Market disorder and political uncertainty framed the opening discussions at Tulane University’s Corporate Law Institute conference in New Orleans on March 19, where almost 1,000 prominent investment bankers and M&A lawyers gathered.
Delegates mingled over cocktails, crab cakes and gumbo as panels canvassed the pressures shaping dealmaking - from tariffs under the current administration to wars on several continents and the disruptive potential of artificial intelligence. Despite that unsettled backdrop, the dollar value of announced deals this year has surged to levels close to historic highs.
Stephan Feldgoise, co-head of global M&A at Goldman Sachs, opened the conference by asking, "Is instability the new normal?" He observed that the degree of market volatility on display would typically dampen M&A activity, yet transaction values are expanding. Feldgoise highlighted that while the total number of deals being signed has declined, the size of deals has increased, lifting overall activity to lofty levels.
According to Dealogic data cited at the event, more than $1 trillion in deals has been announced so far this year - an increase of 27% compared with the same point a year earlier. "M&A is running at an all-time high," Feldgoise said. "It is phenomenal."
Panelists noted that corporate boards largely retain a high degree of confidence even as the U.S.-Israeli war on Iran has produced sharp swings in oil prices and raised inflation concerns. Audra Cohen, co-managing partner of Sullivan & Cromwell’s general practice group, described it as feeling increasingly normal that uncertainty will persist.
Scott Barshay, chairman at Paul, Weiss, projected that 2026 could surpass the record year of 2021 for deal activity. He and other participants pointed to pressure from hedge funds and activist investors who press companies to simplify operations, a dynamic expected to fuel further M&A as firms spin off non-core assets. Panelists named activist investors such as Elliott Investment Management and Jana Partners as examples of shareholders that have quietly encouraged corporations to streamline.
Bankers at the conference said the drive by activists to push corporate simplification shows no sign of slowing. "We see no slowing of that trend and expect it to continue," Feldgoise said.
Some speakers warned that the current volatility could also increase hostile takeovers. Barshay cited the competition between Netflix and Paramount Skydance to win Warner Bros Discovery as an example of the type of contested deals that may become more common when market turbulence makes it harder to negotiate friendly transactions. "Volatility makes it tougher to get friendly deals done," he said, noting that buyers and sellers often disagree on price when share prices gyrate and uncertainty is elevated. "Stability makes it easier to cut deals, and this year hostiles are likely to go up."
Panelists also reported that transactions are closing more quickly under the current administration, which has eased some concerns investors and executives previously had about timing and regulatory scrutiny during the prior administration.
At the same time, artificial intelligence is already prompting some companies to pause or reassess deals. Barshay compared AI’s impact to the introduction of the internet, saying the technology represents a similarly large shift. He added that some clients are temporarily stepping back from mergers while they evaluate how AI will change buyer and seller perspectives on transactions.
The conference sessions underscored a central theme: the dollar volume of M&A is being driven upward by larger individual transactions even as geopolitical risks, rising oil prices, inflation worries and the strategic uncertainty posed by AI complicate decision-making for corporate leaders and investors.
Key points
- Total announced deal value has topped $1 trillion year-to-date, a 27% rise from the same point last year - a development driven by larger individual transactions.
- Activist investors continue to push companies to simplify portfolios, a trend expected to sustain M&A activity as non-core assets are spun out.
- Artificial intelligence is prompting caution among some buyers and sellers, and market volatility could lead to more hostile takeover attempts, particularly in media and other sectors.
Risks and uncertainties
- Geopolitical conflicts - including the U.S.-Israeli war on Iran - are creating sharp oil price swings and heightening inflation fears, which could affect deal economics and financing costs (impacting energy and broader markets).
- Market volatility increases disagreement on valuation between buyers and sellers, making friendly deals harder to complete and potentially increasing the incidence of hostile bids (noted as relevant to media companies and large-cap targets).
- Uncertainty about how AI will alter business models and valuations is causing some firms to pause M&A activity while they reassess strategic assumptions (affecting technology, media, and other sectors evaluating AI integration).