After years of hesitation, the global M&A market roared back to life in 2025. Deal value surged 43% to $4.7 trillion — 20% above the ten-year average — and momentum is carrying firmly into 2026. For dealmakers, the message is clear: standing still is no longer an option.
The question that plagued boardrooms for the past few years was never whether opportunities existed. It was whether the moment was right to pursue them. Capital costs, regulatory uncertainty and geopolitical risk changed the calculus of every transaction. Many deals that looked compelling on paper simply couldn't gather enough conviction to get across the line.
Then something shifted. As 2025 unfolded, hesitation gave way to pragmatism. Boards grew more willing to act without perfect visibility. Investors recalibrated expectations. Dealmakers began to move again — selectively, and with intent.
What emerged is a market rebounding on fundamentally different terms. There is less tolerance for loose strategies and uneven execution. The companies getting deals done in 2026 are the ones treating M&A not as a reaction to opportunity, but as a deliberate instrument of strategy.
Here are six trends every dealmaker should understand heading into the year ahead.
1. Dealmaking as a Response to Disruption, Not Just Growth
For years, M&A was primarily a growth story — buy to expand, buy to diversify. That narrative has evolved. Repeated rounds of external shocks — trade wars, pandemics, supply chain disruptions, geopolitical realignment — have made executives acutely aware that transactions can also help control costs, protect margins, and mitigate risks.
Only a third of executives surveyed in 2025 said they were confident in their organisation's ability to manage external challenges such as trade policy shifts, macroeconomic shocks and major global crises. The result? Companies are no longer treating M&A as discretionary. They are using transactions to address rapid change, strengthen resilience, streamline portfolios and reposition for sector and regional shifts that are happening faster than organic strategies can keep pace with.
What this means for dealmakers: Due diligence frameworks need to move beyond financial and operational analysis. Understanding a target's resilience to geopolitical disruption, supply chain exposure, and regulatory risk is now as critical as assessing revenue multiples. Acquirers who articulate a clear strategic rationale grounded in resilience — not just growth — will find more receptive boards and investors.
2. The Hunt for New Sources of Growth — Welcome to the "Arena Economy"
Not all industries are created equal. Research shows that 18 fast-growing and highly dynamic sectors — so-called "arenas" that combine business model or technological step changes with large and growing addressable markets — could reshape the global economy by 2040, potentially growing from 4% of GDP to 16%.
Dealmakers are pivoting hard towards these arena industries. They now account for a striking 40% of global deal value, up from just 7% twenty years ago. Software leads the pack, followed by information-enabled business services and cloud computing. These arena companies command average enterprise value-to-EBITDA multiples of 27.1x, compared to 16.5x for established companies — a premium that reflects their growth trajectories.
Here's what's especially noteworthy: corporate acquirers from established, traditional industries accounted for 33% of deal value involving arena targets in 2025, up from 24% five years ago. Financial sponsors also increased their investment in arena targets to 24%, up from 18%.
What this means for dealmakers: The competition for high-growth targets in the digital economy is intensifying. Sellers in arena industries hold significant leverage, and valuations reflect that. Acquirers need to come prepared with differentiated value-creation stories. For those advising on deals, the ability to bridge the cultural and operational gap between traditional acquirers and tech-native targets will be a critical skill.
3. Big is Back — The Return of the Megadeal
One of 2025's most striking patterns was the return of blockbuster transactions. The number of deals exceeding $10 billion swelled to 60 — the most since the post-pandemic M&A peak in 2021. Large-deal value more than doubled, rising 112% to $1.3 trillion and accounting for 28% of total deal value, up from 19%.
The year featured ten transactions exceeding $30 billion, compared with just four in 2024, including one of the largest deals in history: Union Pacific's agreement to acquire Norfolk Southern for $89.5 billion to create the first transcontinental railroad in the United States.
Several forces are driving this: higher tech valuations, consolidation imperatives in low-growth markets, and the demands of entering new geographies at scale. More than half of deals worth over $4 billion in 2025 were categorised as consolidations. Meanwhile, moves into new territories accounted for 23% of deals, up five percentage points from the prior year.
Technology, media, and telecommunications (TMT) accounted for ten of the world's 20 largest deals, spanning streaming, social media, cybersecurity, AI infrastructure, and satellites.
What this means for dealmakers: Large, complex transactions demand rigorous integration planning from the earliest stages of the deal process. The margin for error on a $10 billion-plus deal is razor thin. Acquirers need detailed operating model blueprints before signing, not after. Advisors and counsel must be equipped to manage the regulatory complexity, cross-border dimensions, and stakeholder communications that megadeals inevitably entail.
4. Portfolio Spring-Cleaning — Divestitures Hit Their Stride
While acquisitions grab the headlines, 2025 was equally a story about what companies chose to let go of. Divestiture value — including spin-offs, carve-outs, and sales of assets — grew 30% to $1.6 trillion, the highest level since 2021.
The Americas led the way, accounting for $901 billion or nearly 58% of global separations activity. In Japan, government encouragement to shed less competitive businesses drove a 32% increase in divestments. In the consumer packaged goods sector, companies like Kraft Heinz and Keurig Dr Pepper announced plans to split into separate entities — a clear signal that sprawling portfolios built for the last decade no longer align with how markets and consumer preferences are evolving.
Activist investors added fuel to the fire. Campaigns reached a five-year high in 2025, up 15% from 2024, with about a third of campaigns related to M&A. Activists won a record number of board seats in the United States and secured faster settlements as companies sought to avoid prolonged public battles.
What this means for dealmakers: Sellers should be thinking about dual-track strategies — preparing simultaneously for an IPO or spin-off and a trade sale — to maximise flexibility and value. For acquirers, the current wave of divestitures presents a rich pipeline of high-quality, focused assets coming to market from companies that are streamlining rather than distressed. The best deals may be found not in competitive auctions, but in proactive conversations with corporates re-evaluating their portfolios.
5. Private Equity Gets Its Mojo Back
After a prolonged period of caution, private equity (PE) came roaring back. PE-led deal value surged 54% in 2025 to $1.2 trillion — outpacing the broader market's 43% growth. Average deal sizes swelled to $890 million, as sponsors pursued the efficiency of fewer, larger bets.
But the real story is the pressure building behind the scenes. Average hold times have stretched to 6.2 years, up from 4.0 years in 2009. Approximately $2.2 trillion in dry powder has accumulated while sponsors delayed exits. Limited partners' demand for returns and liquidity is, by many accounts, reaching a boiling point.
PE fundraising has dropped sharply — declining more than 34% to $440 billion — because without exits, investors have less cash to reinvest in new funds. In response, some general partners have turned to secondary markets and continuation vehicles to meet liquidity needs. The global secondaries market hit record volumes, with the $162 billion value from 2024 surpassed by the third quarter of 2025.
There is reason for measured optimism. Lower interest rates, improving macroeconomic conditions, and pent-up demand for exits should continue to fuel PE activity. Sponsors are increasingly focused on sectors less susceptible to trade policy disruption — software, financial services, domestic services, and digital infrastructure.
What this means for dealmakers: The PE exit backlog represents one of the most significant dynamics in the market today. Expect a wave of portfolio company sales, secondary buyouts, and IPOs as sponsors finally move to crystalise value. For corporate acquirers, this creates a deep pool of well-managed, operationally improved assets to evaluate. For PE firms looking to deploy capital, the competitive intensity for quality targets will remain fierce — a premium on speed, proprietary deal flow, and creative structuring.
6. AI Transforms the Deal Process Itself
Perhaps the most forward-looking trend is the transformation that artificial intelligence is bringing to M&A execution itself. Deal cycles have become 10–30% faster, and M&A activities are roughly 20% cheaper for teams deploying generative AI tools.
The applications are expanding rapidly across every stage of the deal lifecycle:
- Target identification is evolving from a one-off screening exercise to an end-to-end, proactive, opportunity-sourcing approach. Advanced AI-powered scouting platforms can now identify and score hundreds of potential targets against custom strategic criteria in less than a day.
- Due diligence is being accelerated by AI tools that can search, summarise, and organise thousands of data room files — analysing financials, customer sentiment, and competitive positioning while cross-referencing public and proprietary data.
- Integration planning and execution stands to be the most transformed area. Current AI agents can already produce day-one readiness plans, draft communications materials, and organise integration tasks. Within two to three years, AI tools are expected to automate more than 50% of all integration-related tasks.
Despite this promise, only 30% of M&A practitioners report moderate to high engagement with AI tools, and most still rely on commercially available chatbots rather than customised solutions. The top barrier? A lack of in-house expertise.
What this means for dealmakers: A wait-and-see approach to AI in M&A carries real risk. Teams that invest now in building AI fluency, formalising deal playbooks, and structuring historical deal data will be best positioned to capture value as the tools mature. The firms that treat AI as a strategic enabler — not a novelty — will execute faster, identify better targets, and integrate more effectively than their competitors.
A Playbook for 2026
The trends above are interconnected. Geopolitical disruption drives portfolio restructuring. Portfolio restructuring creates acquisition opportunities. AI accelerates the entire cycle. The dealmakers who thrive in 2026 will be those who see these dynamics as a system, not a set of isolated forces.
Five practical priorities stand out for the year ahead:
- Develop strong M&A plans that support bold decision-making and faster pivots when geopolitical or market conditions change. Comprehensive plans that outline target markets, constraints, roadmaps, and risk mitigation steps help acquirers adjust direction efficiently.
- Conduct objective portfolio reviews on a regular schedule, not only in response to outside pressure. Maintain both public listing and trade sale options to preserve flexibility.
- Build a persuasive deal rationale grounded in a broad set of synergies, including cost, revenue, and capital benefits. In periods of uncertainty, investors expect clearer and more rigorous justification. Transactions based solely on cost savings are increasingly seen as inadequate.
- Establish a geopolitical coordination hub: a cross-functional team that tracks developments in real time and evaluates their impact on strategy, operations, and the deal pipeline.
- Strengthen AI-enabled M&A capabilities, from target identification through integration. Begin with a candid review of current processes, build team fluency, secure executive sponsorship, and implement a one- to two-year adoption plan.
The Bottom Line
Global M&A activity is expected to pick up strongly in 2026. But strong activity does not mean an easier environment. Geopolitical tensions, regulatory scrutiny, uneven economic conditions, and fast-moving technology continue to shape the landscape. What has shifted is the willingness to move. Boards and investors are no longer waiting for perfect clarity. They are backing dealmakers who are prepared, decisive, and able to treat M&A as an ongoing strategic capability rather than a one-time transaction.
Andersen South Africa's corporate and transaction advisory teams support clients across the full deal lifecycle, from strategy and structuring to due diligence, regulatory compliance, and post-deal integration. Whether you are pursuing an acquisition, planning a divestiture, or strengthening your organisation's M&A readiness, we can help you navigate the opportunities ahead.
This article draws on McKinsey & Company's 2026 M&A Trends report, “Navigating a Rapidly Rebounding Market” (February 2026), and reflects Andersen's perspective on what these trends mean for our clients and the markets in which we operate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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