Corporate deal-making proved resilient in the first quarter of the year as global M&A totals exceeded $1.2 trillion, according to LSEG data, even as geopolitical turmoil and volatile valuations persisted. The tally marks a record by value, reflecting a trend toward fewer but larger transactions - the number of deals fell 17% from the same period a year earlier, while aggregate value climbed 26%.
Dealmakers pointed to a mix of strategic drivers and evolving market behaviour as reasons buyers and sellers continued to transact. Four of the six largest transactions recorded during the quarter involved companies that investors view as leading in artificial intelligence - a development that helped shape the M&A landscape in the opening months of the year.
Big Tech and large equity investments dominated the quarter. There were 22 transactions exceeding $10 billion signed in the three months to March 31, a quarterly record, the data shows. A significant portion of the largest deals took the form of equity stake purchases rather than traditional acquisitions - a pattern that reflected investors' appetite to secure exposure to AI leaders. OpenAI's $110 billion funding round accounted for three of the largest transactions, while a $30 billion fundraising by Anthropic was tied for the fourth-largest deal of the quarter. Overall, equity stake purchases comprised 29% of total deal volume for the period, LSEG said.
Industry insiders said the recent upsurge in hostilities in the Middle East - marked by U.S. and Israeli strikes on Iran at the end of February - has not materially chilled corporate appetite for transactions. That contrasts with the pause in deal activity seen last April following U.S. President Donald Trump’s so-called "Liberation Day," which prompted a global trade war and sidelined deals for months.
"This time around people aren’t waiting for things to get better, they are recognising that volatility is just part of life and they are working within that construct," Sam Kim, global head of M&A at Deutsche Bank, said. "The conversations aren’t stopping; companies are figuring out a way to make a deal to happen in this environment rather than waiting for things to normalise again. This is the new normal." George Holst, global head of corporate coverage, sectors & advisory at BNP Paribas, added that his bank's deal pipeline for the year was up by more than 20% both by deal count and value compared with last year.
Beyond AI-related transactions, multinational deals were a central theme. Cross-border activity rose sharply, increasing 47% from a year earlier to a record $454.7 billion in the quarter. The United States was the most targeted destination, accounting for 52.4% of cross-border transactions so far this year, followed by the United Kingdom at 11.5%.
Dealmakers said the appeal of cross-border deals includes diversification of growth exposure and potential insulation from region-specific troubles like supply chain disruption. "Cross-border corporate activity is a defining trend we’re seeing," Andrew Woeber, global head of M&A at Barclays, told Reuters. "CEOs and boards aren’t waiting for perfect conditions." A notable cross-border move was U.S.-based McCormick’s announcement that it would buy Unilever’s food business in the U.K., a deal that creates a roughly $65 billion global food company. In another large transaction, France’s Engie announced a $21.3 billion acquisition of UK Power Networks.
Market participants described a more selective approach to deal-making amid price swings and sector-specific valuation shifts. War in the Middle East has produced unprecedented oil supply disruption, steep oil price spikes and wide valuation gyrations, and corporate boards are reportedly applying greater strategic discipline when evaluating transactions.
"Deals are driven by strategic rationale which is stronger than short-term volatility in the market," said Philipp Beck, head of EMEA M&A at UBS Investment Bank. He cautioned that if volatility were to persist for months rather than weeks and materially alter inflation, interest rates and growth expectations, deal dynamics could change. "We have seen a series of market disruptions over the last couple of years and market participants have learned to deal with these shocks," he added.
At Morgan Stanley, Global Co-Head of M&A John Collins said corporate clients continue to view M&A as an important lever for growth. He suggested that, should volatility moderate, activity could resemble the robust second half seen last year. Bankers and analysts indicated that strategic rationale, defensive positioning and the pursuit of growth remain key motivators for transactions even in a turbulent environment.
What this means for markets and sectors
- Big Tech and AI-related investments are a principal driver of deal value this quarter, concentrating activity among a handful of large transactions and equity funding rounds.
- Energy markets and companies exposed to oil supply are implicated by geopolitical disruptions that are influencing valuations and corporate risk assessments.
- Cross-border deals surged, highlighting demand for diversification and local economic presence in higher-growth markets such as the United States.
The first quarter's trend toward fewer, larger transactions - especially in the form of equity stakes in AI winners - illustrates how strategic imperatives and investor demand for exposure to disruptive technologies are reshaping M&A. Banks report fuller pipelines and an inclination among corporate leaders to act despite volatility, a posture that has sustained record values even as deal counts slipped.