Mere months ago, the prevailing view among M&A professionals was that 2025 would be easy street. Well, that didn’t pan out. Whether the current US trade policy is folly or long-term genius isn’t for us to judge – dealmakers simply have to take the year as we find it. Datasite’s recent report, Deal Drivers: Americas Q1 2025, does exactly that. Let’s take a look at the first quarter’s hottest topics, and see what these might mean for the year ahead.

Tariff turmoil leaves forecasts in tatters

The year dawned full of promise for dealmakers, with the US in particular showing plenty of green shoots. Strong GDP, post-election confidence, and the prospect of imminent deregulation, had investors raring to go. Then events kicked in and reminded everyone that nothing in M&A is ever certain.

Trump’s imposition of tariffs in early April triggered a market wobble that wiped out a year’s worth of S&P 500 gains in just 45 days. Though stocks later rallied, the blow to confidence left a lasting bruise. Such policy shocks are spanners in the works of dealmaking, with tariffs muddling earnings visibility, widening the gaps between bids and asking price, and generally making valuations a nightmare. Meanwhile cross-border synergies, typically the cornerstone of big deals, have transformed into potential liabilities. Playbooks are having to be torn up and rewritten from scratch.

A notable casualty of the chaos is Mexico, with its recent promising strategy of nearshoring. Its integrated supply chains put in place under the USMCA are suddenly in jeopardy, rattling the hard-won confidence of sectors such as automotive and electronics.

But dealmakers are already adapting to the new climate. Deal volumes are down across the Americas, plunging 27.7% year-on-year to just 2,657 deals, but total value remains historically high at US$540bn. Large-scale strategic deals are – for the present, at least – taking up the slack. But if the trade tensions persist, then dealmakers may need to reassess both their pricing models and their attitudes to geopolitical risk itself.

TMT's dazzle hides a murkier picture

Do we now take it for granted that the technology, media, and telecom (TMT) sector dominates M&A? Once again it hit the top spot in Q1 2025 for both value and volume – but beware the distortion effect.

More than 20% of that value came from a single mega-deal, Google’s US$32bn acquisition of cybersecurity firm Wiz. Take that away, and TMT seems to be plateauing or even declining (volumes are down year-on-year by 20.4%). One of the few regions to post a spike in deal value was the Southern US – its gain of 152% largely thanks to Sun Belt migration, booming IT services in Texas, and data center consolidation.

Clearly, the sector’s dominance can no longer be taken for granted, despite some healthy recent activity across nearly all regions. From SoftBank’s acquisition of Ampere in the West, to the tech corridor consolidations in the Northeast and South, dealmakers are still betting big on AI infrastructure, digital security, and scalable cloud platforms. But valuations are becoming more skeptical and investors more cautious, proving that even TMT isn’t immune to the market jitters.

Dealmakers chase the biggest fish

The most striking trend of Q1 is that dealmakers are going after major strategic transactions, the long-term game-changers, while the smaller fish in the market go largely ignored. Consider Canada. It saw a stellar 92% year-on-year rise in deal value thanks to industrials and energy mega-deals, coupled with the steepest drop in deal volumes (nearly 39%).

Meanwhile in Brazil, where the M&A market is wilting under pressure from soaring interest rates and inflation, deal volume fell 35.4% to a three-year low. Yet even here, bright spots persist: industrials saw a 30-fold increase in value, powered by Sherwin-Williams’ US$1.2bn acquisition of BASF’s local paints business.

Even up in the Northeastern US, which leads potential deal flow with 763 companies flagged as targets, both volume and value declined significantly year-on-year. Nevertheless, buyers have not been shy about making big bets on must-have assets in the Northeast’s flourishing tech and pharma sectors.

These regional contrasts suggest too that localized economic conditions are increasingly shaping M&A outcomes. Dealmakers would do well to factor this into account when shaping strategies for the coming quarters.

The opening months of 2025 were a sobering reminder that M&A doesn’t happen in a vacuum, and that the best-laid plans are at the mercy of the political climate. In short, dealmakers need to keep one eye on the weather – which you can do in far more detail by accessing the full report, Deal Drivers: Americas Q1 2025, giving you an in-depth overview of current deal activity across the two continents.