M&A Trends To Watch In 2026

M&A Trends To Watch In 2026

After several cautious years, dealmaking has roared back in 2026, but not evenly. Headline deal values are near record levels, while the number of deals has fallen. Capital is flowing to big, strategic transactions, and many smaller companies are still waiting for their moment.

Here are seven trends shaping the market as we approach the end of the year, and what each means for owners, buyers and advisors.

A note on the numbers: data providers count deals differently, so totals vary between sources. The figures below are rounded and attributed so you can see where each comes from.

1. Mega-Deals Drive Value While Deal Counts Fall

The defining feature of 2026 is a split market. LSEG data reported by Reuters put first-half global deal value at about $2.8 trillion, up 48% from a year earlier and the highest start to a year in its records going back to 1980. Yet the number of announced deals fell 9% to a six-year low.

Dealogic figures through July told the same story: value up 28%, count down 16%. A Bank of America M&A leader explained the logic: a $1 billion to $3 billion deal can take as much effort as a much larger one, so when a big opportunity appears, boards go for it.

What it means: If you run a small or mid-sized business, the headlines overstate how easy it is to find a buyer. BCG's September analysis noted that small-cap and mid-cap deals remain below long-term levels. Preparation and a clear story matter more than ever.

2. AI Is Reshaping Deal Strategy

Artificial intelligence has moved from buzzword to boardroom priority. In the Norton Rose Fulbright and Mergermarket survey, 78% of respondents named AI as the source of the most attractive dealmaking opportunities in 2026, up from 60% in 2025. Buyers are targeting AI infrastructure, chips, data, cybersecurity and companies that use AI heavily. Palo Alto Networks' roughly $25 billion purchase of CyberArk, reported as the largest deal in Europe, the Middle East and Africa so far this year, shows how AI-driven security threats are pushing consolidation.

AI is also changing how deals are done. Buyers use it to source targets and speed up diligence, and they increasingly judge every target on whether AI is an opportunity or a threat to its model. One theme from advisors is that AI diligence has become, in large part, talent diligence: acquirers want to know who can actually build and run these systems.

What it means: Be ready to explain how AI helps or endangers your business. Weak answers can pull down valuation, while strong ones can raise it.

3. Strategic Buyers Lead, Private Equity Is Still Finding Its Footing

Corporate acquirers are doing the heavy lifting. PitchBook's second-quarter review showed strategic buyers contributing most of the deal value while private equity activity pulled back amid higher borrowing costs. Ropes & Gray's July digest described a widening gap, with strategic value up sharply year over year and sponsor value growing far more slowly.

Private equity still holds large amounts of unspent capital and faces pressure to return money to investors. EY's mid-year analysis found announced PE exit value up 9% in the first half, and 56% of surveyed fund managers expected exits to speed up over the following six months. The long-awaited liquidity cycle is still a work in progress.

What it means: For sellers, strategic buyers with synergies may pay more than financial buyers. For PE-backed companies, expect exit timelines to remain a live issue.

4. A More Permissive, but Still Demanding, Regulatory Climate

In the United States, antitrust agencies have been more willing to accept remedies such as divestitures and less likely to block deals outright. Advisors report that this has encouraged companies to attempt transformational combinations, including mergers between direct competitors.

But the burden has changed rather than disappeared. Law firm outlooks expect continued scrutiny of big tech, media, semiconductors and AI, along with foreign investment reviews in sensitive sectors. In the Norton Rose Fulbright survey, antitrust remained the most cited regulatory obstacle, ahead of sanctions and foreign investment rules. Long outside dates and heavily negotiated regulatory covenants remain common in large deals.

What it means: Build regulatory time and risk into the deal plan from day one, and bring specialist counsel in early.

5. Private Credit Becomes Mainstream Deal Financing

Financing has been plentiful. LSEG reported record first-half investment-grade corporate debt issuance of $3.4 trillion. Alongside the traditional bond and bank markets, private credit has become a standard option for large transactions, offering speed and flexibility, though usually at higher interest cost. Some commentators have flagged underperformance at certain private credit funds, so this is an area to watch.

What it means: Buyers have more financing routes than before, which helps deals close, but lender terms and cost can still shape what a buyer can afford to pay.

6. Portfolio Simplification and Carve-Outs

Large companies are under pressure to focus. A Rothschild & Co consumer banker observed that the market is struggling to reward businesses that are highly diversified. The result is a steady flow of divestitures, spin-offs and break-ups as conglomerates sharpen their strategies, creating opportunities for buyers and private equity to acquire carve-out businesses.

What it means: Divisions of larger companies may come to market. If you are a buyer, carve-outs bring complexity, such as shared systems and transition services, so plan for the separation work.

7. Cross-Border Deals Rebound, and Structures Get Creative

Cross-border M&A reached about $893 billion in the first half, up 62% year over year and the best start since 2018, according to LSEG. Trade and tariff changes are pushing companies to rethink supply chains, and acquisitions are one way to adjust. Inbound investment into the U.S. has been especially strong, based on Ropes & Gray's tracking.

At the same time, buyers and sellers still struggle to agree on price. In the Norton Rose Fulbright survey, valuation gaps were the most commonly named barrier to completing deals. To bridge them and manage uncertainty from tariffs, AI disruption and financing, dealmakers are using earn-outs, rollover equity, minority stakes and staged acquisitions.

What it means: Sellers should understand the risks of contingent payments before accepting them, and buyers should be ready to structure creatively.

What to Do Now

• Sellers: Get your financials, customer data and AI story in order before going to market. A deal that closes well starts with preparation.
• Buyers: Move early on regulatory planning and line up financing options.
• Everyone: Expect a market that rewards quality, clarity and speed.