Interview, Fireside Chat
What’s Driving the Surge in Deal-Making?
- M&A market activity is projected to sustain its current intensity through 2026, potentially reaching or exceeding all-time highs if capital availability, strategic repositioning, and regulatory execution remain stable.
- Current-year performance has rivaled the 2021 peak, with the number of $10 billion transactions rising 100% compared to 2024, while new mandates and deal checks for the latter half of 2025 are expected to match or exceed 2025 levels.
- Strategic drivers include board and CEO re-engagement with dormant transactions to address long-term (20-30 year) business repositioning challenges and the pursuit of scale to ensure agility amid AI evolution.
- Significant activity is anticipated in AI generation and related sectors as the technology remains in its early innings, despite the difficulties boards face in assessing M&A opportunities with limited expertise.
- Credit markets for private and public financing are forecast to remain relatively accessible during the second half of 2025, though less open than in 2021, while private capital pools are expected to continue fostering M&A and creative corporate structures.
- Market trends include the continued trajectory of business simplification to address conglomerate discounts, pervasive shareholder activism regarding portfolio separations, and private equity entering the second or third inning of recovery regarding portfolio monetization.
- The percentage of new large transactions remains nascent relative to prior years, indicating that many deals across specific industries, companies, and geographies are yet to be realized.
- Risks to the 2026 outlook include potential derailment by geopolitical instability, credit market tightening, and idiosyncratic corporate credit issues within the financial services or industrial sectors.
- The overall 2026 sentiment is characterized as reasonably but cautiously bullish, balancing fundamental driving forces against idiosyncratic risks that could slow activity.
- Forward-looking statements indicate that past performance is not indicative of future results.