Global mergers and acquisitions activity has slowed since the outbreak of the latest Middle East conflict, with senior bankers noting that several deals have been put on hold. Still, they remain confident that dealmaking will recover as companies grow more accustomed to geopolitical disruptions, while also exploring revised deal structures to better manage risk.
The US/Israel-Iran conflict began on February 28. M&A activity had been strong through February, with global announced deals reaching $196 billion in the week starting February 22—the fourth-highest weekly total since early 2024. Activity then dropped to $94.2 billion in the week of March 1 and further declined to $31.1 billion in the week of March 8—an 84% fall from pre-war levels and the lowest weekly figure since Christmas week 2024, according to LSEG data.
Between March 1 and 18, 2026, total announced M&A volume stood at $167.3 billion, down 31% year-on-year and 17% below the five-year average for the same period.
Although M&A figures can be volatile, several bankers said deals have largely been paused rather than cancelled. Some firms have delayed planned announcements, even as pipelines remain active. The timing and completion of deals will depend heavily on how long and how severe the conflict becomes, particularly its impact on energy prices and inflation.
Bankers emphasised that past crises show the importance of keeping processes moving rather than halting activity altogether. As Andrew Woeber, global head of M&A at Barclays, put it, companies should continue progressing deals while adjusting pace as needed.
To navigate uncertainty, dealmakers are increasingly modifying transaction structures. Financing remains a key concern, with buyers seeking more flexible arrangements—such as floating-rate instruments, shorter maturities, and expanded currency or interest-rate hedging. Some are also willing to contribute more equity to create a stronger buffer against volatility, even if it slightly reduces returns.
Additional due diligence is also becoming more common, particularly around supply chain resilience in the face of prolonged conflict or energy market disruption.
Another approach gaining traction is the use of contingent value rights (CVRs), which provide shareholders with additional payouts if certain post-deal milestones are achieved. While historically rare, their usage has increased significantly amid rising geopolitical uncertainty, helping bridge valuation gaps in volatile conditions.
Despite near-term caution, bankers believe deal activity could benefit from opportunities created by market dislocations, as seen after past crises. While some transactions may be abandoned if the conflict drags on or energy prices remain elevated, others could emerge as companies reposition supply chains or pursue strategic expansion.
Many corporate leaders now view geopolitical volatility as a normal part of the business environment and are more willing to push ahead with deals, provided risks can be managed. Strong liquidity, moderate interest rates, and improved regulatory engagement are also expected to support ongoing deal flow.
Ultimately, bankers say the strategic need for growth and scale remains a powerful driver, suggesting that many transactions will withstand current market turbulence and eventually be completed.
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