UK dealmaking was defined by a “volume down, value up” dynamic during the first quarter of the year, with deal volumes down 30 per cent year-on-year, while aggregate disclosed value increased by 36 per cent.
The latest report from Experian MarketIQ suggested that the divergence between volume and value shows a market in which deals are typically larger, indicating that well-capitalised, strategic buyers are beginning to shape activity. This was further backed up by a 29 per cent increase in mega deals.
According to Experian MarketIQ, the UK continues to see a more cautious approach to deal execution, with more extensive buy-side due diligence resulting in longer periods between transaction announcement and completion.
While value was driven by larger deals at the upper end of the market - such as the £9.9 billion offer for Schroders by Nuveen Asset Management - Experian MarketIQ reported that the UK’s core SME segment continued to drive a significant share of deal volume.
According to the report, the majority of activity continued to be concentrated in the sub-£10 million range, underlining the ongoing resilience of smaller transactions.
In terms of specific industries, the UK’s Technology, Media & Telecoms (TMT) sector was the leading contributor to Q1 activity. While TMT volumes declined from 314 in Q1 2025 to 194 this year, aggregate deal value increased 36 per cent, from £4.7 billion to £6.3 billion.
Mirroring the broader trend across the UK, this was supported by a number of large transactions, including Nscale’s £1.5 billion capital raise and Wayve’s £887 million Series D round.
Similarly, the professional and scientific services sector saw a significant year-on-year increase in value (from £6.7 billion to £7.7 billion), despite deal volumes falling by 25 per cent.
The financial services sector, meanwhile, saw aggregate deal value soar from slightly over £7 billion in Q1 2025 to £23.8 billion in Q1 2026, following the announcement of three major transactions.
From a funding perspective, cash continued to be the dominant source of funding by value, while bank debt made up a larger share of total value than in 2025. According to Experian MarketIQ, this indicates that available capital is increasingly being deployed into fewer, higher value deals.
The report stated that M&A activity in the first quarter was “characterised by a broad and diversified investor base, underscoring continued depth across the UK funding landscape.”
The bulk of dealmaking was underpinned by domestic activity, while the US and Ireland emerged as the most active areas for outbound investment by UK buyers. The UK also continued to see strong inbound M&A interest, particularly from US buyers, with Sweden, Ireland and Germany also establishing themselves as significant sources of inbound investment.
The report acknowledged that reporting lags may mean that Q1 deal volumes are currently understated and that a clearer picture would emerge later in the year, with activity expected to improve.
Experian MarketIQ added that heightened geopolitical uncertainty, especially in the Middle East, may impact momentum as 2026 progresses, but asserted that sustained strategic demand and capital availability should support a gradual recovery.
Summing up the trends to have emerged from Q1 2026, Jane Turner, Research Manager, Experian MarketIQ, said: "The opening quarter of the year reinforced the well-established “volume down, value up” dynamic in UK M&A activity.”
“While overall deal volumes declined, transactions that progressed to completion were typically larger in scale, signalling the return of well-capitalised strategic and financial buyers deploying capital selectively.”
“More extensive due diligence processes have contributed to longer timelines between announcement and completion, reflecting a more cautious and disciplined approach to execution. Despite this, the UK’s core SME segment continued to underpin overall market activity, with domestic transactions accounting for the majority of deals.”
“Internationally, the UK remained an attractive destination for inbound investment, particularly from US buyers. Although wider uncertainty may moderate momentum as the year progresses, strong capital availability and sustained strategic demand continue to support confidence in a gradual recovery in dealmaking activity.”
Check out some of our recent insights covering major UK M&A trends:
Buying a UK business from overseas: the key questions for international buyers
M&A Report: Technology, Media & Telecommunications (TMT)
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