 percentage points to the headline growth, as exports remained strong while imports declined. Analysts attribute part of this effect to limited retaliation by U.S. trade partners against tariffs, but caution that such a boost is unlikely to continue.

Despite the upbeat GDP figure, some warning signs are emerging. Consumer confidence fell sharply in December, reaching its second-lowest level in five years. Economists also note that recent growth has been partly shaped by temporary factors, including the timing of trade flows affected by tariffs and government shutdowns. As a result, growth in the fourth quarter may slow.

The market reaction was muted. U.S. stocks remained largely unchanged, and Treasury yields rose modestly as investors scaled back expectations for early 2026 interest rate cuts. Analysts expect the Federal Reserve to maintain current rates in the near term.

Copper reaches record high amid supply fears and tariff concerns

Copper prices soared past $12,000 per tonne for the first time, marking a record high as concerns about potential U.S. tariffs and supply shortages fueled a rally that has been building since October. The metal, widely seen as an indicator of global economic health due to its use in industries from construction to electronics, rose about 1 percent in early London trading.

Several factors are driving the surge. Production disruptions at major mines have sparked fears of shortfalls, while analysts anticipate growing demand in the coming years could create persistent market deficits. Expectations of continued economic support in China, a key consumer of copper, and a weaker U.S. dollar also helped push prices higher.

Traders are also reacting to potential U.S. trade policy changes. While current tariffs do not target copper directly, concerns that future measures could limit imports have prompted large shipments to the U.S., which in turn may tighten supply in other regions, including China.

The copper rally is part of a broader surge in metals, with gold and silver also hitting record levels, reflecting geopolitical tensions and expectations that the Federal Reserve may cut interest rates next year. So far in 2025, copper has gained 37 percent, on track for its largest annual increase since 2009.