Corporate dealmaking has defied geopolitical turbulence to deliver a record opening quarter, with global mergers and acquisitions surpassing $1.2 trillion in the three months to March 31, according to LSEG data. The figures signal that boardrooms have stopped waiting for calmer conditions and begun treating volatility as a permanent feature of the dealmaking environment.
Although deal volumes fell 17% year on year, the average transaction size grew significantly, pushing total value up 26%. The gap between those two figures tells the essential story of the quarter: fewer deals, but considerably larger ones.
AI reshapes the deal landscape
Artificial intelligence was the dominant force behind the quarter’s biggest transactions. Four of the six largest deals involved companies investors regard as AI winners, with OpenAI’s $110 billion funding round alone accounting for three of them. Anthropic’s $30 billion capital raise ranked as the fourth largest transaction of the period. Notably, all four were equity stake purchases rather than conventional acquisitions, a structure that now accounts for 29% of total quarterly deal volume, reflecting how capital is increasingly flowing toward AI dominance without full corporate consolidation.
The picture was markedly different for software companies perceived as vulnerable to AI disruption. Dealmaking in that segment slowed as falling valuations reduced both the appetite and the arithmetic for transactions.
Volatility reframed as normal
The Iran conflict, which has driven unprecedented oil supply disruption and sharp swings in company valuations since late February, has done little to suppress deal appetite. Bankers attribute this to a fundamental shift in corporate psychology. As Sam Kim, global head of M&A at Deutsche Bank, put it, companies are no longer waiting for conditions to normalise. They are building deals within the turbulence itself.
UBS Investment Bank’s Philipp Beck echoed the sentiment, noting that strategic rationale consistently outweighs short term market noise, provided volatility does not persist long enough to distort inflation and interest rate forecasts.
Cross-border deals hit record highs
Cross-border activity rose 47% year on year to a record $454.7 billion, with the United States absorbing 52.4% of inbound transactions and the United Kingdom accounting for 11.5%. The McCormick and Unilever food merger, valued at $65 billion, was the standout cross-border deal of the quarter. For European companies facing sluggish domestic growth, acquiring a US presence offers both market exposure and a degree of insulation from American tariff pressure.
With deal pipelines at major banks reportedly up more than 20% by both number and value, the second quarter looks no quieter.
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