In a year marked by not-insignificant change — geopolitical, economic, technological, regulatory and market — 2025 has been a year of much increased M&A activity, in the United States and around the world. M&A deal volume in the United States is on pace to reach approximately $2.3 trillion, up 49% from 2024, and global M&A deal volume is expected to increase by over 25%. Notably, the number of very large M&A deals in the U.S. this year —four $40 billion-plus deals year to date, up from zero such deals in 2024 — reflects a substantial increase in bolder transactions that may have been viewed as too risky in prior regulatory and market environments. Notwithstanding concerns around tariffs, inflation and ongoing global conflicts, the M&A market ends the year energized across numerous industries. With many deals, of all sizes, in the pipeline, we expect that 2025’s momentum will continue into 2026, even with a continued undercurrent of economic and political uncertainty. We review some key themes from 2025 and expectations of what may come in 2026.
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Mega Mergers Reemerge. This year has witnessed the reemergence of the megadeal, with 63 deals globally worth $10 billion or more through late November 2025, exceeding the prior annual high set a decade earlier and the 30 such transactions agreed in 2024. Many of the largest transactions were announced in the second half of the year, after initial concerns regarding tariffs and their consequences subsided. Major transactions this year included Union Pacific’s $85 billion combination with Norfolk Southern, Netflix’s $82.7 billion acquisition of Warner Bros., Teck Resources’ $69 billion merger of equals with Anglo American and Palo Alto Networks’ $25 billion acquisition of CyberArk. Notably, many of the acquirors in these big-ticket transactions have traditionally not engaged in significant M&A activity, another indicator of the attractiveness of the current dealmaking environment.
Private Equity Investments Rise. A significant portion of this year’s deal volume has been driven by private equity, as 2025 saw a rebound in sponsor exit activity, although exit hold periods continue to remain elevated as compared to pre-pandemic levels. Although the number of sponsor-led deals is up modestly year-over-year, deal volume is up more substantially as sponsors have focused on larger transactions. In fact, global private equity deal volume is expected to reach approximately $2 trillion by the end of 2025, a high since the banner Covid-era year of 2021. Significant private equity transactions this year include Thoma Bravo’s $12.3 billion acquisition of Dayforce, the $55 billion leveraged buyout of Electronic Arts (the largest leveraged buyout ever recorded) by Silver Lake, Saudi Arabia’s Public Investment Fund and Affinity Partners and the $18.3 billion leveraged buyout of Hologic by Blackstone and TPG. Certain of these transactions exemplify the trend of well-regarded sponsors pairing up with each other or with sovereign wealth funds to diversify risk and put together bids that may have been unattractive — or impossible — for a sponsor to do alone. In addition to consortium deals for acquisitions, the year also saw an increase in the number of partial exits and sponsor-to-sponsor sales. Sponsor activity increased in the second half of the year in particular, indicating ongoing momentum that is expected to continue into 2026.
Lift-off for Bank M&A. This year has also seen a sea change in regulatory receptivity for consolidation in the banking sector. Much has been written about quicker regulatory approvals, but the change in the banking sector is more fundamental. There is a consensus forming among the U.S. bank regulators that consolidation can result in a stronger, more efficient and more stable industry. In addition to the completion of Capital One’s $35.3 billion acquisition of Discover in May, this year has seen a number of substantial regional bank transactions with the combination of Synovus and Pinnacle Financial, Huntington’s acquisitions of Veritex and Cadence, Fifth Third’s acquisition of Comerica, PNC’s acquisition of FirstBank, Prosperity’s acquisitions of American Bank and Southwest Bancshares, and Mechanics Bank’s acquisition of HomeStreet, among others. The welcome shift of focus of bank regulators away from micromanaging banks toward material financial risks has also given reason for optimism in acquiring and growing banking franchises. During 2025, M&A also remained active across the broader financial services sector in asset management, insurance, payments, fintech and other areas.
Industries to Watch. While M&A activity has been widespread, a few industries in
particular are in the midst of dealmaking booms, in addition to the banking sector. For example, in the healthcare industry, a key theme has been fiercely competitive dealmaking as a way to remain ahead of peers — with perhaps no better example than the contentious takeover battle between Pfizer and Novo Nordisk to acquire obesity drug developer Metsera, which ultimately saw Pfizer prevail with a $10 billion offer.
Technology, artificial intelligence, energy and infrastructure and media also remain top of mind as we enter the new year. The race for AI resources is fierce throughout Silicon Valley and has led to “acquihire” transactions, through which larger AI companies seek to expand their talent pool by absorbing smaller startups, sometimes through novel structures. AI companies have also struck large, complex transactions for sheer computing power: OpenAI’s partnerships with Broadcom, NVIDIA and AMD are just a few of many examples. A continuing focus on AI is also bringing together the technology, industry and energy sectors, with hyperscalers like Alphabet, Microsoft and Amazon each expected to spend $100 billion or more on AI infrastructure by 2027. The technological innovation has also resulted in substantial legal innovation, such as the recapitalization of OpenAI’s for-profit organization into a public benefit corporation, controlled by the nonprofit OpenAI Foundation.
In the media and entertainment sector, as of this writing, what is shaping up to be one of the largest takeover battles in corporate history is continuing to play out, with Paramount Skydance launching an unsolicited tender offer in an attempt to top Netflix’s $82.7 billion deal to acquire Warner Bros. following a competitive auction process. As we predicted at the start of the year, technology, media and telecom accounted for a substantial portion of this year’s global deal volume at 30%, and we expect the same trends to continue into the new year, despite anticipated headwinds ranging from concerns of a bubble in the technology market to increased scrutiny from regulators, including those at the state level and in foreign jurisdictions. And finally, the oil and gas sector is expected to continue to see increased M&A activity in 2026, with the U.S. government’s executive orders and the One Big Beautiful Bill Act rolling back sustainability and decarbonization policies and introducing new tax incentives for oil and gas manufacturers.
Government Regulation and Investment. At the beginning of 2025, we predicted that the Trump administration would introduce an era of regulatory restraint instead of regulatory expansion. In general, the tone and approach of federal regulators, including those at the Federal Trade Commission and the Department of Justice, swung back toward more traditional antitrust analysis and enforcement, jettisoning the recently espoused anti-consolidation mindset and some of the more novel theories advanced by the prior administration. These changes should not be viewed, however, as suggesting that companies undertaking strategic transactions will be given a free pass. Antitrust authorities continue to closely scrutinize M&A transactions, including in industries — such as technology and healthcare — that are at the center of the Trump administration’s economic agenda. Likewise, the U.S. Securities and Exchange Commission has signaled several potential changes that are expected to be beneficial to public companies, such as easing disclosure obligations for smaller companies, ending mandatory quarterly reporting and creating more optionality for companies to exclude shareholder proposals from their proxy statements.
In addition, the Committee on Foreign Investment in the United States (CFIUS) remains a key consideration in many transactions: the President has signaled great interest in deals that could impact national security or the American public, as evidenced by approval of Nippon Steel’s acquisition of U.S. Steel on the condition that the federal government receive a “golden share” with certain governance rights in the storied American steelmaker, and despite the fact that President Biden had blocked the acquisition just months prior.
And in other contexts, the federal government has emerged as a dealmaker itself, taking equity stakes, governance rights and sometimes economic upside for taxpayers in order to bolster critical industries, such as rare earth, lithium and chip making. For example, the government invested $8.9 billion in Intel, which was paid for in large part by funds previously allocated under the CHIPS Act, to take a 9.9% equity stake and obtain other rights. The U.S. government also made investments to secure rare earth supply by taking equity stakes in, and in some cases entering into offtake and price support agreements with, companies such as MP Materials, Vulcan Elements and Trilogy Metals. In addition, Nvidia and AMD entered into an agreement with the U.S. government to share a portion of revenues from chip sales to China in exchange for export licenses to China for chips previously subject to restrictions.
Open Debt Markets. Debt financing played a key role in many of the largest and most consequential deals of 2025, including the acquisitions of Electronic Arts and Warner Bros., fueled by a debt market hungry for yield and new investment opportunities. Throughout the year, commercial banks provided investment-grade acquirors committed financing in large sums, and in several transactions introduced new (lower-cost) commitment structures that marked the first meaningful structural advance in investment grade acquisition financing in decades. Over the second half of the year, as big-ticket acquisitions by private equity sponsors and other non-investment-grade buyers surged, private credit funds cemented their place as a critical source of acquisition financing in this market, offering borrowers new options, terms and structures for leveraged deal financing. Regardless of whether the financing markets soar or sour in 2026, these developments in 2025 are likely to persist and will continue to inure to the benefit of borrowers, who have more potential financing sources and options going forward than ever before.
M&A-related Activism. Beyond proxy season activities, activists kept busy in the “off season” by targeting M&A deals. Activist shareholders pressured Core Scientific shareholders to abandon its $9 billion all-stock acquisition by Coreweave and continue to urge STAAR Surgical’s shareholders to vote down its $1.6 billion all-cash sale to Alcon. Conversely, activists have been outspoken in several notable cases about encouraging boards to consider strategic alternatives, including sales or spin-offs, in hopes of monetizing their investments. Along with other trends, M&A is expected to continue to be a major thesis for activist campaigns, including pushing for large-cap companies to look at transactions that might now be achievable in the current regulatory climate.
Further Themes. Several other trends are worth watching as we ring in the new year:
• Spin-offs remained popular in 2025, and that trend is expected to continue with
multiple large spinoffs expected to be completed in 2026, including Honeywell’s
spin-off of its aerospace technology business. Tax rules for spin-offs continue to
evolve as the Trump administration takes a more flexible approach than the prior
administration.
• There was a modest increase in IPOs in the U.S., particularly in the tech and fintech spaces. Notable IPOs completed this year included the record debuts of Circle and Figma.
• Contingent value rights (CVRs) have reemerged as consideration mechanisms in
public deals; 27 deals this year have included a CVR, a nearly four-fold increase from 2024. Given the prevalence of CVRs in pharmaceutical and biotech M&A and the level of activity in those industries, we expect to continue to see more CVRs in 2026.
• Sovereign wealth funds, particularly those in the Middle East, remain active
participants in major transactions, principally as equity investors in U.S. and
European dealmaking. Such funds have been particularly active in pursuing strategic
transactions in AI, data centers, semiconductors and sports and entertainment.
• Strategic M&A activity in the cryptoasset space will continue to grow, spurred by
industry maturation and increasing regulatory clarity with respect to the treatment of
cryptoassets under securities laws, stablecoins, and tokenization of real-world assets.
• Hostile and unsolicited takeovers and over-bids made headlines in 2025, including
offers launched by Paramount Skydance for Warner Bros. Discovery, QXO for
Beacon Roofing and Novo Nordisk for Metsera. These transactions are part of a
modest increase in hostile and unsolicited M&A activity over the prior year, both in
the U.S. and globally, in part driven by valuation fluctuations, sympathetic
shareholders looking for exit opportunities and efforts to scale or secure “crown
jewel” assets.
• Tensions between the United States and Europe over European efforts to shift ground rules for international taxation reached a head shortly before the enactment of the One Big Beautiful Bill Act. A plan to exempt U.S.-parented companies defused those tensions for the time being, but it remains to be seen whether or how the plan will be implemented and whether the truce will hold. Meanwhile, the impact of the tax
provisions of the One Big Beautiful Bill Act will also unfold as the IRS promulgates
interpretive regulations and taxpayers incorporate the new rules into their tax models. All these developments will impact M&A in the coming year.
• U.S. antitrust authorities are again open to negotiated settlements to address
competition concerns, allowing transacting parties to better tailor regulatory efforts
covenants.
• The new filing requirements under the HSR Act introduced in Q1 2025 have resulted in longer post-signing filing timelines and increased adoption of pre-signing
information gathering processes. At the same time, early termination of the HSR
waiting period has returned after being suspended since February 2021.
• Amidst the attention garnered by states like Texas and Nevada to encourage
companies to reincorporate out of Delaware, the Delaware General Assembly
amended the state’s General Corporation Law to provide boards with clarity on how
to structure certain types of conflict transactions in order to shield them from
stringent entire fairness review. The legislature also sought to clarify and limit the
types of documents that could be sought by shareholders through books and records demands.
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All in all, M&A activity fulfilled hopes at the end of 2024 for substantial growth in 2025, even as macroeconomic conditions and regulatory approaches took shape in ways that could not have been predicted. For 2026, as always, dealmakers will again need to carefully and creatively navigate market, regulatory, political and other developments. The well-prepared and well-advised will continue to outperform, in M&A and beyond. Happy hunting.
