Key M&A Trends Shaping the U.S. Market Outlook for 2026

The global mergers and acquisitions (M&A) market has shown strong recovery and optimism heading into 2026, driven by resilient dealmaking despite early 2025 turbulence such as tariff volatility and geopolitical tensions. Buyers have demonstrated an ability to navigate uncertainties, supported by lower financing costs and positive growth expectations. This adaptability is vital as regulatory complexities and geopolitical risks persist, emphasizing the importance of proactive integration planning during due diligence to secure sustainable growth. The middle to large segment of M&A deals has seen notable activity, including a surge in megadeals over $10 billion, reflecting renewed confidence. A strategic shift towards de-conglomeration is expected in 2026, with companies focusing on 'buy and build' strategies to optimize portfolios through smaller, complementary acquisitions that bolster core competencies. Sectors such as energy, defense, biopharma, and technology remain attractive, while easing tariff disruptions may benefit consumer-focused businesses. North America has experienced the most significant turnaround, with improved M&A performance after a prolonged downturn. Factors such as robust GDP growth and expectations of Federal Reserve interest rate cuts are facilitating better financing conditions and increased strategic transactions. This momentum is anticipated to continue despite remaining policy uncertainties and market volatility. Private equity-backed deals are projected to increase substantially in 2026, supported by over $2 trillion in undeployed capital and more accessible debt markets. Continuation funds are transitioning from niche to mainstream use, allowing private equity firms to extend investment horizons and offer liquidity to current investors while attracting new capital. Artificial intelligence is playing an increasingly pivotal role in M&A processes by enhancing target identification, due diligence, and integration efforts. However, the adoption of AI introduces new challenges in governance and reliance on human judgment, requiring careful management to unlock its full value in dealmaking. Overall, the M&A outlook for 2026 is optimistic, with a focus on scaling strategically amidst ongoing volatility and extended planning cycles.