Merger and acquisition (M&A) volume in the first quarter rose 12.6% year over year to $984.4 billion, Reuters reported Tuesday (April 1).
This increase was due nearly entirely to the Asia-Pacific region, where three large state-run deals announced by China over the weekend helped almost double M&A volume from 2024, the report said.
However, bankers worldwide are scaling back deals and generating lower revenues. In the U.S., which makes up nearly half of all global M&A deals, first-quarter volume fell 13% to $436.6 billion, per the report.
While initial public offering (IPO) activity is up, a protracted trade war will make it less attractive going forward, said Matt Witheiler of Wellington Private Investments, according to the report.
“Could they go public? Sure, anybody can go public at any time if the fundamentals are good,” he said, per the report. “But is it worth the brain damage and potential price that you go public at? Probably not.”
New stock offerings climbed about 4.1% to $160.2 billion, although some IPOs have had lukewarm receptions, with the number of offerings declining by 17.7% to 1,065, the report said.
Many first-quarter deals were generated last year when tax cuts and deregulation were expected, said Cassander Verwey of J.P. Morgan, per the report. However, the climate now is more uncertain.
The Reuters report is the latest in a series of similar reports on a downturn in dealmaking, following Wall Street exuberance that accompanied President Donald Trump’s return to the White House.
Then came the president’s tariff announcements — with more to come Wednesday (April 2) — ushering in economic uncertainty.
“Uncertainty in financial markets is not new, but the scope and speed of today’s disruptions are unprecedented,” PYMNTS wrote Tuesday, referring to the trifecta of “geopolitical tensions, fluctuating tariffs and economic unpredictability.”
“For good or bad, we’ve been through these times before,” Matt Carey, senior vice president, office of the CFO at FIS, told PYMNTS. “The question CFOs should ask is, ‘Do we really have good visibility into all of our liquidity management?’”
