By Ben Glickman
Wall Street's visions of a deal bonanza under President Trump haven't materialized. That doesn't mean companies have been sitting around idle.
Flashy megamergers that generate blockbuster fees for dealmakers have remained few and far between, but plenty of relatively smaller buyouts valued at a few billion dollars are still happening. Outside the U.S., dealmakers have been on a spree relative to last year, especially in Europe and Asia.
It is also still early in the year, and some executives say they expect activity to pick up once the direction of Trump's policies and the stock market become clearer. That optimism recently got a boost with Google parent Alphabet's $32 billion deal for cybersecurity startup Wiz.
Here's how dealmakers have been keeping busy:
A little less flashy
The biggest deals -- those valued at $10 billion and more -- are down 28% by value globally through the first quarter, compared with the year-ago period. (The data don't include Elon Musk's Friday announcement that his AI startup acquired his X social-media platform.)
But relatively smaller deals are having their best start to the year since the 2021 pandemic-era M&A boom. Total deal value for transactions in the $1 billion to $10 billion range is up 38% from a year earlier through March 28, according to data from London Stock Exchange Group. The number of deals is up nearly 31%.
While companies seem to be holding fire on spending huge chunks of cash, investment bankers and lawyers say they may be more willing to go ahead with smaller transactions. Those are also less likely to attract the attention of antitrust regulators and are easier to finance.
In the U.S., PepsiCo agreed to acquire prebiotic soda brand Poppi for more than $1.6 billion. Mortgage giant Rocket Cos. agreed to buy online real-estate brokerage Redfin for $1.75 billion.
Location, location, location
Worldwide, overall deal activity in the first quarter increased 3.9% from a year ago, according to LSEG. But where deals are happening has shifted.
Deals of any size where the company being acquired is in the U.S. saw an 18% drop in value in the first quarter. Deals where the acquiring company was in the U.S. fell by a similar amount.
The U.S. is still the world's biggest market for dealmaking. But companies are facing a host of regulatory and economic uncertainties at home under Trump. Businesses overseas may have a greater sense of stability.
"There's a lot moving around the world as well, but you see less volatility," said Michael O'Bryan, an M&A partner at law firm Morrison Foerster. A strong dollar can also push U.S. companies to acquire overseas, he added. Factors unique to individual countries can motivate deal flow as well.
Dealmaking in Europe and Asia-Pacific has jumped so far this year, rising 8.4% and 5.2% from last year, respectively, though remaining well below 2021 levels. (LSEG categorizes deals by where the target company is based.)
Cross-border M&A, where the acquirer and target company are in different countries, accounted for 36% of deal value so far this year, up from 26% a year ago.
Not-so-sleepy sectors
Just how dead or alive dealmaking activity seems also depends on the industry.
Tech held on to its spot in the first quarter as the top sector for dealmaking, buoyed by Google's acquisition of Wiz. Other big transactions include SoftBank's $6.5 billion deal for chip-design firm Ampere and the private-equity buyout of software company SolarWinds for about $4.4 billion.
Healthcare companies were active as well, driven by drugmakers eager to fill their pipelines for new treatments. In the U.S., Johnson & Johnson spent more than $14 billion for Intra-Cellular Therapies, which is developing treatments for neurological disorders. Eli Lilly, Sanofi and AstraZeneca have announced deals in the low billions aimed at acquiring new treatments.
And in one of the biggest leveraged buyouts in recent memory, Walgreens Boots Alliance sold itself to private-equity firm Sycamore Partners for about $10 billion.
Write to Ben Glickman at ben.glickman@wsj.com
(END) Dow Jones Newswires
March 31, 2025 07:00 ET (11:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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