2026 M&A Activity Poised for Growth Amid Rebound in Big Deals

Global mergers and acquisitions (M&A )are set to continue their upward trajectory into 2026, buoyed by renewed market confidence, rising deal values, and a "buy and build" strategy that is gaining favor among corporate buyers. New research from WTW and the M&A Research Center at Bayes Business School shows that companies engaged in dealmaking outperformed nonacquirers in share price performance during the first 9 months of 2025, setting the stage for the strongest year since the post-pandemic boom.

Several factors have contributed to the momentum, including stable interest rates, record stock market highs, and pent-up demand. Jana Mercereau, head of Europe M&A consulting at WTW, identified five trends that are likely to shape the M&A landscape in 2026.

"After a turbulent start to 2025 marked by aggressive tariff policies and geopolitical tensions, the recent M&A surge suggests a recalibration in the market. Buyers have learned to normalize and move through uncertainty, supported by lower financing costs and increased confidence in future growth prospects," Ms. Mercereau said.

However, she added that persistent regulatory and geopolitical risks will continue to challenge buyers. The pressure to scale will require earlier integration planning during due diligence to sustain long-term growth.

One notable sign of recovery is the return of megadeals. Eight transactions worth more than $10 billion closed in the third quarter of 2025—the highest since late 2018. Larger deals, typically valued over $1 billion, also saw an uptick. Ms. Mercereau said this trend is being driven by companies aiming to "de-conglomerate" and pursue focused portfolio strategies through smaller, complementary acquisitions.

"Next year, large-scale M&A will be underpinned by a drive to de-conglomerate in order to 'buy and build' in the pursuit of portfolio optimization—rather than higher risk, one-off transformative deals," she said.

This pragmatic shift is expected to favor midmarket deals, especially those targeting energy, defense, biopharma, and technology assets. Though consumer businesses remain under pressure from inflation and cost of living issues, deal pipelines are expected to improve as trade uncertainty diminishes.

The North American M&A market saw the most dramatic turnaround, following 10 consecutive quarters of underperformance. Improved gross domestic product growth and anticipated interest rate cuts from the Federal Reserve have created more favorable financing conditions, with strategic activity expected to continue into 2026.

Private equity (PE) firms are also expected to become more active, driven by over $2 trillion in dry powder, easier access to debt, and better exit opportunities. The growing use of continuation funds—vehicles that allow PE firms to transfer assets from maturing funds into new ones—will support more flexible deal structures and liquidity options for investors.

Artificial intelligence is playing an increasingly central role in dealmaking, offering tools to streamline due diligence, identify acquisition targets, and support integration. But Ms. Mercereau warned that new technologies bring fresh risks tied to governance, adoption, and the continued need for human oversight.

"The M&A outlook is optimistic, with forecasts indicating increased activity driven by larger deals focused on scale, innovation and market expansion. While volatility remains a persistent challenge and CEOs should be prepared to plan longer timelines, history shows that periods of turbulence can offer the greatest potential to create value," she said.