Record number of megadeals agreed in first quarter of the year

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A record number of megadeals were agreed in the first quarter of the year as companies shrugged off war in the Middle East and a shakeout in the software sector to propel mergers and acquisitions to $1.2tn globally.

A total of 22 deals valued above $10bn were agreed in the past three months, the highest-ever quarterly figure, according to LSEG data, surpassing the previous record of 21 deals agreed in the fourth quarter of 2015. It cemented the third consecutive $1tn quarter for dealmaking.

“It’s extremely busy,” said Viktor Sapezhnikov, public company M&A chair at DLA Piper. “There’s no trace of the risk-off mentality that companies took following liberation day,” he added, when US President Donald Trump announced his tariff regime last April.

March wrapped up with a number of large deals. On Tuesday, Unilever offloaded its food division to spice maker McCormick, which will create a group with a combined enterprise value of nearly $66bn. While Eli Lilly and Biogen both struck biotech acquisitions valued at more than $5bn, and a day earlier, food distributor Sysco agreed to buy wholesaler Jetro Restaurant Depot for $29bn.

Dealmaking was particularly busy in the US where there were $629.8bn worth of transactions in the first three months of 2026. The sum fell just short of the $630bn of deals agreed in the first quarter of 2021, the busiest start to the year on record and the high point of a pandemic-induced frenzy.

The uptick in dealmaking comes despite operations by the US and Israel in Iran driving oil prices over $100 per barrel and jitters over the effect of AI on software companies and private credit’s exposure to the sector.

“Boards are now asking management: ‘Everyone else is doing stuff, what are you doing?’” said George Sampas, co-chair of Gibson Dunn’s M&A group. “CEOs, although they are less optimistic than a few months ago, still see an administration which is receptive to large deals.”

Some of the other biggest deals of the quarter included Global Infrastructure Partners and EQT’s $33bn take-private deal for energy provider AES, Devon Energy and Coterra Energy’s tie-up to create a nearly $60bn shale-drilling group and the all-stock merger of insurers Equitable and Corebridge.

But risks abound: the fallout of high prices at the petrol pump because of conflict in the Middle East has yet to trickle down into the wider economy and instability in private credit markets could also make it more difficult to finance deals.

Moreover, there is a large backlog of private equity-owned companies that have not yet been sold. The number of private equity-backed deals was down 12 per cent to a six-year low, despite the total dollar value of sponsor-backed deals totalling $314bn globally in the first quarter.

“Deals are very opportunistic and fuelled by big strategic transactions, while the regular-way private equity deal machine remains active, albeit more discerning, across the market,” said Eric Wedel, a partner at Paul Weiss who runs the firm’s Los Angeles office. 

Outside of the US, dealmaking in Europe climbed 82 per cent in the quarter to reach $307bn, with milestone transactions including the sale of centuries-old UK asset manager Schroders for £9.9bn to US fund manager Nuveen. Cross-border mergers were up 47 per cent.

“The market reaction to the [Middle East] conflict may present opportunities for others to take action at potentially depressed prices and go ahead and accelerate” deals under consideration, said Oliver Lazenby, a partner at Freshfields.

If there is resolution to the conflict that may yet spur more deals. But the downturn in software stocks may mean that technology dealmaking, typically the biggest sector for M&A activity, could remain muted, potentially restraining dealmaking overall.

“Unless the conflict persists, we’re likely going to feel good about 2026, but I don’t know if we’re going to beat 2025 because the possible slowdown in a sector as big as tech is very punitive to beating records,” said Guillermo Baygual, Citigroup’s co-head of M&A.