Corporate M&A | Global M&A deal value exceeds 9 trillion in the first quarter, reaching a new high

Despite the impact of the Iran conflict, data from the London Stock Exchange Group (LSEG) shows that corporate M&A activity has not been clearly dampened so far. Global M&A deal value hit a new high in the first quarter, recording more than $1.2 trillion (about HK$936 billion); deal participants add that more deals are in the works.

From January to March this year, the number of deals fell 17% year on year, but the size of the companies involved on both the buy and sell sides was larger, driving total deal value up 26%. Among the six largest deals, four involved companies that investors view as having won the race in artificial intelligence (AI).

After U.S. President Trump’s tariff measures last April sparked a global trade war and led M&A activity to stall for several months, bankers and analysts say that, by comparison, the escalation of the Middle East conflict has not so far clearly curbed deal-making enthusiasm since the end of February, when the U.S. and Israel launched attacks on Iran.

Sam Kim, global head of M&A at Deutsche Bank, said negotiations have not stopped. Companies are finding ways to get deals done in the current environment rather than waiting for the situation to return to normal again. This is the new normal.

Philipp Beck, head of M&A for Europe, the Middle East and Africa (EMEA) at UBS Investment Bank, said M&A is often driven by strategic considerations, and their force is stronger than short-term market volatility. If volatility persists for months rather than weeks and disrupts inflation, interest rates, and growth expectations, then the situation could change—but it has not reached that point yet.

M&A deal participants noted that, as investors sell off stocks and valuations decline, deal-making involving software companies viewed as AI losers or vulnerable to AI disruption has slowed down. Beyond AI and large tech companies, market focus is also concentrated on cross-border deals, which can withstand some economic weakness in certain countries and also diversify local risks such as supply-chain disruptions.

Cross-border M&A in the first quarter grew 47% year on year to a record $454.7 billion. The U.S. was the most favored destination, accounting for 52.4% of cross-border deals since the start of this year; the U.K. ranked second with an 11.5% share.

For European companies facing prospects of slowing domestic growth, acquiring U.S. assets may be particularly appealing, because U.S. growth is stronger, company valuations are higher, and building a business presence locally can also help companies mitigate U.S. tariffs.