• Echoes of pre-GFC overreach in megadeal rush
• Private credit, tech loan jitters threaten growth engine
• Inflation embedded in more fractured political reality

In April 2007, an RBS-led consortium unveiled a EUR 72bn proposal to buy Dutch banking giant ABN Amro. By August, the US subprime mortgage crisis had precipitated a credit crunch that would, in turn, bring down Lehman Brothers the following year.

RBS fell into UK government ownership; the global economy was plunged into recession.

The ABN Amro deal quickly became a byword for M&A overreach in the heady days prior to the global financial crisis.

Conceived in a world marked not only by the scars of that era but also fresh flesh wounds inflicted by sustained geopolitical instability, might we look at the pending USD 110bn takeover of Warner Bros Discovery by Paramount Skydance or the colossal capital raises of AI giants like Anthropic and OpenAI in the same light some 20 years hence?

It can at times feel like we’re truly through the looking glass.

No-one seriously doubts the peril of the current situation. Iran continues to exert a chokehold over the Strait of Hormuz and the global economy. Brent crude at USD 110/bbl is up more than 50% this month and 83% this year. Interest rates that had been tracking down in the US and UK are holding fast and central banks could yet tack higher.

Worse, sovereign yields – including supposedly safe-haven US Treasuries – have climbed markedly, exacerbating fiscal pressures in key economies both sides of the Atlantic.

From the Greenland episode through to AI-related capital rotation and now war in the Middle East, M&A has nonetheless continued its stellar run from 2H25.

Only in 2021 – the global record year for dealmaking – have we seen a stronger first quarter haul. So far in 2026, some USD 1.27tn in M&A activity is recorded in Mergermarket data, up more than 23% year-on-year.

Such sangfroid can seem maddeningly at odds with the scale of challenges and risks facing the global economy. Yet dealmakers are remarkably consistent about their approach in the face of wild uncertainty, especially that generated from the White House by President Donald Trump.

“No-one knows how to price Trump,” one crossborder-focused antitrust partner said. “But there’s more ambition for difficult deals as the US has given up enforcement – the UK too for big deals.”

As this column has argued before, engineering a flight to scale to safeguard market access and vertically integrate supply chains is a rational response to a more uncertain world.

If Trump’s love of deals and disdain for regulation complements European authorities’ fears over attracting investment capital and desire to build continental champions, previously unthinkable tie-ups fall into the realm of the possible. Rushing to execute them makes compelling sense.

Mining giants Rio Tinto and Glencore may have tripped up in their latest attempt to secure a megadeal that would have created the preeminent global giant in copper. But the logic above tempted both sides to engage – and who would rule out a revival attempt later in the year as copper’s role in electrification only becomes more pertinent amid an energy crisis?

Indeed, energy is the key to whether AI hyperscalers deliver on their capex plans driving much of the US’s GDP growth. If they do, and their models are as effective in driving public and private sector productivity as boosters hope, this would be a significant offset to increased geopolitical volatility.

Yet even the key players seem unsure of themselves on this score.

“I am sort of hoping for a miracle in terms of figuring out how we can get way more efficient per watt with models to give us time to build out all this infrastructure,” OpenAI CEO Sam Altman told BlackRock’s Infrastructure Summit earlier this month.

“In the long term I am optimistic. I have no doubt we will figure out how to build huge amounts of power generation,” Altman also said.

Build-out and operational progress require a short-term miracle and long-term optimism. Got it.

In the meantime, the shadow of AI’s potential continues to hang over the broader technology and software space.

Just 7% of North American tech loans were trading above par in the secondary market as of 26 March, according to Markit data compiled by Debtwire.

Ironically, loan prices trend downward both on negative news about hyperscaler valuations and doom mongering about the impact of successful AI rollout: dips occurred not only amid AI bubble fears in October-November 2025, but also following the “SaaSpocalypse” unleashed by Anthropic releasing a series of Claude Cowork plugins in January 2026.

The fallout from this has been a shakedown in private credit. In the last week, it emerged that Ares and Apollo had each seen exit requests from semi-liquid private credit-related vehicles enter double-digit territory, even though redemptions are capped at 5% per quarter.

Gating redemptions has thus far proven effective at stopping what would otherwise have been a run – and maybe even a liquidity squeeze.

As Continental Drift has argued in the past, a private credit storm would be painful but not systemically damaging by itself. As an asset class, private credit globally stood at USD 3.5tn, according to an Alternative Credit Council report published in December, with survey respondents reporting fund-level leverage at a sober 32% of AuM.

But this brings us full circle. One of the reasons why markets have been volatile only within a modest band is that financing spreads have remained compressed. The glut of capital chasing private credit opportunities has brought substantial competition into high yield issuance, and investment grade paper is also very easy to print.

If capital begins to doubt these returns, spreads may normalise, fulfilling the risk indicator role they are meant to play – and this would be happening just as an inflation shock hits the global economy.

The rationale for pursuing transformational deals remains strong.

Even if geopolitical instability is an illness afflicting the potential of the global economy, there’s money to be made providing medicine: in the form of energy security, resource resilience, and defence. There’s even the hope technological advances will provide a metaphorical cure.

But it is tough to reconcile the exuberance of dealmakers with a cold assessment that the world has become a more expensive and more dangerous place.

In that context, it’s not a case of whether there will be another ABN Amro, but when.