M&A 2026 Trends: What’s Changing and Why It Matters

Mergers and acquisitions (M&A) are the go-to strategy for rapidly transforming a business. While 2025 provided a necessary rebound in deal value after years of uncertainty, the M&A trends for 2026 suggest that we are entering a new phase experts call recalibration.

This guide explains the strategic, financial, and regulatory factors shaping the market this year. It is designed to help corporate leaders, private equity partners, and legal advisors plan their next move. 

Introduction to M&A in 2026

The mergers and acquisitions (M&A) landscape in 2026 is set for a dynamic period of growth, as both strategic and financial buyers look to seize new opportunities in an evolving market. With pent-up demand from previous years and renewed confidence among investors, deal activity is expected to surge, driven by a focus on achieving scale and securing a competitive advantage.. 

Private equity buyers and sovereign wealth funds are emerging as particularly active participants, deploying private capital to acquire assets that align with key trends such as artificial intelligence and digital transformation. 

As the current environment continues to shift, companies are sharpening their focus on strategic acquisitions that deliver immediate value and position them for future growth. Understanding these trends and the forces behind them is essential for anyone looking to navigate the M&A market in 2026, as the rise of private capital, the influence of financial buyers, and the impact of technology reshape the landscape.

Continued growth but measured momentum

When we look at the forecasts, we see a market that is stabilizing rather than sprinting. Following the recovery of late 2025, EY-Parthenon projects that corporate deal volume will grow by about 3% this year. While this pace is more modest than the surge we saw last year, it actually signals a healthier environment for buyers.

Even though deal volume is growing slowly, deal value remains high. This confirms that organizations are still willing to pay a premium for assets that offer immediate strategic value.

Within these numbers, we see two different stories playing out:

• Private equity picks up speed

Sponsors are expected to lead the market with a 5% increase in volume. This activity happens because firms need to return capital to investors, and the gap between what sellers want and what buyers will pay is finally closing.

• Corporations stay selective

Strategic buyers remain active, but they focus more on transformational deals that secure essential capabilities instead of pursuing broad market expansion.

Compared to the past decade, current trends show a more measured approach to deal-making, with market stabilization reflecting lessons learned from previous cycles. Financial conditions, including interest rates and overall economic stability, are also playing a significant role in influencing deal volume and shaping M&A strategies in 2026.  

Closing the valuation gap for the capital markets

One of the biggest hurdles in recent years was the valuation gap. Simply put, it’s the difference between what sellers thought their company was worth and what buyers were willing to pay. In 2026, that gap is finally closing.

Sellers have adjusted their expectations to the reality of current multiples. They understand that the easy growth of 2021 is not coming back. On the flip side, buyers are finding financing more accessible. 

While interest rates have not returned to near-zero, the credit markets have stabilized.

• Private credit continues to dominate. Private credit has become a mainstream source of deal financing, especially for middle‑market and large‑cap LBOs. For deal teams, this usually means working with a smaller group of lenders but accepting stricter, tailored covenants. 
• The proliferation of earn-outs. To close the remaining valuation gap, more 2026 agreements will include performance‑based earn‑outs. These give buyers downside protection while still offering sellers a path to their target price if the business hits agreed milestones.
• Equity rollovers. In many transactions, sellers also keep a 10–20% equity stake in the new entity. This rollover equity creates a “second bite of the apple” and helps keep founders and key leaders engaged through the first, and often most difficult, phase of integration.

Popular data rooms for M&A

Overall rating:

The score is calculated as an average, derived from evaluations and the number of reviews on external review platforms.

4.9/5

Excellent

Check price

Overall rating:

The score is calculated as an average, derived from evaluations and the number of reviews on external review platforms.

4.8/5

Excellent

View Profile

Overall rating:

The score is calculated as an average, derived from evaluations and the number of reviews on external review platforms.

4.7/5

Excellent

View Profile

Sector‑led trends for 2026

While macro data suggests how much activity to expect, industry patterns indicate where capital flows.  In 2026, four specific sectors are driving the majority of deal flow.

The AI infrastructure build-out in technology

KPMG research shows that 77% of market players now view technological transformation as a primary deal driver.

Artificial intelligence became a necessity for business leaders. In 2024 and 2025, we saw a wave of hype, but in 2026, the story is infrastructure build-out. 

Companies are acquiring digital capabilities to integrate directly into their existing workflows. Consequently, we see a marked increase in acquisitions of data centers and specialized software firms because enterprises must secure the infrastructure required for heavy AI workloads.

• Hardware over software. While SaaS (software as a service) remains important, the massive demand for compute power has shifted capital toward hardware and physical infrastructure. Deals for data center operators, chip manufacturers, and cooling technology firms are commanding high multiples.
• The acqui-hire return. Tech giants are once again buying smaller AI startups not just for their IP, but for their engineering talent. However, regulators monitor these deals closely to prevent the monopolization of talent.

The race for scale and innovation in healthcare

In healthcare, the story is different: the patent cliff and the need for scale are the core reasons for consolidation.

• Big pharma vs. the patent cliff. Several top pharmaceutical brands lose patent protection between now and 2028. To replace this lost revenue, they are aggressively acquiring biotech firms with Phase II or Phase III assets. They are willing to pay significant premiums for de-risked assets that can be commercialized quickly.
• Provider consolidation. On the services side, we see continued roll-up activity. Firms in private markets are executing strategies in fragmented sectors like behavioral health, veterinary services, and specialized outpatient clinics. The goal is to build regional density that provides leverage in negotiations with payers (i.e., insurance companies).

Security and supply chains in the energy sector

The energy sector focuses now on supply chain security and the energy transition.

• Critical minerals. You cannot build electric vehicles or batteries without lithium, cobalt, and copper. Mining M&A is surging as automotive and energy companies compete to secure direct ownership of these resources.
• Grid modernization. As AI data centers and EV fleets increase electricity demand, the US power grid is coming under pressure. We are seeing utility companies and infrastructure funds acquiring firms that specialize in grid resilience, battery storage, and smart metering.

The middle market: the buy-and-build strategy

While megadeals capture the headlines, the middle market (deals valued between $50 million and $500 million) is where the real volume occurs.

Buyers increasingly prefer smaller, strategically aligned transactions because these deals offer lower integration risk. This buy-and-build approach allows companies to grow sustainably even when the cost of capital remains elevated. 

• By acquiring a platform company and then adding on smaller bolt-on acquisitions, PE firms can average down their purchase price and create significant value through operational synergies.

The new playbook for due diligence

As deals get bigger and more complex, due diligence has to go deeper. Checking tax records and lease agreements is no longer enough.

• Cyber due diligence. When you buy a company, you also buy its security issues. In 2026, a cyber quality of earnings review is becoming almost as common as a financial one. If the target has old, unpatched systems or a history of data breaches, the deal price should reflect the cost of fixing those problems.
• ESG as a risk factor. Regardless of personal views on ESG, regulators in Europe and California take it seriously. If a U.S. company plans to sell a business to a European buyer, that business needs reliable carbon and sustainability data. 
• AI governance checks. If a company’s value is tied to its AI, you must test how solid that claim is. Deal teams now check whether the company legally owns the data used to train its models. If they trained AI on scraped or unlicensed data, future lawsuits could destroy much of the deal’s value.

Global cross‑border and regional dynamics

The global political situation in 2026 is complicated, and it directly changes cross‑border deals. Regulatory policy and geopolitical tensions are expected to continue influencing M&A activity in 2026. As the world breaks into separate economic blocs, M&A activity is starting to mirror these divisions.

In the context of global capital flows, the IPO market saw a notable resurgence in the second half of 2025, and this momentum is expected to shape its outlook for 2026.

The friend-shoring effect

US buyers look to friendly nations for supply chain acquisitions. We see a rise in deal activity between US companies and targets in Mexico, Canada, and parts of Southeast Asia (excluding China). 

This is driven by the need to bring manufacturing closer to home (near-shoring) to avoid the logistics disruptions we saw earlier in the decade.

Europe’s distressed opportunities

The European market faces different challenges, including slow growth and high energy costs. For US buyers using dollars, many European companies now look relatively inexpensive. 

As a result, US private equity firms are likely to target strong industrial and technology businesses in Germany and the UK that are trading below their real value because of local economic conditions. 

The China disconnect

Cross-border activity between the US and China has cooled significantly. Regulatory bodies in both nations have made it difficult to close deals involving technology or sensitive data. 

For 2026, most multinationals are focusing on divesting their Chinese assets rather than acquiring new ones, aiming to decouple their supply chains from geopolitical risk.

Regulatory and strategic market forces

Finding the right target is only half the battle. Deal planning also has to account for a tougher regulatory environment.

U.S. national security is still a top priority in deal reviews. The Committee on Foreign Investment in the United States (CFIUS) closely examines deals involving critical technologies, sensitive personal data, or key infrastructure, under an expanded mandate set out in FIRRMA and related rules.

Antitrust reviews are changing as well. Regulators now look not only at market share, but also at the company’s overall ecosystem power. As a result, deal teams are often asked to plan divestitures early. In practice, when buying a competitor, you may need to identify a buyer for overlapping business units before announcing the transaction.

Key 2026 M&A trends at a glance

The following table summarizes the primary directional shifts expected in the M&A market this year, based on data from leading industry forecasts.

Virtual data rooms and 2026 M&A execution

Because transactions are becoming more complex and data-heavy, the tools used to manage them must evolve. In 2026, virtual data rooms will be essential for controlling the diligence process.

Modern VDRs offer key advantages that make M&A execution more efficient, secure, and insight‑driven, including:

• Granular security and remote shredding. Data leakage is a primary risk during auctions. VDRs allow you to manage exactly who views or edits documents. Advanced remote shredding tools let you revoke access to downloaded files even after a bidder leaves the process.
• AI-powered diligence and auto-redaction. AI tools within the VDR now auto-categorize thousands of files instantly. Automated redaction hides sensitive data, such as Social Security numbers or patient records, across the entire database in minutes. 
• Real-time analytics and bidder behavior. VDRs give the sell-side clear heatmaps of bidder activity, helping deal teams see which documents attract the most attention and anticipate areas of concern. 
• Audit readiness and governance. Regulators and boards require a defensible record of every transaction. A VDR automatically creates a comprehensive audit trail, so that if a regulator later questions whether certain liabilities were properly disclosed.
• Clean room capability for integration. VDRs provide a secure environment for competitors to share data before a deal closes. This allows a third-party team to plan for day one readiness without violating antitrust laws because only anonymized results are shared.

Conclusion

Planning M&A for 2026 requires patience and focus. Deal activity is steady, but buyers and sellers take more time to agree on price, structure, and risk. This slower pace reflects caution shaped by recent market swings and several years of uneven conditions.

Where deals do happen, they tend to solve clear business needs. Technology, healthcare, and energy-related assets continue to draw interest because they make day-to-day business sense. 

Other than that, regulation now influences deals earlier in the process. Antitrust review and governance requirements affect timelines and design from the start. For teams looking ahead, the takeaway is simple: preparation, sector insight, and realistic expectations matter more than speed.