MW M&A activity falls as Wall Street clients tap the brakes on deals

By Steve Gelsi

Sycamore's $44 billion takeover of Walgreens Boots Alliance pushes up Q1 dollar total, but the number of deals declines

The dealmaking slowdown cited by investment banks has been borne out by a drop in the number of mergers in the first quarter, according to S&P Global Market Intelligence.

Companies announced 4,110 merger deals in the first quarter, down 4% from the 4,299 in the year-ago quarter and 12% below the previous quarter's total of 4,665, according to S&P. (See chart below)

The drop in activity was recorded in first-quarter results by individual investment banks such as Goldman Sachs Group Inc. $(GS)$, Morgan Stanley $(MS)$ and the dealmaking arm of JPMorgan Chase & Co. $(JPM)$, as well as Citigroup Inc. (C), Bank of America Inc. $(BAC.SI)$ and Wells Fargo & Co. $(WFC)$.

M&A activity provides a lucrative line of business for these and other big banks, not only for advising on the deals, but also for raising trillions in financing on Wall Street to fund them.

But in the face of uncertainty around tariffs and other policy changes, the banks reported that clients have been pausing major deal decisions, despite the expectation in late 2024 that activity would accelerate.

Another unexpected development in the first quarter was speculation about the threat of competition to Nvidia Corp. $(NVDA)$ posed by DeepSeek.

On the plus side for first-quarter dealmaking, some large deals managed to get through, led by the $44 billion acquisition of Walgreens Boots Alliance Inc. $(WBA)$ by Sycamore Partners; the $32 billion purchase of Wiz by Alphabet Inc. $(GOOG)$ and the $29 billion acquisition of Calpine Corp. by Constellation Energy Corp. $(CEG.UK)$ (See chart)

This handful of larger deals helped push the first-quarter dollar total for mergers to $420.5 billion, ahead of the year-ago total of $397 billion and up from $314 billion in the fourth quarter.

Also read: Bank CEOs avoid criticism of tariff policies - but agree that clients want more clarity

-Steve Gelsi

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April 21, 2025 12:23 ET (16:23 GMT)

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