Businesses have been told they need to get on the front foot when it comes to mergers and acquisitions (M&A) as the sluggish level of transactions continued in the third quarter of the year.

A survey conducted by the Diligent Institute, in partnership with Wilson Sonsini, Oracle NetSuite, CFO Alliance, and the CFO Leadership Council, revealed that 97% of organisations cite major challenges in transaction readiness, impeding their ability to seize strategic opportunities.

Despite the current economic and geopolitical uncertainties, nearly half of surveyed organisations (49%) are still prioritising mergers and acquisitions or strategic partnerships as part of their growth strategy, but most face significant hurdles in executing these deals effectively.

The report, which included responses from 200+ global executives and governance professionals, examined the current state of transaction readiness – the ability for organisations to efficiently navigate complex transactions such as M&A and capital deals. Only 4% of respondents reported that their GRC and financial systems are fully integrated and ready for major transactions, highlighting vulnerabilities that leave organisations exposed and slow to capitalise on strategic opportunities. Additionally, the survey identified several key obstacles that further impede transaction readiness including economic uncertainty (35%), limited resources (56%), lack of experienced personnel (28%) and insufficient board alignment around transactions (31%).

“Organisations that fail to address their glaring transaction readiness gaps risk falling behind in the deal-making landscape,” said Dottie Schindlinger, executive director of the Diligent Institute. “Our research points to a clear need for prioritisation at the board level, defining roles and processes, and enhancing data quality. The transaction readiness gap is real and yet entirely addressable.”

In response to these challenges, 49% of respondents have delayed deals, 40% have enhanced due diligence and 46% have adjusted their financial modeling in response to economic uncertainty. These actions reflect a more cautious and measured approach to M&A activity, as seen in recent global trends where market volatility has led to decreased deal activity and increased scrutiny of potential investments.

“The volatile economic landscape and rapid market shifts requires not only operational efficiency but also strategic legal planning and risk management,” said Rich Mullen, Partner in Wilson Sonsini’s M&A Practice. “Now is the critical moment for leaders to understand how top-performing organisations are preparing for major deals, enabling them to transition from episodic preparation to an ‘always on’ business discipline.”

The survey also revealed that adoption of AI in transaction processes remains limited, with only 5% of respondents currently using AI-powered evaluations or data collection. However, interest is growing as organisations are starting to leverage AI-powered tools to enhance strategic analysis, compliance and due diligence, indicating a potential future shift toward more sophisticated transaction management practices.

Scott Bridgen, GM Risk & Audit, at Diligent added:  “The findings from the Transaction Readiness Report don’t come as a surprise considering the state of M&A in the UK. Earlier this year, PwC revealed that H1 2025 saw M&A volumes in UK down by around 19% compared to H1 2024. We’ve seen that, at least on a global scale, this trend is holding steady as we progress through H2. There’s no doubt that for the UK market, economic uncertainty is a big reason behind this. From tariffs to ongoing conflicts, geo-political activity affecting the UK market is undoubtedly making investors and business leaders hesitate.

“As we shift towards the final quarter of the year, we expect to see a small boost in M&A ahead of the Autumn Budget, as organisations try to get ahead of possible changes to tax. It’s critical that they should be looking to be on the front foot now by focusing on improvements to board visibility and technology.”