Latham & Watkins M&A Leaders on the ‘Year of the Mega Deal’

Latham & Watkins beat out its rival Kirkland & Ellis in our annual League Tables ranking of M&A activity for 2025. And on this episode of our podcast, On The Merits, the firm’s M&A co-chairs talk about what went down in what one called “the year of the mega deal.”

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Alex Kelly and Paul Kukish spoke with Bloomberg Law reporter Mahira Dayal about why Latham was able to work on almost 800 deals in 2025 totaling more than $780 billion in value. Kukish said AI and AI-adjacent deals were a big part of the firm’s success—success that smaller firms just now getting into the AI space may not be able to replicate.

They also talked about how they think tariffs and other Trump administration policies affected the market this year for buying and selling companies. “There has been an increased focus by our clients on how the president views a particular industry, or a particular company, or a particular country,” Kelly said.

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This transcript was produced by Bloomberg Law Automation.

TRANSCRIPT:

Host (David Schultz): Hello and welcome back to On the Merits, the news podcast from Bloomberg Law. I’m your host, David Schultz.

Today we’re talking about the year in deals. Bloomberg Law just came out with its league tables rankings for 2025, and the top firm was Latham & Watkins, coming in just ahead of its rival, Kirkland & Ellis. To find out how Latham did it, we have on the podcast the two global co-chairs of Latham’s M&A and private equity practice, Alex Kelly and Paul Kukish. They spoke with Bloomberg Law reporter Mahira Dayal as part of our league tables coverage.

In a bit, Kelly and Kukish will get into how they think tariffs and other policies out of the Trump administration affected the market this year for buying and selling companies. But first, Kelly starts us off by talking about the broad themes she saw in 2025.

Alex Kelly: So I think 2025 was the year of the mega deal. And from an industry perspective, really the year of AI and data centers. And I think as we look a little bit more behind the scenes, I say we saw a real increase in flexibility in the capital structure. And so we’re seeing some of these larger deals get done with a very complex puzzle of using senior debt, junior debt, hybrid securities, preferred securities, common equity, all cobbled together to actually get enough money to do some of these larger deals.

And I think we continue to see a lot of creativity in dealmaking. And there continued to be a significant uptick in things like minority sales. I’d say all in all, mega deals, AI and data centers, flexibility in the capital structure and continued creativity around dealmaking.

Mahira Dayal: If it’s the year of mega deals, which it seems like it was, is there a good reason why?

Paul Kukish: Yeah, I think there has been a series of factors. You’ve seen it, I think most prominently in the strategic M&A space where higher stock valuations have created higher currency levels for stock deals. So I think that’s certainly been an impetus for it. That said, there were a number of massive private equity deals, many of which we were involved in. But certainly the value of deals, as Alex mentioned, was I think better than any of us could have anticipated this year, even if the volume of deals was up, but in a relatively incremental way.

I think the fact that there were so many high dollar deals done, whether your metric is 5 billion or above or 10 billion or above, it was sort of up in every category. We certainly at Latham stand to benefit from those increased deals. I think we’re particularly adept and capable in light of the platform at executing on those larger deals for our clients. So it was certainly a boon for the firm and a boon for the market as well.

Mahira Dayal: Before we go into further market questions, I’d love to switch gears into the lead tables themselves. One thing that’s been a trend on and off for a while is obviously some firms having different strategies from others. So Wachtell, Cravath, for example, have fewer people. They work on fewer deals, but their deal volumes are pretty high up this year. Is there a reason you think the Latham or Kirkland model of playing the volume game is better?

Alex Kelly: Well, I think it’s important to note that we don’t really do volume for volume’s sake. We do it because we believe that having an integrated global platform is the best way to service our clients. The reality is that Wachtell and Cravath are doing the pure play M&A work on those large deals that are mentioned, but in virtually all cases, they’re working with a variety of local counsel to help support them in those efforts because they just lack the internal capabilities to do what they need to do on a global basis. And that’s just not our business model.

We believe in investing in our global platform so that we can service our clients in all major financial centers and execute across the entire spectrum of what our clients need. So not only the pure play M&A advice, but also the industry expertise, the regulatory, the tax, employment, data privacy, and all those other specialist areas, which are really necessary to have to provide that turnkey full service to the client.

Paul Kukish: Yeah. And further to that point, Mahira, I mean, the middle market, both in private equity and strategic M&A has been our sweet spot for many, many years in the practice. I think it will continue to be. And that allows us to bring new clients and emerging clients. It allows us to bring those clients onto the platform to see the true breadth and depth of the capability that we have. So that has been a massive part of our growth engine for years.

Yes, we represent hundreds and hundreds of public companies and many, many big public companies. But I think the benefit to us of being a lifecycle service provider for those, again, sort of emerging mid-market or emerging mid-cap companies have always been a huge part of the growth engine for us. And we’ll continue to be bringing them into the client platform. And that will continue to be a core principle of focus for Latham.

Mahira Dayal: Switching gears a bit into discussing the market, tariffs obviously slowed things down earlier in the year and caused some uncertainty. And Paul, when we were talking earlier, you said there are some companies that are still marketing themselves as tariff agnostic. What does that mean? And is it something you think you’re going to still see in 2026?

Paul Kukish: Yeah, I think they’re certainly in the wake of Liberation Day and call it the, you know, 30 to 90 day period post that leading into the summer. You know, it was obviously the prevailing macro story in the market. So I think it provided at that point in time, a unique marketing opportunity for businesses that may have been coming to market anyway, certainly in the US that might’ve been US specific businesses.

So that is certainly a benefit, I think absent a new sort of macro shock in tariff levels. I think the market has sort of digested where tariff levels are at currently and how they may impact a particular business at this point. So whether that becomes a lead marketing angle for businesses as we move into 26, I think it’ll be less the case than in the immediate wake of Liberation Day, where it was, you know, folks scrambling if for no other reason than to salvage sale processes or investment processes by being able to, you know, almost conveniently pitch themselves, at least for those that were actually this as being as being tariff agnostic.

Mahira Dayal: Staying on the policy front, is there anything in the regulation world, whether antitrust, tax, national security, that’s meaningfully changed the way you’re approaching deal making?

Alex Kelly: Well, I think within the antitrust space, the administration has definitely signaled an openness to remedies, which I’d say in general creates a more hospitable environment for dealmaking. And so in some cases, it becomes less a question of if and more a question of how and what remedies a company is willing to entertain to get a deal done.

But I’d say the other focus is there has been an increased focus by our clients on how the president views a particular industry or a particular company or a particular country and how that may impact this transaction or the approval of a transaction and how even if there’s a sense as to what the playing field may be today, how that playing field could change over time and impact regulatory approvals that, you know, take three, six, seven months to get through.

Mahira Dayal: Are there any industries that are no-nos for the moment?

Alex Kelly: I don’t think there’s any industries that are sort of no-nos for the moment. I think that, you know, all industries are going to continue to see probably a steady increase in dealmaking. I’m sure there’ll be some blips here or there and there’ll be some downturns. But, you know, I wouldn’t say that there’s any one industry that’s signaled out as being significantly impacted by any changes to regulation.

Mahira Dayal: And then, Alex, you talked a bit about remedies. Are you seeing any interesting remedies in your own practice?

Alex Kelly: Yeah, I’d say it’s probably a little bit too early to make a generalized statement about what we’re seeing. We’re seeing an openness to them. And so I’d say what I’ve seen in my own practice is more conversation and maybe negotiation around the effort standards that we put in agreements that say what particular parties have to do to get antitrust approval or security clearance, et cetera. I can’t say that, you know, we’ve sort of seen enough remedies to be able to make any kind of conclusive statement about whether they’re, you know, more or less than we’ve seen in previous administrations or any sort of trends that, you know, we’re seeing emerge.

Mahira Dayal: Keeping on the theme of industries, is there anything you’re most excited about? I’d assume AI is the biggest or one of the big ones. Is that the big story of 2026?

Paul Kukish: Yeah, I mean, I think it will continue to be. Obviously, we’ve seen massive uptick in valuations with the AI specific businesses. There’s been, again, quite obviously a sort of adjacent positive impact on industries that if not AI, actual AI adjacent to AI data centers, you know, certainly probably being the best example. So they provided incredibly steady deal flow for us.

And ultimately, that sort of chain leads us from an area where at its core, we’ve always been great on the tech side, down to the infrastructure side, whether you’re talking about data centers or even bringing it a step further to power plants, right, which is obviously critical to data center development and ultimately critical to AI advancement, right? So it’s not just the AI or tech. I think it’s the adjacencies and the knock on impacts that we’ve benefited from and I suspect will continue to benefit from as we move into 2026, by all indication.

Mahira Dayal: Paul, when you spoke about AI, you made it sound like Latham came in with a pretty strong foundation, which gives the firm a bit of a boost in what seems to be a very competitive market. At the same time, I’m covering lots of firms who are launching AI infrastructure task forces and cross collaboration teams. Do you feel like it’s too late for those firms?

Paul Kukish: I think it is not necessarily too late to be in the game. I think it may be too late to have a full service practice in certain of those areas. The tech practice for us has been years in the building and years in the making and takes not only lawyers in our group, but lawyers across many other groups within the firm to execute on these transactions, right? The same is the case with some of the adjacencies that I mentioned as well, data centers being a great example.

So I think having this sort of depth that we do, which frankly, to some extent, was a happy coincidence for us around having such a built out infrastructure practice sitting there for us. And in many instances, a lot of what we’re seeing on the data center side, to be candid, is less complicated than what we as a firm had been doing for decades on larger scale infra projects, be it commodities, power plants, et cetera. So we were extremely well positioned.

So do I think there are firms that can execute on M&A deals in the AI space or in some of the adjacencies that I mentioned? Yes. Do I think that there are many other firms that can be a full service shop for clients? No. And I think it probably is too late in the curve to try to go out and build that now, at least as it relates to the sort of AI boom in some of the adjacencies that I was mentioning.

Host: That was Paul Kukish and Alex Kelly with Latham & Watkins, speaking with Mahira Dayal. And that’ll do it for today’s episode of On the Merits. For more updates, visit our website at news.bloomberglaw.com. Once again, that’s news.bloomberglaw.com.

The podcast today was produced by myself, David Schultz. Our editors were Chris Opfer and Alessandra Rafferty. And our executive producer is Josh Block. Thanks, everyone, for listening. See you next time.