Global M&A stays strong in 2026 despite tightest capital squeeze in 30 years

The global M&A boom that defined 2025 will continue into 2026, as companies reevaluate their investment portfolios and AI-driven demand fuels large-scale transactions. However, the tightening capital pool is forcing executives to be more selective than ever.

Despite a slow start as Trump’s sweeping tariffs early last year briefly dampened acquisitions and new public listings, the total value of dealmaking activity rose 40% to $4.9 trillion in 2025, according to Bain & Company’s annual M&A report.

This represents the second highest level on record, after the peak of $5.6 trillion only in 2021, when low borrowing costs and buoyant stock markets led to a historic deal-making frenzy.

Dealmaking activity picked up last year as central banks cut interest rates, valuations improved and companies increased spending on artificial intelligence.

Markets are betting that the rally will continue, as Wall Street regains its appetite for large deals on the prospect of lower borrowing costs.

A Bain study of 300 mergers and acquisitions executives found that 80% expect deal activity to be maintained or increased this year, citing improving macroeconomic conditions and a growing backlog of private equity and venture capital assets waiting to exit.

Goldman Sachs, based on its own survey of 600 corporate clients and financial sponsors, found that 57% believe size and strategic growth will be the main drivers of deal decisions this year.

“As sudden shifts in trade policy turn into a pattern of less threatening change, relief turns into confidence and then fear of missing out,” said Jake Henry, global leader of McKinsey’s M&A practice.

Central to this shift is a decisive push by companies to reevaluate their investment portfolios, as geopolitical risks, economic fragmentation and uneven global growth force boards to reconsider where they operate and what risks they are willing to take.

“Leaders across industries recognize that many traditional business models have reached the limits of their historical growth drivers,” said Susan Kumar, executive vice president of Bain’s global mergers, acquisitions and divestitures practice.

“Businesses urgently need to reinvent themselves to navigate the major forces of technological disruption, a post-globalized economy, and changing profit pools,” Kumar added.

Goldman Topped the global rankings for mergers and acquisitions Last year, it advised on nearly 40 deals worth a total of $1.48 trillion. This was the strongest period for mega deals in terms of volume, according to ReutersCiting LSEG records dating back to 1980.

However, companies remain cautious. Boston Consulting Group’s Mergers and Acquisitions Sentiment Index has rebounded to 75 from its low in late 2022 — but remains well below the long-term average of 100, reflecting an “improving but cautious stance.” A higher value than the previous month indicates acceleration in M&A market momentum, while a lower value indicates deceleration.

Private equity now accounts for nearly 40% of global M&A activity, according to Goldman Sachs. Although Signs of stress In the private credit market — now valued at $2.1 trillion — Goldman Sachs expects the asset class to double by 2030, expanding the pool of capital available to finance large transactions.

Exceeding the number of transactions Threshold of $10 billion Inflation rose to 60 last year, the highest level since 2021, McKinsey’s Henry said.

“We expect more big deals in 2026, with continued consolidation and geographic expansion,” Henry said, with AI-related service providers fueling “big deal fever” this year.

However, large capital spending in AI could hamper M&A activity in the near term, said Brian Levy, global dealmaking leader at PwC.

As AI adoption accelerates, demand for computing power across digital infrastructure, energy, semiconductors, and hardware optimization has soared. In response, many companies are choosing to acquire rather than build across the technology stack.

Between the first quarter of 2024 and the third quarter of last year, capital expenditures for heavily expanding U.S. companies averaged $760 million per day, according to Goldman Sachs.

The Wall Street bank estimates that by 2030, another 65 gigawatts of data center capacity will come online — more than doubling the amount added from 2019 to 2024.

“Investment in AI is being directed toward data centers, energy and other infrastructure as well as technology development and customization,” Levy said.

“In the near term, the multi-trillion dollar size of this investment may divert capital and reduce M&A activity.”