Global Acquirer Trends, Q1 2026: Decline in deal activity masks regional divergence

Key trends

• Global deal volumes continued to soften, falling 8% year-on-year and 3% from Q4 2025.
• Cross-border M&A also declined by 8% from the previous year and 4% from last quarter, though trends varied significantly by region.
• North America and APAC inbound activity rebounded strongly, up 98% and 40% quarter-on-quarter, respectively.
• Across the regions of Europe, including UK&I, Continental Europe and Nordics, sharp declines in inbound volumes led to an overall decrease in deal volumes, despite stronger domestic activity.
• Large cap deal activity fell 13% this quarter, following a surge at the end of 2025, with North America accounting for the majority of the largest transactions.

North America and APAC rebound highlights regional divide

Geopolitical and economic uncertainty continues to weigh heavily on M&A activity across the deal size spectrum. The latest Global Acquirer Trends data analysed by Arrowpoint Advisory shows that overall deal volumes continued to decline by 8% year-on-year and 3% compared to the previous quarter (Q4 2025).

Cross-border M&A activity followed a similar trajectory at the aggregate level, declining 8% year-on-year and 4% quarter-on-quarter. However, this headline trend masks significant regional divergence, with strong recoveries in some territories offset by continued weakness in others.

North America saw a quite dramatic improvement in inbound activity (from overseas acquirers), with volumes increasing 98% quarter-on-quarter and 62% year-on-year. The rebound was evidenced across sectors; however, a majority of transactions in this market originated in Business Services, which saw 23% growth. Investors seeking to add capability and scale, particularly in AI, Software and Energy Infrastructure, were a core driver behind dealmaking in North America, in addition to the relative weakness of the global economy driving investors to seek opportunities outside of their own territories. Domestic M&A activity also increased 7% quarter-on-quarter, although declined 9% compared to the first quarter of 2025.

APAC similarly recorded a strong recovery in inbound investment, with total deal volumes up 40% quarter-on-quarter and 34% compared to Q1 2025. This was driven by a resurgence in large-scale transactions, particularly in AI, Semiconductors and Technology more broadly, and an apparent renewed confidence in China’s market stability and corporate governance reforms in Japan. Nevertheless, domestic activity in the region fell 33% quarter-on-quarter.

Across Europe, including UK&I, Continental Europe and the Nordic region, deal activity fell. Domestic transactions did grow across each of these regions, to varying degrees, but not enough to offset the decline in cross-border activity.

UK&I saw one of the sharpest declines in cross-border activity across all regions, with inbound volumes falling 47% from the previous quarter. The relatively strong growth in domestic dealmaking of 24% quarter-on-quarter was not enough to mitigate an overall decline in transaction activity. More sluggish economic growth in the UK, as well as perceived policy and tax uncertainty, may have contributed to the relative decline in UK&I’s attractiveness for foreign investors.  

Continental Europe experienced a similarly challenging environment for cross-border M&A, with inbound volumes down 40% both quarter-on-quarter and year-on-year. Although domestic M&A activity was more robust, rising 21% from the previous quarter, it was again a picture of an overall decline.

The number of large cap deals normalised in Q1 2026, following a surge towards the end of 2025. Growth continues to be driven primarily by domestic transactions, which remain relatively stable, while inbound megadeals are more volatile and unevenly distributed. North America dominated both scale and momentum, with almost 60% of the largest transactions. Europe and APAC show weaker and less consistent trends.

Conflict to reinforce shift towards domestic M&A

The war in Iran began towards the end of Q1 2026, with the collateral consequences likely to manifest into dealmaking data in the coming quarters. In the short-term, it is likely to place downward pressure on volumes, particularly on cross-border M&A. However, the conflict is a further reminder of the acute importance of energy security, significant supply chain vulnerability with the Middle East acting as a global chokepoint, and technological sovereignty, which may intensify investor focus on sectors and assets that reduce external dependence. This points to a continuation of the trend towards more domestically driven dealmaking and a relative retrenchment in cross-border activity, as the volatility across global M&A markets becomes too great to simply attempt to price in.

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