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This article first appeared on Diligent Market Intelligence's Activism newswire. To register for a demonstration and trial of the product, click here.
As M&A picks up, a wider cohort of investors is increasingly turning to activist tactics to oppose deals they believe fail to meet value expectations. According to Diligent Market Intelligence (DMI) data, 30 U.S.-based companies saw activists stand in the way of a proposed transaction in 2025, up almost 58% on 2024. The trend was also reflected in Asia where 11 companies faced such demands, up from just six in 2024. At 80% of such U.S. situations, occasional activists – defined by DMI as those for whom activist investing does not typically comprise a frequently used strategy - were behind demands. "A broader pool of activists has jumped in the deep end of not just M&A activism in terms of public push for sales or spinoffs or divestitures but publicly committing to voting against a transaction and rallying other investors," Bill Dooley, head of U.S. M&A and activism at Sodali & Co., told DMI. Rising success rates Activist opposition to M&A is not only becoming more common but more effective with 35.3% of such demands achieving objectives in 2025, up from 24.1% in 2024. "I think it really just comes down to the economic terms because if the transaction makes financial sense, investors will go along with it. If they're getting a raw deal, then they are ready and willing to step up and oppose it. They have the tools," said Ryan Nebel, vice chair of the shareholder activism practice at Olshan Frome Wolosky. Several outcomes underscored that dynamic during the year. Of 30 contested deals with a recorded outcome, at least five collapsed amid activist pressure. STAAR Surgical failed to garner sufficient shareholder support for its merger agreement with Swiss eyecare giant Alcon following a months-long campaign by top investor Broadwood Partners and others. In tech, Core Scientific shareholders rejected a proposed sale to AI cloud provider CoreWeave after investor Two Seas Capital argued the deal undervalued the company and failed to capture upside tied to AI infrastructure growth. TaskUs also saw its founder-led take-private proposal voted down amid opposition from Murchinson and Think Investments, while founders at WM Technology withdrew their buyout offer last June after public pushback from TMR Capital. Similar pressure emerged outside of tech. Travel company Inspirato terminated its proposed merger with marketing platform Buyerlink after “listening to the perspective” of shareholders, including activist investor Clint Coghill’s Stoney Lonesome and the company’s co-founders. Amplify Energy also abandoned its planned merger with Juniper Capital in April after sustained investor opposition, even after the buyer added a $10-million cash sweetener. Small caps in the crosshairs Smaller companies accounted for the majority of activist resistance to M&A during the period, representing more than 60% of the 30 contested transactions in 2025, with tech, healthcare, consumer and real estate drawing some of the most scrutiny. The trend reflects growing investor focus on the small-cap universe, which is widely viewed as fertile ground for both dealmaking and broader reform due to perceived valuation gaps and prolonged underperformance. That scrutiny is increasingly extending to artificial intelligence, which many expect to be a catalyst for both M&A and activism. "We believe AI represents a significant value creation opportunity for sophisticated acquirers and activists in terms of both growth and efficiency,” Sagar Gupta, portfolio manager at Anson Funds, told DMI. “Not all companies will benefit but for those that can, I think the delta between their standalone public markets value and their private value will widen, potentially driving more M&A with AI at the heart of the investment thesis." Observers told DMI that no sector is immune from heightened M&A activism as investors grow more willing to challenge transactions across the market. "M&A activism is cropping up in all sorts of industries right now. In tech, there is a lot of focus on AI and activists are following that too. Regulated sectors like banking are also seeing activity which had not been historically true," noted Elizabeth Bieber, partner at Freshfields.
