Cross-Border M&A in 2025: Legal, Regulatory & Tax Shifts Shaping Deals

Switzerland: Regulatory Opening Meets Global Headwinds

Switzerland has entered 2025 with solid fundamentals: stable interest rates, abundant PE capital, and strong activity in technology, healthcare, and life sciences.

A major shift took place on 1 May 2025, when Switzerland lifted restrictions on trading Swiss-listed shares on EU exchanges. This streamlined cross-border capital market access, enabling deals to be combined with dual listings or equity financings.

Key frameworks:

• Private transactions → Swiss Code of Obligations
• Public company deals → Financial Market Infrastructure Act (FMIA), overseen by the Takeover Board and FINMA
• Cross-border “emigration mergers” → Still rare, due to tax burdens and strict legal continuity rules

On the tax side, the OECD’s Pillar Two minimum corporate tax – in force since January 2024 – continues to affect only a handful of Swiss multinationals, but it has set a precedent for global tax alignment. Deal teams are reviewing how it interacts with transfer pricing and deal structures.

Example: In Q2 2025, a Swiss medtech acquisition of a German target leveraged EU trading liberalisation to issue equity across both markets, reducing financing costs by ~8% compared to a purely Swiss structure.

Current challenges:

• Elevated U.S. tariffs on Swiss exports
• New capital requirements for UBS that may ripple into financing costs

Practical takeaways:

• Use EU trading access → Structure financing across Swiss and EU markets to tap broader investor pools
• Model trade-policy shocks → Build tariff and regulatory risk into early-stage valuations
• Align tax planning → Integrate Pillar Two impacts into structure from the outset

Europe: Opportunity in a Fragmented Landscape

So far in 2025, M&A activity across Europe has been muted, with deal volumes and values both down. Yet renewables, technology, and specialist manufacturing continue to offer selective growth opportunities (From Leverage to Leadership).

One headline theme is European banking consolidation. Despite record 2024 profits and U.S. competition, large-scale mergers remain rare due to regulatory fragmentation and the absence of a full banking union.

Market access & compliance:

• The EU’s equivalence regime offers non-EU acquirers conditional market access, but it can be withdrawn quickly, creating uncertainty for Swiss and U.S. buyers.
• Data protection compliance has been tightening. The EU–U.S. Data Privacy Framework has eased some transatlantic transfers, but acquirers still face GDPR, sector-specific rules, and cybersecurity obligations.
• For technology-heavy deals, the AI Act is on the horizon, with compliance obligations already shaping deal structuring in healthcare, finance, and mobility sectors.

Example: In late 2024, a mobility software acquisition stalled for four months when AI Act readiness checks revealed compliance gaps in algorithm transparency – a challenge acquirers are now addressing pre-LOI.

Practical takeaways:

• Map regulatory exposure → Identify all licences, data flows, and compliance obligations before signing
• Factor AI Act readiness → Price in remediation costs for non-compliant tech assets
• Prepare for sudden access shifts → Build contingency clauses into deal terms

United States: High Reward, High Complexity

The U.S. remains the world’s largest M&A market, with deal values climbing even as volumes have softened. Technology, infrastructure, life sciences, and industrial products continue to attract strong inbound interest.

For foreign acquirers, however, the U.S. environment is increasingly complex:

• The Corporate Alternative Minimum Tax (CAMT), combined with OECD Pillar Two, has added new layers to cross-border tax planning.
• Proposals like the “One Big Beautiful Bill” could raise withholding taxes and broaden U.S. tax exposure.
• CFIUS reviews remain rigorous, and antitrust scrutiny now considers labour market effects.
• Trade policy remains volatile – tariff changes can alter valuations, timelines, and deal feasibility.

Example: In early 2025, a Swiss–U.S. industrial merger reduced its headline price by 5% to offset potential tariff costs after new U.S. trade proposals targeted machinery imports.

Practical takeaways:

• Build structural flexibility → Use earnouts or contingent payments to manage policy uncertainty
• Model multiple trade-policy scenarios → Adjust integration plans and financing accordingly
• Engage early with regulators → Pre-clear with CFIUS and antitrust counsel to avoid deal delays