By Jeff Jacobs, Head of M&A and COO of Investment Banking, Solomon Partners
Over the past few weeks, I’ve compared notes with M&A bankers and deal lawyers around the country. The conversations have been remarkably consistent: The “new normal” in dealmaking is persistent uncertainty. And yet, the tone isn’t bearish. If anything, many senior practitioners sound more pragmatic than I’ve heard in years.
The headline issues — geopolitical volatility, inflation anxiety, commodity price spikes and regulatory unpredictability — would have historically slowed board-level decisions and pushed transactions to the sidelines. However, the data suggests that’s not the case. In fact, Q1 2026 US M&A volumes were up 39% year over year. What’s different today is not the absence of risk, but the way boards and management teams are learning to operate through it. In many situations, uncertainty has become a parameter to underwrite rather than a reason to pause.
That shift has real implications for how deals are priced, structured and defended. Below are some of the key themes present in today’s M&A market, and the implications for boards, CEOs and financial sponsors charged with making strategic decisions.
1. Uncertainty is a constant — but it’s no longer a deal-stopper.
One of the most encouraging signals is that deal momentum is not vanishing simply because the macro picture is noisy. Boards have adjusted expectations: diligence may take longer, financing conditions may change quickly and regulatory timelines can be hard to predict. But in many sectors, strategic imperatives — portfolio pruning, technology investment, supply chain resilience and scale — are too important to defer indefinitely.
The practical takeaway is that preparedness matters more than perfect timing. Companies that have clarified their strategic “must-haves,” pressure-tested their standalone plans and aligned early with key stakeholders are in a much better position to act when an opportunity — or a threat — emerges.
2. Valuation gaps are lingering longer than many anticipated.
One of the most common friction points today is the buyer-seller valuation gap. Sellers remain anchored to intrinsic value and long-term fundamentals, expecting buyers to pay for durable growth and future optionality. Buyers, by contrast, are leaning harder on near-term performance, margin sustainability and macro risk — often with a heavier discount rate than sellers would like.
Buyers are no longer willing to pay up for businesses where a significant portion of expected value is driven by expectations far in the future. Likewise, sellers can longer achieve outsized credit for long-dated cash flows that may yield future upside if they successfully navigate today’s turbulent markets. Today’s buyers — especially those writing large checks — are more skeptical about future performance and less willing to look past the present uncertainties that may be impeding a company’s growth.
For boards considering a sale or major divestiture, this creates a planning imperative: articulate the value creation path in a way that is concrete, easily underwritten and resilient to macro shocks. A narrative that leans exclusively on distant projections is unlikely to close the gap on its own.
3. Today’s high valuations aren’t just “hopes and dreams” — but the durability debate is real.
Many investment bankers and lawyers draw parallels to prior periods where valuations ran ahead of fundamentals. The important nuance I keep hearing is that several of today’s highest-value companies are generating substantial cash flow. That matters. It changes the nature of the conversation from “Does this model work?” to “How durable is this cash flow in a world being reshaped by technology, competition and regulation?”
In other words, the disagreement is often less about whether the business is real and more about the sustainability against the backdrop of an uncertain world that is rapidly being reshaped by Artificial Intelligence. For acquirers, that puts a premium on diligence that goes beyond financial statements — customer concentration, switching costs, product roadmaps, data advantages and the practical impacts of AI are now central to underwriting.
4. Creative structures are becoming standard tools — not exceptions.
When pricing gaps persist, dealmakers do what dealmakers have always done: they innovate. I’m seeing more willingness to use structures that allocate risk and preserve momentum. Earnouts, contingent value rights and other performance-based mechanisms are being used more frequently to bridge differences in outlook. In private capital contexts, continuation vehicles and other bespoke solutions are also increasingly common.
There’s nothing inherently “new” about these tools, but their broader acceptance is notable. Importantly, they work best when the contingent metrics are simple, measurable and aligned with how the business is actually run. Overly complex structures can create as much friction post-close as they solve at signing.
For boards, the governance point is clear: If you want optionality, you may need to embrace complexity — selectively. The right structure can preserve headline value while protecting against downside. The wrong structure can distract management and invite disputes.
5. Hostile dynamics and defensive preparedness are rising again.
Several lawyers I’ve spoken with have been blunt: market volatility can make friendly deals harder to negotiate, and when friendly paths narrow, hostile activity becomes more likely. At the same time, activist engagement continues to rise, often with familiar playbooks — simplifying structures, pushing divestitures of non-core assets and arguing that conglomerate discounts should be addressed through separation.
Two developments are worth highlighting. First, traditional structural defenses — and the willingness to consider them — appear to be re-entering the conversation in a more meaningful way. Second, activists are increasingly bypassing the usual private back-and-forth and taking their case directly to shareholders, which can compress timelines and force boards to respond in real time.
In those situations, the playbook is familiar — proxy contests and vote solicitations; open letters and investor decks that frame the value-creation thesis; and coordinated digital outreach, including targeted engagement with large institutional holders. The common thread is speed: shape sentiment early, build momentum quickly and make it harder for boards to control the narrative.
None of this means every company should adopt a bunker mentality. But it does mean boards should revisit preparedness: Do you have a current vulnerability assessment? Is your shareholder engagement plan credible? Are your advisors identified in advance? If a situation escalates, speed and coordination matter.
A final thought: Volatility is shaping the market, but it’s not stalling M&A activity for Boards and advisors who are adequately prepared.
My biggest takeaway from recent conversations is that uncertainty is not suppressing M&A so much as reshaping it. Deal volume will ebb and flow, but capable buyers and thoughtful boards are still leaning in. The winners in this environment will be those who treat volatility as a factor to manage — not an excuse to wait — and who prepare early enough to move decisively when the window opens.