1. The Great Divide: Two Very Different M&A Markets
One of the biggest surprises in late 2025 was not just the recovery of M&A, but how uneven it was. Large deals returned in a big way. In the US, deal value in the third quarter of 2025 rose 56% to a four-year high of US$598 billion, according to Deloitte. Globally, total deal value reached USD2.03 trillion in the second half of the year, based on data from A&O Shearman. There were 63 deals worldwide valued at $10 billion or more.
At the same time, the total number of deals did not grow much. This shows a clear split in the market. Very large deals are driving most of the total value, while a separate mid-market is growing in importance. Private equity firms are especially active in this space, focusing on many smaller deals instead of a few massive ones.
These trends together create new opportunities, especially in mid-market and smaller transactions. Value creation is no longer limited to the largest deals. However, this also means strategies must differ depending on which part of the market you are operating in. This split is only one part of a broader shift, as companies are also changing their own structures.
2. The Big Breakup: Why Selling Assets Is a Key Trend
Although buying companies gets most of the attention, selling parts of companies is becoming just as important. In 2026, spin-offs, carve-outs, and divestitures are rising quickly. In the first three quarters of 2025, divestitures increased 31% compared to the same period in 2024.
This wave is different from past ones. It is not driven by financial trouble. Instead, companies are making deliberate choices to simplify their businesses. By selling non-core assets, management teams can focus on what matters most, reduce complexity, and often achieve higher valuation multiples.
For finance professionals, this creates new opportunities and challenges. Divested businesses can become acquisition targets or even buyers themselves. At the same time, evaluating a carve-out requires more detailed analysis than a typical acquisition, especially when estimating standalone costs and future growth. As companies reshape themselves, technology is also playing a growing role in how deals happen.
3. The AI Effect: Changing Why Deals Happen and How They Get Done
Artificial intelligence is not just another investment theme. It is changing both the reasons for deals and the way deals are executed.
AI as a Driver of Deals (The “Why”)
Companies are racing to build strong AI capabilities. To do this, they are buying data, infrastructure, and specialized talent. This has pushed AI-focused deal activity higher. In the first three quarters of 2025, AI-related companies made up 64% of all US venture deals. This demand for AI capabilities is also influencing large corporate acquisitions.
AI as a Tool for Deal Execution (The “How”)
At the same time, AI is speeding up the deal process itself. Advanced AI systems can review thousands of documents in hours, identify risks faster than human teams, and model integration scenarios. This allows deal teams to move more quickly and make better decisions.
According to Accenture, adopting generative AI at scale could unlock $10.3 trillion in additional economic value by 2038. As a result, AI is no longer optional. High-performing deal teams are expected to use it. However, faster deals also come with higher expectations and deeper scrutiny.
4. Buyer Beware: Due Diligence Is Tougher Than Ever
Even though the M&A market is stronger, buyers are being very selective. They are looking for companies with solid margins, reliable cash flow, and recurring or contractual revenue.
Due diligence now goes far beyond financial statements. Buyers closely review technology systems, cybersecurity, AI strategies, data privacy, and regulatory compliance. This means sellers must be well prepared.
The most successful sellers in 2025 had 12 to 24 months of clean, adjusted financials and involved their legal, tax, and accounting advisors early. This level of preparation is no longer optional. It is required to handle intense diligence and defend valuation. On top of this pressure, companies must also deal with a changing role for government.
5. The Government’s New Role: Investor, Not Just Regulator
Traditionally, governments influenced M&A mainly through regulation. In the US, for example, the Committee on Foreign Investment in the United States (CFIUS) reviews deals for national security risks. While this oversight continues, the government is now also acting as an investor.
To strengthen key domestic industries, the federal government has taken direct equity stakes and secured special rights in certain companies. Examples include:
Investing $8.9 billion for a 9.9% stake in Intel
Taking equity stakes and signing supply agreements with rare-earth companies such as MP Materials
Receiving a “golden share” with governance rights in the Nippon Steel and U.S. Steel deal, even though President Biden had blocked the acquisition months earlier
This approach blurs the line between public policy and private business. Companies in sectors like semiconductors, energy, defense, and critical minerals now face new strategic considerations when planning deals.
Conclusion: Preparing for the M&A Reset
The M&A market in 2026 is not just recovering. It is being reshaped. Large and mid-market deals are following different paths. Companies are selling assets to sharpen focus. AI is accelerating dealmaking while raising expectations. Due diligence is more intense, and governments are becoming direct participants.
To succeed, finance leaders must understand these shifts and prepare for a more complex environment. The key question is no longer whether M&A activity will return, but how organizations will position themselves to lead in this new era of dealmaking.
Sources
• "2026 M&A Trends Survey: A tale of two markets" (Deloitte US)
• "Middle-Market M&A at the Close of 2025: What Business Owners Should Expect in 2026" (Offit Kurman)
• "Momentum returns: 3 forces shaping M&A in 2026" (Accenture)
• "Global M&A Insights 2025: Trends and Outlook for 2026" (A&O Shearman)
• "Mergers and Acquisitions — Reviewing 2025 and Looking Ahead to 2026" (Harvard Law School Forum on Corporate Governance, based on a Wachtell Lipton memorandum)