Global deal activity disappoints, M&A revenue falls as Trump pursues tariffs

Echo Wang, Charlie Conchie and Anousha Sakoui

Tue, Apr 1, 2025, 3:02 AM 6 min read

By Echo Wang, Charlie Conchie and Anousha Sakoui

(Reuters) - A global trade war kicked off by U.S. President Donald Trump and the ensuing market turmoil soured bankers' predictions for a robust start to a blockbuster year for deals on Wall Street.

First-quarter mergers and acquisitions volume rose 12.6% to $984.38 billion from year-ago period, Dealogic data compiled for Reuters showed. This was due almost entirely to the Asia Pacific region where three large state-run deals announced by China on Sunday and a ports deal driven by Trump helped nearly double M&A volume from last year.

Bankers worldwide are paring back deals and generating less revenue. In the U.S., which accounts for almost half of global M&A transactions, first-quarter volume slipped 13% to $436.56 billion. And while IPO activity increased, a prolonged trade war will make it less palatable in the future, said Matt Witheiler of Wellington Private Investments.

"Could they go public? Sure anybody can go public at any time, if the fundamentals are good. But is it worth the brain damage and potential price that you go public at? Probably not," Witheiler said.

New stock offerings rose about 4.1% to $160.22 billion, but some recent initial public offerings have failed to impress and the number of offerings fell 17.7% to 1,065 according to Dealogic data.

"A lot of the deals that were announced in the first quarter were generated last year at a time when there was increasing exuberance with a potentially new administration in the U.S., with the expectation of tax cuts and deregulation," said Cassander Verwey, JPMorgan's co-head of M&A in Europe, the Middle East and Africa.

"Given the developments over the last weeks the reality is that exuberance has left the market and more uncertainty has creeped in."

Wall Street executives and analysts had predicted a banner 2025, expecting Trump to slash regulations, lower taxes and enact more pro-business policies. But U.S. stocks have fallen sharply since his inauguration, and the hoped-for scenario looks less likely by the day, analysts and dealmakers said.

Verwey said M&A markets need confidence and some potential deals were abandoned because of the uncertainty.

Bankers fear a three-year slowdown in deals will drag on. Globally, investment banking fees through Wednesday fell 4.9% to $21.47 billion from the year-ago period, the Dealogic data showed. The deal total for 2025 has fallen 25% to 7,629, a 20-year low. Analysts have already started trimming first-quarter earnings forecasts for some of the biggest banks that advise on M&A deals.