Acquisitions of European companies surged in recent months, amid optimism about the region's economic prospects, but global deal-making subsided.
The total value of US deals fell sharply due to uncertainty about President Donald Trump's tax reform and deregulation agenda.
Mergers and acquisitions in Europe rose 45% year-on-year to $234 billion in the second quarter, as companies bet the region's economies will bounce back, according to Thomson Reuters data.
But global M&A dropped 12% to $771 billion, and US deal making dropped 36% to $281 billion.
"The EU recovery is happening and has made companies more attractive even if there are increased regulatory hurdles," Hernan Cristerna, global M&A co-head at JPMorgan Chase & Co, said.
In the second quarter, Italian toll road operator Atlantia SpA made a €16.3 billion offer for Spanish peer Abertis Infraestructuras, while chemicals companies Huntsman and Clariant of the US and Switzerland, respectively, agreed a $14 billion merger.
The US also saw some big deals, including US medical equipment supplier Becton Dickinson's $24 billion acquisition of peer C R Bard.
But US M&A volume, as measured by the total value of deals, was down.
The number of deals stayed almost flat year-on-year, but the average size of transactions decreased.
Analysts said that some US companies are in wait-and-see mode because they are still seeking clarity on the tax and regulatory reforms that the Trump administration has been promising. This kind of uncertainty is a major obstacle to mega-deals, the added.
Coupled with high stock market valuations, the uncertainty around US President Donald Trump's policy agenda reduced the appetite of many North American chief executives for major deals.
Regulatory risks to deals closing has been another factor weighing on deals.
The European Commission has been flexing its competition muscle, while expectations that the Trump administration will adopt a more merger-friendly stance have yet to meaningfully materialise.
Nevertheless, for some companies the adverse environment offers a window to make a bold acquisitive move with little competition.
For example, Amazon.com clinched a $13.4 billion deal for US grocer Whole Foods Market earlier this month, which has yet to trigger any rival offers.
In the Asia-Pacific region, M&A volumes were almost flat in the second quarter at around $207 billion.
Many dealmakers say global activity could increase in the second half of the year, particularly if there is more macroeconomic certainty in the US.