Is M&A activity still rising in 2026?

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Yes, and the numbers are bigger than they looked in Q1. Global M&A reached US$3.19 trillion through the first seven months of 2026, up 36% year over year, within reach of the January-to-July record set in 2021, according to LSEG. Deal count over the same period fell about 10% to roughly 28,000 transactions.

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The split flagged in the spring has widened. In Q1, deal value was up 26% while count was down 17%.

Seven months in, value is up 36% and the fewer deals getting done are substantially larger. Forty-eight mega-deals above US$10 billion were announced through July, worth a combined US$1.29 trillion, roughly 40% of all M&A activity and the highest January-to-July mega-deal total on record.

The rebound is real and top-heavy. PwC's mid-year read underlines this point: deals above US$5 billion now account for 48% of global deal value, up from 39% in 2025 and 26% in 2024. Strip out the mega-deals and total deal value actually declined 4%. 

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Why M&A keeps rising and where it's concentrating

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Five forces are driving the current wave and each one is pushing capital toward fewer, bigger, more strategic transactions. Understanding where the pressure concentrates helps corporate development teams anticipate where competition for assets will intensify and position ahead of it.

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AI has split into two markets

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AI is still the driving function for acquisitions across industries. What changed since spring is that the AI deal market has split in two. Infrastructure-layer assets like data centers, computing, and power are commanding extraordinary valuations on the basis of contracted demand, while application-layer valuations are correcting, according to BCG.

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You can see it in the sector data. In the US, technology deal value rose 161% and power and utilities deal value rose 329% over May to July versus the prior year, according to EY. Power availability has become the binding constraint on AI-driven growth, and nuclear assets have moved from the periphery to the center of deal activity.

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For corporate development teams, the lesson is that "an AI deal" is no longer one thing. Acquiring computing or power capacity is a scarcity play with rising prices. Acquiring an application-layer company is a bet on differentiated capability at a moment when the market is repricing exactly that question. The teams that separate the two theses are underwriting them correctly. The teams that treat every AI target as the same kind of asset are the ones most exposed when multiples move.

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Large companies are reshaping portfolios

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The post-pandemic wave of diversification is still unwinding. Strategics are divesting non-core businesses and redeploying the proceeds into areas of competitive strength. That creates sellers and buyers at the same time, and it means the process involves as much disciplined divestiture thinking as acquisition strategy. 

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This reinforces the need for a clear deal thesis before entering any process. When the market is full of assets coming available for strategic reasons, the teams with the tightest criteria close the right deals while the teams without criteria close the easy ones.

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Private equity is under pressure to move on both sides

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PE and corporates are sitting on nearly US$2 trillion of undeployed capital, and the pressure to put it to work is now matched by pressure to return it. As of early 2026, 34% of PE-held portfolio companies had been owned for more than five years, up from 25% a year earlier, according to PwC, and limited partners are pushing hard for distributions.

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Financial buyers need exits and deployment simultaneously, so they are moving on quality assets with real urgency. Corporates are competing against well-capitalized sponsors more often than they were in 2023 or 2024, and when PE is in the room, speed of process and certainty of close matter more, not less.

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Cross-border activity is at levels not seen in years

Cross-border M&A reached US$1.05 trillion through July, the highest January-to-July total since 2007, according to LSEG. European deal value climbed 78% to US$773 billion, its highest in nearly two decades, and the Americas rose 51% to US$1.84 trillion. Asia-Pacific value fell 8% even as deal count rose.

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For corporate development teams, cross-border volume raises diligence complexity. These deals introduce regulatory, cultural, and operational integration variables that purely domestic transactions do not, and geopolitical friction is extending timelines in energy-intensive sectors in particular. The teams that handle them best have built repeatable diligence systems that account for jurisdictional variance instead of improvising it deal by deal.

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Listen to a recent podcast episode about managing the intricacies of cross-border deals with Jennifer Lipschultz (ECI Solutions): https://www.mascience.com/podcast/the-back-office-surprises-nobody-warned-you-about-when-going-global

Mega-deals are carrying the market

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Deal count is down 10%. Deal value is up 36%. That math only holds if the deals getting done are far larger than average, and they are. Mega-deals above US$10 billion made up roughly 40% of all activity through July, and on PwC's count deals above US$5 billion now represent nearly half of global deal value.

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This concentration has real implications for how mid-market corporate development teams should read the market. The headline numbers suggest a hot market. The deal-count numbers tell a different story: competition for quality assets is intense, processes are rigorous, and the margin for error in diligence and deal thesis validation is smaller than the aggregate figures imply.

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Why 2026 is still not the 2021 boom

The 2021 boom ran on cheap capital, pandemic-recovery optimism, compressed timelines, and high valuations that many acquirers paid without adequate scrutiny. SPAC activity peaked, and speed was a competitive advantage, often at the expense of diligence quality.

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2026 is being shaped by different forces, and the gap has grown clearer since the spring:

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• Sentiment is up but still cautious. BCG's M&A Sentiment Index reached 84 in Q2 2026, up from 79 at the start of the year but still below the long-term average of 100. Europe sits at 101, the only region above trend; Asia-Pacific is at 55. Confidence is returning unevenly, not roaring back.
• The most active sector is the most cautious. Technology leads all sectors in deal value and sits at the bottom of BCG's sentiment ranking at 52. Capital is deploying into tech faster than conviction is, which is not what a euphoric market looks like.
• AI as stated rationale is cooling even as AI deals grow. AI was cited as strategic rationale in a third of the top 100 corporate deals in 2025; that fell to 17% in H1 2026. Buyers are still doing AI deals-they are just making fewer sweeping claims about them.
• Financing is tighter, not looser. The rate relief dealmakers expected has not fully materialized. PwC now frames the backdrop as higher-for-longer, with sticky inflation and record sovereign debt competing with M&A for capital. Financing assumptions that looked conservative in the spring need another look.
• Integration accountability is the price of approval. Boards and investors are asking harder questions about integration track records before signing off. The acquirers that struggled through overpriced 2021-2023 deals and unrealized value are informing how boards weigh the current cycle. The market is more active and more skeptical at the same time.

What this market means for corporate development teams

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A rising M&A market does not mean easier deals. In a concentrated market, it means the opposite.

More capital chasing fewer quality assets means faster processes and less tolerance among sellers for unprepared buyers. When activity concentrates in mega-deals and strategic transactions, the pressure on each individual deal to be right goes up.

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Several patterns show up consistently when markets get this active and this selective:

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1. Teams without a shared M&A operating language slow down at the worst moments. A deal moving at the pace of a competitive process leaves no room for internal disagreement about what diligence should cover or how integration should begin. Teams that move fast and stay disciplined did the alignment work before live deal pressure hit.
2. Diligence quality drops when teams run too many parallel processes. Without standardized diligence questions by deal type, teams either over-invest in cycles that never close or under-invest in the ones that do, surfacing problems after LOI.
3. Integration planning that starts at LOI beats integration that starts at close. An active market exposes teams that treat integration as a post-close activity. The window between LOI and close is where the integration thesis gets built properly or gets improvised, and the improvised versions cost more and take longer.

How buyers should prepare for the rest of the 2026 cycle

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The teams that perform well from here are the ones building operating capability now, before the next deal appears. 

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Build a deal thesis framework before diligence expands. Every deal needs a thesis that can survive challenges. What is the strategic rationale? What is the value capture plan? What integration assumptions does the thesis depend on? Answering these before diligence expands keeps teams from riding sunk costs down the wrong path. In a market repricing AI application-layer assets in real time, a thesis that names its assumptions is what separates a disciplined bet from a hope.

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Standardize diligence questions by deal type. Not every deal needs the same depth in every workstream. Teams with diligence frameworks built by deal type (capability acquisition, market entry, platform build, bolt-on) move faster and miss fewer critical issues.

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Create decision checkpoints before IOI and LOI. The most expensive place to change your mind is after LOI. Build clear go/no-go criteria at each gate: initial screen, IOI, management presentation, LOI, and confirmatory diligence.

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Train newer team members before live deal pressure hits. Corp dev teams usually learn M&A by doing it. That works when volume is low and timelines are loose. In a fast, concentrated cycle, team members without a foundational operating framework slow everyone down at the critical moments.

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Build integration playbooks from real deal experience. Generic integration checklists create false confidence. The teams that integrate well build playbooks from their own deal history: what went wrong, what they would do differently, what the integration kickoff should actually cover.

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If your team is heading into the back half of a concentrated deal cycle without repeatable systems for diligence, deal thesis validation, or integration planning, M&A Science Membership includes DealPilot, a deal guidance layer built on 400+ practitioner interviews, so your team can move faster without losing discipline. Explore M&A Science Membership

Frequently asked questions about M&A activity in 2026

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Is M&A activity still increasing in fall 2026? Yes. Global M&A reached US$3.19 trillion through the first seven months of 2026, up 36% year over year, according to LSEG. Deal value keeps rising while the total number of transactions has fallen roughly 10%, pointing to a more concentrated, more strategic market than the aggregate figure suggests.

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Why does deal value keep rising while deal count keeps falling? The deals getting done are larger and more strategic. Mega-deals above US$10 billion made up roughly 40% of activity through July, and deals above US$5 billion now account for nearly half of global deal value on PwC's count. Excluding mega-deals, total deal value has actually declined. Boards and corp dev teams are more selective about which processes to enter, but when they move, it is for significant transactions.

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How is the 2026 market different from the 2021 boom? The 2021 boom ran on cheap capital, pandemic-recovery optimism, and inflated valuations that produced overpriced deals and integration problems. The 2026 cycle is driven by strategic urgency, AI infrastructure demand, portfolio simplification, and more selective capital, against a higher-for-longer financing backdrop. BCG's sentiment index has improved to 84 but remains below its long-term average of 100. Boards are applying more scrutiny before approving deals.

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What is the AI bifurcation in M&A? The AI deal market has split into two. Infrastructure-layer assets like data centers, computing, and power are commanding extraordinary valuations on contracted demand, while application-layer company valuations are correcting, according to BCG. Power availability has become the binding constraint on AI-driven growth, pulling capital into utilities and nuclear. For buyers, an infrastructure deal and an application deal now require different theses and different underwriting.

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What sectors are driving M&A in 2026? Technology leads all sectors in deal value, followed closely by industrials and energy and power. In the US, technology and power and utilities deal values both surged over the summer, per EY. Financial services consolidation and healthcare acquisitions ahead of patent expirations are also prominent, and cross-border activity is at its highest January-to-July level since 2007.

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How should corporate development teams prepare for the rest of the cycle? Teams that perform well in fast, concentrated markets do the foundational work before deal pressure hits: a clear deal thesis framework, standardized diligence by deal type, decision checkpoints before LOI, and integration playbooks built from real deal experience. Teams that lack these systems slow down exactly when deals move fastest.