U.S. M&A Surges, PE Confidence Soars
U.S. M&A activity is rebounding sharply, with deal value exceeding $1 trillion and private equity confidence hitting a six-year high of 86%.
AI is a major catalyst, influencing approximately one-third of the largest corporate M&A transactions in 2025. Companies are acquiring capabilities to scale AI, including cybersecurity, as seen in Google's acquisition of Wiz and Palo Alto Networks' proposed acquisition of CyberArk. Financial sponsors are expected to drive M&A activity in 2026 due to pressure to monetize aging portfolio companies, with roughly 13,000 sponsor-backed businesses held in private hands. Many have been held for over five years, exceeding typical fund timelines. Several large deals have been announced recently, including Devon Energy and Coterra Energy planning to merge in a $58 billion transaction, and SpaceX planning to acquire xAI in a deal valuing the combined entity at $1.25 trillion. Netflix is also in talks to acquire Warner Bros. Discovery for over $80 billion. Technology continues to lead megadeal activity, followed by banking and manufacturing. Sectors like financial services and technology are expected to see above-average activity in 2026, driven by strong fundamentals and deal momentum. The energy transition is also fueling M&A activity in the energy and utilities sector.
