Global M&A in the first quarter surpasses $1.2 trillion! AI frenzy reshapes the landscape, transaction volume surges 26% against the trend.

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The global M&A market has shown remarkable resilience amid geopolitical turmoil and market volatility.

According to Reuters, data from the London Stock Exchange Group shows that in the first quarter of 2026, the total global M&A transaction value exceeded $1.2 trillion, up 26% year-on-year, setting a historic high for the period. Although the number of transactions fell by 17% year-on-year, individual deal sizes have increased significantly, with AI-related transactions and cross-border M&A emerging as the main drivers.

Unlike last year when Trump's “Liberation Day” tariff policy led to a stall in M&A activity, the outbreak of Middle East conflicts at the end of February this year has had a limited impact on companies' willingness to pursue mergers. Sam Kim, Global Head of M&A at Deutsche Bank, stated, “This time, people are no longer waiting for the situation to improve, but recognize that volatility is a normal state, and are advancing deals under this framework.” George Holst, Global Head of Advisory at BNP Paribas, revealed that the bank’s M&A pipeline this year has grown more than 20% in both value and deal count compared to last year.

AI deals dominate large mergers, equity investments trend emerges

Large transactions have dominated market dynamics this quarter.

LSEG data shows that there were 22 deals over $10 billion in the first quarter, a record for any single quarter. Of the six largest deals, four were directly related to AI. OpenAI’s $110 billion financing round occupied three spots among them, and Anthropic’s $30 billion financing was tied for fourth.

Notably, all four of these deals were equity investments, rather than traditional mergers or acquisitions. LSEG data shows that such equity deals accounted for 29% of total transaction volume this quarter, and this trend is accelerating.

Meanwhile, software companies regarded by the market as “losers” in AI competition or vulnerable to AI disruptions have seen a marked cooling in M&A activity. Investors continue to offload related stocks, depressing valuations, M&A traders said.

Market turmoil fails to block deals, companies adopt more cautious strategies

Middle East conflicts have caused unprecedented shocks to oil supply, sharp oil price swings, and significant corporate valuation volatility, but corporate boards’ response is to raise screening standards, not to abandon M&A.

Philipp Beck, EMEA Head of M&A at UBS Investment Bank, said, “The driver for M&A is strategic logic, which is more fundamental than short-term market volatility.” He added, if volatility continues for months rather than weeks and affects inflation, interest rates, and growth expectations, “then market dynamics may change, but we have not reached that point yet.”

John Collins, Co-Head of Global M&A at Morgan Stanley, commented that corporate clients still see M&A as an important driver of growth strategy: “If volatility subsides, we may see activity reminiscent of last year’s busy second half.”

Cross-border M&A surge, U.S. becomes biggest target market

Cross-border M&A has become another central theme this quarter. LSEG data shows cross-border M&A value grew 47% year-on-year in the first quarter, reaching $454.7 billion, the highest for the period since 2002.

The U.S. is the most favored M&A target market, accounting for 52.4% of cross-border deal value, with the UK second at 11.5%. Notable transactions include: U.S. spice giant McCormick’s acquisition of Unilever’s UK food business, forming a $65 billion global food giant post-merger; French firm Engie last month announcing the $21.3 billion acquisition of a UK electricity network company.

Andrew Woeber, Global Head of M&A at Barclays, said, “Cross-border corporate activity is a decisive trend we are witnessing; CEOs and boards are no longer waiting for the perfect timing.” BNP Paribas’ Holst noted that for European companies facing slowing domestic growth, completing deals in the U.S. is particularly attractive—U.S. has stronger growth, higher corporate valuations, and local capacity that can offer tariff protection.

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