Goldman Sachs CEO Sees Strong Deal Environment
Goldman Sachs CEO David Solomon projected an optimistic outlook for 2026, citing robust fiscal support and AI-driven capital investment as catalysts for strong strategic activity. Solomon noted that dealmaking is picking up, particularly in the TMT and capital-intensive sectors. In line with this sentiment, the bank recently raised its price target on T-Mobile US, citing sector tailwinds.
- The M&A market rebound in the second half of 2025 was significant, with global deal values increasing by 36% to 40% compared to 2024, driven by a surge in megadeals (transactions over $10 billion). Goldman Sachs advised on a total of $1.48 trillion in deal volume in 2025, earning $4.6 billion in M&A fees. - Financial sponsors have been a major force, with private equity deal value up 60% year-over-year through September 2025. Sponsors are expected to drive more activity in 2026 as pressure builds to return capital to investors, with firms sitting on over $2 trillion in unallocated capital. - The Technology, Media, and Telecom (TMT) sector saw a 49% increase in deal value in 2025 and is expected to remain a hub of activity. Notable recent transactions include the record-setting $55 billion leveraged buyout of Electronic Arts by a consortium including Silver Lake and PIF, and Thoma Bravo's $12.3 billion take-private of Dayforce. - Consolidation in the Financial Institutions Group (FIG) is accelerating, with several multi-billion dollar deals announced in late 2025 and early 2026. Key examples include Santander's $12.18 billion acquisition of Webster Financial and PNC Financial Services' $4.1 billion deal for FirstBank. - A primary driver for TMT deals is the "innovation supercycle" around Artificial Intelligence, which is compelling companies to acquire new capabilities in areas like data centers, cybersecurity, and software. An estimated $5 trillion to $8 trillion in investment may be needed for AI-related infrastructure over the next five years. - In early February 2026, Goldman Sachs CEO David Solomon stated that M&A activity from strategic corporate acquirers was going to be "meaningfully higher" than the average over the last five years. He also noted that financial sponsor activity is accelerating as firms face pressure to sell assets and return capital. - The financing environment for leveraged buyouts (LBOs) is improving, with lower borrowing costs expected to increase LBO volume in 2026. Private credit is also playing a more central role in financing complex transactions. - Deal structures are evolving, with an increase in creative approaches like co-investments and consortium bids to share risk, particularly in larger transactions. There is also a rise in take-private deals as sponsors find value in publicly listed companies.
