M&A Outlook and Trends

US M&A activity gained momentum through the first half of 2026 despite renewed inflationary pressure, geopolitical uncertainty, and a more volatile interest rate outlook. Announced US M&A volume reached approximately $1.7 trillion, +72% year-over-year, putting activity on pace to exceed 2025 levels. M&A volumes were driven by large-cap transactions where strategic acquirors are dominating dealmaking activity. Meanwhile, improving public market conditions, available financing, and increasing investment in AI-related capabilities continued to support transaction activity across sectors.

Acquisition Capital Continued to Flow

Capital was deployed to attractive assets, while financing markets became increasingly selective. Public debt, syndicated loan and private credit markets were active, with acquisition-related loan issuance reaching $94 billion during H1 2026, approximately +18% versus H1 2025. At the same time, lenders applied greater scrutiny to sector exposure and business quality, particularly in areas facing AI-driven disruption. Financing continued to be accessible for companies with durable cash flows and compelling strategic rationales, but underwriting standards tightened across select industries.

Equity Markets Gained Momentum Following Q1 Pullback

Public equity markets rebounded sharply following early-year volatility, driven by strong corporate earnings and continued investor enthusiasm surrounding artificial intelligence. The S&P 500 reached record highs and increased approximately 10% year-to-date as of July 2026, helping restore confidence across capital markets. Improving public market conditions strengthened confidence around strategic acquisitions, stock-based transactions, and IPO activity. Traditional IPO proceeds reached $117 billion year-to-date, already exceeding full-year 2025 levels, although investor appetite was concentrated around AI-related opportunities.

Sponsor Activity Remained Subdued as Selectivity Increases

Financial sponsor activity continued to experience headwinds from valuation gaps between buyers & sellers and a challenging exit environment. Sponsor-backed deal volume declined 38% year-over-year in Q2 2026, while median buyout purchase multiples compressed to 9.75x EV / LTM EBITDA, the lowest level in more than a decade. Slower exit activity and fundraising pressures encouraged underwriting discipline, although significant private capital remained available. As a result, sponsors focused on high-conviction opportunities with clear paths to value creation and liquidity.

Global M&A Capital Favored US Assets

The US remained the preferred destination for global M&A capital. US targets accounted for approximately 53% of global M&A volume in H1 2026, +50% in 2025 and +45% in 2024, while the US share of cross-border transactions increased to 18%. Investors continued to view the US as offering a unique combination of scale, innovation and capital market depth, reinforcing its position as the primary destination for both domestic and international acquisition capital.