Iran War May Delay Deal Timelines, Not Derail M&A, McMaster Says

A war with Iran could slow the pace of deal-making but is unlikely to hurt overall M&A activity, according to Lazard Inc.’s global head of mergers and acquisitions.

“The real question about the Iran conflict is its duration; how long it will last,” Mark McMaster said, adding that investors are watching oil prices, inflation and potential supply chain disruptions. A brief conflict would likely allow deals to move forward with limited disruption, he said in an interview on Bloomberg TV on Wednesday.

Beyond geopolitical uncertainty, McMaster noted several trends favoring deal-making. Large institutional buyers remain active; deals exceeding $10 billion, up nearly 120% from this point last year, and now account for nearly 30% of the market; expects this change to continue.

At the same time, midsize companies are streamlining their portfolios, divesting from slower-growing businesses and focusing on areas where long-term growth is stronger. McMaster said. Private takeover agreements are also ongoing, especially among smaller companies that lack scale or face operational challenges.

On financing, McMaster said capital continues to be available in both public and private markets, albeit at higher costs. Companies are exploring more and more financing options in parallel to secure the best terms.

“Clients are best served running a dual track and looking at both at the same time,” he said.

Lenders are becoming more selective, placing greater emphasis on underwriting standards. “Good companies will get financed, and mediocre companies will probably have more trouble getting financing,” he added

McMaster noted persistent valuation gaps in public company deals; Buyers and sellers still cannot agree on price in volatile markets. Leverage is likely to increase volatility in sectors such as software, he said.

McMaster predicted that AI will continue to be a key driver of deal activity, particularly in infrastructure and AI-focused transactions. He said that while 2025 is “an incredible year for software M&A,” uncertainty remains around valuations, especially for private equity buyers.

“The final value is the question,” he said. “If this is private equity, how does this price relate to what we paid?”

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