Deal Momentum Accelerating in 2026
After 2025 closed with the highest volume of M&A activity since 2021, we anticipate a fast start to US M&A in 2026. US M&A volumes surged +52% YoY in 2025 to ~$2.5T, with mega‑deals (>$5B) accounting for 55% of total value. Strategic acquirers and financial sponsors are capitalizing on improved macroeconomic conditions, but risks from global volatility and private credit stress remain. Explore the latest trends and forces driving dealmaking this year.
Rate Cuts and Stabilizing CEO Sentiment Encourage Boardroom Engagement
The US economy has shifted into a rate-cutting environment after the Fed lowered rates three times in late 2025. Inflation remains slightly above target, and the labor market has shown signs of softening, but improving CEO confidence suggests a measured sense of optimism. CEO sentiment recovered during the back half of 2025 from early-year lows as visibility around tariffs and regulation improved, fostering a more emboldened stance when it comes to M&A.
Private Capital Takes Center Stage
Take-private activity accelerated sharply in 2025, with average quarterly volume reaching $64B, nearly triple 2023 levels, as high public‑company costs and persistent pressure to manage short-term market reactions drove more companies to pursue private ownership. The share of US public companies with a control shareholder rose to 14.2% even as the overall number of public companies declined, underscoring a continued shift in ownership and governance dynamics.
Pressure Mounts As Sponsors Are Pushed to Deploy Capital
Private equity deal volume climbed +64% YoY in 2025, led by a +162% surge in large-cap transactions ($5B+). Although US dry powder remains near $2T, slower fundraising is heightening pressure on sponsors to deploy capital and exit aging portfolio companies. Hold times continue to lengthen as sponsors sit in limbo between balancing the need to return capital to LPs with achieving sufficient DPI to avoid constraining future fundraising.
Corporates Double Down on AI and Core-Business Strengthening
Strategic M&A remains robust, supported by strong cash reserves and tariff-driven cost pressures that encourage consolidation. Corporates are buying AI-enabled capabilities through targeted acquisitions, while also pursuing in-sector combinations amid a more permissive regulatory climate. Divestitures rose +54% YoY as companies refocus on core assets and unwind underperforming acquisitions.
Regulators Clear a Wider Path, but Tariff Uncertainty Lingers
The FTC reinstated early termination for HSR filings in February 2025, streamlining the deal review process. Regulators are increasingly favoring structural remedies, namely targeted divestitures, over behavioral commitments, allowing larger transactions to clear more easily. Uncertainty around emergency tariffs persists, with key legal decisions expected early in the year.
Sources
- Dealogic; reported based on announced transactions through December 31, 2025. US M&A based on activity involving a US target.
- FRED Economic Data – St. Louis Fed.
- The Conference Board Measure of CEO Confidence in collaboration with The Business Council
- Capital IQ dry powder as of January 6, 2026; reflects vintage year from 2004 to 2025.
- FactSet take-private volume as of January 2, 2026.
- Capital IQ US listed public companies with a control shareholder as of January 6, 2026.
- World Bank Group as of December 31, 2024.
- Mergermarket as of January 5, 2026.
- FTC Legal Library early termination requests as of January 5, 2026.
