M&A activity faces fresh headwinds as the US-Iran conflict disrupts dealmaking momentum. Operation Epic Fury in Iran has stretched timetables and intensified due diligence, with bankers warning that prolonged conflict could stall transactions. The geopolitical uncertainty comes as the M&A market was already showing signs of slowing, with global deal numbers down over 13% from last year.

Historical data shows M&A activity typically declines in the six months following major conflicts, with the steepest drop of more than 20% occurring after the September 11 attacks. The current situation echoes early 2025 when hopes for a record M&A year collided with market turbulence and tariffs. Private equity firms and investment banks are now navigating a "proceed with caution" environment as energy prices and supply chain disruptions loom.

Despite the challenges, dealmakers note that key conditions for large-scale transactions remain intact, including access to investment-grade financing and strong stock markets. Recent mega-deals like Devon Energy's $21.4 billion purchase of Coterra Energy and the $10.7 billion AES Corp. takeover demonstrate that activity continues, albeit at a slower pace. Industry executives suggest that while the current volatility has made companies hesitant, the fundamental drivers for M&A remain in place.