With financial markets reeling in response to the sweeping tariffs announced by US President Donald Trump, M&A partners are braced for yet another sustained period of upheaval – while also focusing on the positives.
‘Even though nobody knew precisely what was going to happen, and even though there was a known unknown, the fact that we have some specificity has now removed that known unknown,’ said White & Case UK public M&A practice head Patrick Sarch.’
‘There’s at least a benchmark. There wasn’t one before the tariffs were announced.’
The administration imposed a tariff of 10% on all imports to the US from the UK – the minimum rate imposed on any country, compared to 20% on goods from the European Union and 34% on goods from China, which, when combined with an earlier 20% levy, add up to a total of 54%.
The reaction to the tariffs has been pronounced, with worldwide stocks tumbling and the S&P 500 ending last week down more than 9% – its worst week since the height of the Covid pandemic in March 2020.
While Trump’s unprecedented intervention will provoke yet more uncertainty in transactional markets, in the run-up to the US election there had been widespread hopes that 2025 would see an M&A revival, and according to LSEG data, the first quarter of the year had been a strong one for M&A, with global activity up by 15% year-on-year – the strongest Q1 since 2022.
LSEG’s global principal advisor rankings show strong performance from US powerhouses, with Kirkland & Ellis in first place by total deal value, advising on 153 deals with a combined value of $103bn.
By far the best performing UK-headquartered firm was Freshfields, which placed second after acting on 33 deals with a total value of almost $101bn. The only other magic circle firm to feature in the top 25 global principal advisors was Clifford Chance, in 22nd place with 34 deals worth $22.2bn.
The top five was rounded out by Davis Polk in third, Latham & Watkins in fourth and Cravath in fifth place. Wachtell fell from first place last year to ninth, with Skadden down from second to twelfth.
Global principal advisors announced (by deal value)
| Firm | Rank (last year) | Total deal value | Number of deals |
|---|---|---|---|
| Kirkland & Ellis | 1 (5) | $103.1bn | 153 |
| Freshfields | 2 (10) | $100.9bn | 33 |
| Davis Polk | 3 (14) | $77.7bn | 40 |
| Latham & Watkins | 4 (4) | $67.7bn | 132 |
| Cravath | 5 (47) | $57.5bn | 15 |
Global principal advisors announced (by number of deals)
| Firm | Rank (last year) | Total deal value | Number of deals |
|---|---|---|---|
| Goodwin | 1 (3) | $17.3bn | 171 |
| Kirkland & Ellis | 2 (4) | $103.1bn | 153 |
| Latham & Watkins | 3 (5) | $67.7bn | 132 |
| Cooley | 4 (2) | $24.4bn | 102 |
| Holland & Knight | 5 (9) | $1.65bn | 91 |
‘People last year were predicting a big uptick in 2025’, said Freshfields global M&A practice co-head Andrew Hutchings (pictured top). ‘It was always my view that it would be more of a steady march back.’
In the wake of the tariffs, he continued: ‘There will inevitably be a period of relative caution as people wait to see the impact, as well as what any responses will be.’
Despite this, M&A partners argue that deal markets will remain resilient. ‘Across my career there have been a number of dislocating events’, said Hutchings. ‘Whether it was the global financial crisis, Brexit, the pandemic – in each case, the markets tend to reorganise themselves.’
Some also argue that, as crises become more frequent, M&A markets are less inclined to wait for a stability that may never come – uncertainty has become, in one partner’s words, ‘a new normal’.
In this environment, thought turns to opportunities. In particular, said Sarch, ‘investors with risk appetite can do very well’.
He continued: ‘We’re talking to clients who might want a foot in the door in the US or the EU, or for whom the UK might be interesting as almost an offshore jurisdiction outside the EU trading bloc and, hopefully, with a reasonable trade deal with the US.’
Sarch also pointed to a need ‘to reconfigure supply chains, especially in strategic national security-relevant areas’ as a driver of M&A.
For Hutchings, too, ‘If a company needs to reorganise the way in which its supply chain works or where it’s conducting its manufacturing, that can drive a level of activity.’
Geopolitical changes may also see shifts in the global M&A balance. According to LSEG data, US target M&A was down to 43% of total dealmaking in Q1 – a five-year low. Europe and Asia Pacific, by contrast, were each at three-year highs, up 12% and 59% respectively.
Freshfields also performed well in the European deal rankings, claiming the top spot with 31 deals worth a total of $67.4bn. White & Case was in second place, with Kirkland, Sullivan & Cromwell, and Latham rounding out the top five.
Among UK headquartered firms, Clifford Chance ranked tenth, with A&O Shearman in 13th, and Linklaters in 21st.
Any European involvement announced (by deal value)
| Firm | Rank 2025 | Total deal value | Number of deals |
|---|---|---|---|
| Freshfields | 1 (6) | $67.4bn | 31 |
| White & Case | 2 (3) | $49.6bn | 49 |
| Kirkland & Ellis | 3 (25) | $44.7bn | 29 |
| Sullivan & Cromwell | 4 (8) | $43.4bn | 12 |
| Latham & Watkins | 5 (10) | $43bn | 46 |
The same geopolitical factors mean defence will likely be a centre of activity, while financial services – the joint first most active sector in Q1 alongside technology, with 19% of total M&A each – will likely remain hot, as flows of capital, unlike flows of goods, are not subject to tariffs.
‘Many people thought things would settle down towards the end of last year, with the elections out of the way and interest rates coming down’, said Hutchings. ‘That thinking is now destabilised. But businesses can’t afford to stand still. Maybe there are more risk factors, maybe execution is more complex. But it won’t mean that people won’t do transactions.’
