*

Global M&A activity up 12.6% year to date, at $984.38

billion

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US M&A volumes tumble 13%, Europe up 7%, Asia-Pacific

jumps 92%

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CoreWeave, Venture IPOs disappoint

By Echo Wang, Charlie Conchie and Anousha Sakoui

April 1 (Reuters) - A global trade war kicked off by

U.S. President Donald Trump and the ensuing market turmoil

soured bankers' predictions for a robust start to a blockbuster

year for deals on Wall Street.

First-quarter mergers and acquisitions volume rose 12.6% to

$984.38 billion from year-ago period, Dealogic data compiled for

Reuters showed. This was due almost entirely to the Asia Pacific

region where three large state-run deals announced by China on

Sunday and a ports deal driven by Trump helped nearly double M&A

volume from last year.

Bankers worldwide are paring back deals and generating less

revenue. In the U.S., which accounts for almost half of global

M&A transactions, first-quarter volume slipped 13% to $436.56

billion. And while IPO activity increased, a prolonged trade war

will make it less palatable in the future, said Matt Witheiler

of Wellington Private Investments.

"Could they go public? Sure anybody can go public at any

time, if the fundamentals are good. But is it worth the brain

damage and potential price that you go public at? Probably not,"

Witheiler said.

New stock offerings rose about 4.1% to $160.22 billion, but

some recent initial public offerings have failed to impress and

the number of offerings fell 17.7% to 1,065 according to

Dealogic data.

"A lot of the deals that were announced in the first quarter

were generated last year at a time when there was increasing

exuberance with a potentially new administration in the U.S.,

with the expectation of tax cuts and deregulation," said

Cassander Verwey, JPMorgan's ( JPM ) co-head of M&A in Europe, the

Middle East and Africa.

"Given the developments over the last weeks the reality is

that exuberance has left the market and more uncertainty has

creeped in."

Wall Street executives and analysts had predicted a banner

2025, expecting Trump to slash regulations, lower taxes and

enact more pro-business policies. But U.S. stocks have fallen

sharply since his inauguration, and the hoped-for scenario looks

less likely by the day, analysts and dealmakers said.

Verwey said M&A markets need confidence and some

potential deals were abandoned because of the uncertainty.

Bankers fear a three-year slowdown in deals will drag on.

Globally, investment banking fees through Wednesday fell 4.9% to

$21.47 billion from the year-ago period, the Dealogic data

showed. The deal total for 2025 has fallen 25% to 7,629, a

20-year low. Analysts have already started trimming

first-quarter earnings forecasts for some of the biggest banks

that advise on M&A deals.

"There's probably a bit more caution if you've got

significant tariff exposure with regards to either launching a

process or frankly executing a transaction," said Jens Welter,

who heads North American investment banking coverage at Citi.

Some Wall Street banks are positioning for job cuts if M&A

activity does not rebound or at least improve in the coming

months, analysts and recruiters told Reuters.

Still, there is reason for optimism.

Google's $32 billion acquisition of cloud security company

Wiz, the quarter's biggest, came together largely because of

Trump. The deal was sidelined last year over fears it would not

survive the Biden administration's antitrust scrutiny, but those

close to the deal believed the odds of approval would improve

under Trump, Reuters reported.

"There is still a great deal of liquidity in the market

between both sponsors and strategics, as well as a desire to put

cash to work. There is also pent-up demand from a few slower

years of M&A," said Ivan Farman, co-head of global M&A at Bank

of America ( BAC ).

"We were a little more cautious before March but after the

activity we've seen in the last few weeks we're more

optimistic."

A burst of megadeals in March and hot Asia Pacific IPO

activity saved the industry from a moribund quarter. Deal volume

in Asia surged 92% to $264.46 billion from the year-ago period,

thanks in a large part to the state-run deals in China and Hong

Kong-based CK Hutchison's $19.2 billion sale of ports, including

those near the Panama Canal, to a BlackRock ( BLK )-led group of

investors.

That deal, however, appeared less solid after reports

surfaced on Friday that it will not get signed as planned this

week, due to pressure from Beijing. The three acquisitions

announced by China's Ministry of Finance on Sunday also

accounted for more than $55 billion, combined.

Big European deals helped boost activity 7% from a year

earlier to $190.18 billion, including Mediobanca's $13.8 billion

bid for Banca Monte dei Paschi di Siena. The deal total for

Europe, however, fell 32% from a year earlier to 2,647.

Stalled deals activity led Jefferies on

Wednesday to miss first-quarter earnings estimates. The

investment bank's revenue from equity underwriting declined 39%,

foreshadowing what may be in store when larger rivals Morgan

Stanley ( MS ), Goldman and JPMorgan Chase ( JPM ), report

results next month.

Last year's "momentum has been slowed by the uncertainty

that has arisen as a result of the policy statements and actions

of the government and geopolitical events," Jefferies President

Brian Friedman said in an interview.

VOLATILITY THREAT TO IPOS

Since Trump's January 20 inauguration, the S&P 500 is

down more than 6% and the tech-heavy Nasdaq 100 has fallen more

than 10% through Monday's close, LSEG data showed. This dampened

optimism for 2025 IPOs after many companies waited for years to

go public.

"Issuers and investors would both like certainty," said

Keith Canton, JPMorgan's ( JPM ) head of Americas equity capital

markets. "Then they can understand how business models will be

impacted and then they can start to price equity appropriately."

Two major IPOs, by liquefied natural gas exporter Venture

Global and artificial intelligence startup CoreWeave, largely

drove volumes in the quarter, but their performance has been

disappointing.

Venture Global shares have tumbled nearly 60% since it went

public, erasing about $33 billion in value. CoreWeave's highly

anticipated debut on Friday also fell short of expectations,

with the stock falling more than 7% below its IPO price. This

sent a chill through the IPO pipeline and raised concerns about

weakening sentiment toward AI infrastructure.

"If you put the combination of tariffs and overall economic

uncertainty together, it makes it harder as a management team to

have real comfort in the trajectory of your own business and

your ability to perform in those critical first few quarters

post-IPO," said Robert Stowe, head of Americas equity capital

markets at Barclays.

Some European companies have delayed IPO plans. German

pharmaceutical company Stada postponed going public in Frankfurt

last week because of market volatility. German bank OLB, another

IPO candidate, opted instead to sell itself this month to French

banking group Credit Mutuel Alliance Federale.

"There have been some big and successful deals that have

happened in the last 12 months," said Martin Thorneycroft,

global co-head of equity capital markets at Morgan Stanley ( MS ).

"They're still relatively few and far between, and I

think there are quite a few issuers who would want to see a bit

more proof in the pudding."