Coming off a rebound in M&A last year, 2026 is expected to be a robust year for M&A—both in the US and globally—with intensifying pressure to reposition for AI and other structural shifts, even as economic and geopolitical risks linger.
According to BNP Paribas’ recent report on M&A activity, the new year begins on the heels of a “great rebound” in deal value in 2025 (+68% year-on-year), led by a record number of 43 megadeals (transactions of USD10 billion or greater). These deals materialised against a backdrop of easing macro and geopolitical headwinds, AI disruption and surging investments.
Last year, strategic transactions with transformative rationale and sponsors with ample dry powder drove larger acquisitions, indicating rising confidence levels and clearer financial outlooks.
BNP Paribas experts anticipate M&A momentum will continue this year and have identified key factors that are likely to underpin transactions.
❝ Even amid macro and geopolitical uncertainty, corporates and sponsors used 2025 to actively reshape portfolios—pursuing large strategic transactions, divestitures, and take-private transactions to maximise value. We expect 2026 to be a robust year for global and US M&A as pressure intensifies to reposition for AI and other structural shifts. ❞
2026: the year of AI infrastructure and cross-sector spillover
AI is disrupting virtually all industries at once, reshaping corporate competitiveness and broadening the set of potential acquirors beyond traditional technology companies. AI enthusiasm is expected to persist in 2026 and drive investments and acquisitions to gain scale, expertise and capabilities, according to BNP Paribas experts. Despite concerns about elevated valuations, AI has spurred a race to build out next-generation capabilities and infrastructure, as evidenced by the increase in deal value in Industrials (+78% year-on-year) and Technology, Media, and Telecom (TMT) (+155% year-on-year) M&A in 2025. AI-related infrastructure spending is expected to continue in 2026.
A pipeline of potential exits and new investments for sponsors
The report notes that sponsors accounted for 40% of total US deal value last year, though they remained below the recorded levels of 2021 and 2022. Fuelled by record-high dry powder and increasing pressure to return capital to investors, 2025 buy-side deal value reached USD575 billion, an increase of 137% year-on-year.
As financial sponsors have held off on selling portfolio companies, holding periods have increased and created an attractive pipeline of potential exits heading into 2026, via strategic sales or secondary transactions; the use of continuation vehicles is expected to continue.
Sponsors’ dry powder remains at historic highs, and while they have been signalling a “risk-on” mindset in recent years, the combination of robust debt markets and declining financing costs should result in greater capital deployment in 2026.
M&A activity despite ongoing policy and geopolitical uncertainty
Between looming tariffs and geopolitical tensions, economic and policy uncertainty is anticipated to persist this year, according to BNP Paribas experts. Yet companies are navigating uncertain times with more confidence and the expectation of monetary easing, lower taxes and deal-friendly regulations, which could result in greater M&A activity.
Last year is seen as an encouraging guide: 2025 was a strong year for cross-border M&A, particularly along the transatlantic corridor, which saw 186 inbound deals (USD370 billion in deal value, +52% year-on-year) into the US and 178 outbound deals (USD287 billion, +101% year-on-year) with Europe.
A look ahead
In the near term, BNP Paribas experts believe M&A momentum is likely to continue, though uncertainty lingers on multiple fronts and presents certain risks. Should they materialise—such as in geopolitical flare-ups or unexpected shifts in policy—transaction activity may be uneven throughout the year.
With that said, the outlook remains positive overall but cautious, supported by the expectation of looser monetary policy by the US Federal Reserve and a more constructive M&A regulatory environment.
Learn more in BNP Paribas’ 2025 US M&A review & 2026 outlook report.
