Dive Brief:
- U.S. mergers and acquisitions valued at more than $100 million surged 43% in value and 25% in volume last month compared with March 2025 as demand for artificial intelligence capabilities overrode concerns about supply shocks and other economic uncertainties, according to EY.
- As expectations between buyers and sellers better aligned, the value of large deals among technology companies rose 31% last month, with the sectors of consumer products and retail, life sciences, and power and utilities showing triple-digit percentage gains, EY said.
- “Mega-deals are re-emerging, with U.S. M&A deal value rising sharply as companies concentrate capital into fewer, larger transactions,” Linda Hill, EY global and Americas consumer and health leader, said in a LinkedIn post. “The shift toward fewer, bigger bets signals a more deliberate phase of deal-making.”
Dive Insight:
Dealmakers will need to take into account several economic strains in coming months, according to EY-Parthenon Chief Economist Greg Daco. Conflict in the Middle East will probably lead to higher commodity prices, tighter financial conditions and stresses on supply chains, he said.
U.S. economic growth will likely slow this year to 1.7% from 2.1% in 2025, and higher energy costs will probably fuel a 3% gain this year in the headline personal consumption expenditures index, Daco said.
The Federal Reserve, which seeks to cap long-term inflation at 2%, will probably react to persistent price pressures by trimming the main interest rate by a quarter point just once this year, he said.
Yet the central bank this year may forgo a cut to borrowing costs and, in its next policy change, raise the federal funds rate, Daco said.
Traders in interest rate futures see 61.4% odds that the Fed will reduce the main rate by no more than a half percentage point by the end of this year, according to CME Group’s FedWatch Tool.
Still, dealmaking in coming months will “likely remain strong due to ample capital and favorable regulatory conditions, focusing on strategic transactions and platform growth," EY said.
Technology companies focused last month on deals that built AI infrastructure and computational power, EY said. They prioritized investing in assets involving cloud computing, networking and photonics.
“Despite ongoing macroeconomic uncertainty, robust deal activity is expected to continue,” EY said.
