United States – Resilience, realignment and acceleration

The US M&A market in 2025 reflected a tale of two realities. At the top end, mega-deals roared back, driven by strategic imperatives and ample liquidity. At the same time, the middle market continued to face headwinds from persistent macroeconomic uncertainty, tight financing conditions and evolving geopolitical dynamics. As we look ahead in 2026, we see a market preparing for a meaningful uptick in activity — though one still shaped by regulatory friction, valuation gaps, and the disruptive potential of emerging technologies such as artificial intelligence.

Yet this newfound momentum occurred amid profound geopolitical uncertainty. Conflicts in key regions, volatile global trade relations and heightened national-security sensitivities added friction to cross-border dealmaking. Nevertheless, buyers at the upper end of the market proved willing to transact — often with a long-term strategic lens — even as geopolitical instability complicated execution.

Middle-market deal activity remains mixed

By contrast, the middle market continued to feel the drag of elevated borrowing costs and inconsistent lending appetites. While the Federal Reserve signaled incremental easing, interest rates remained meaningfully above pre-2022 levels throughout the year, limiting leverage availability and depressing valuations. These financing constraints, coupled with rapidly shifting tariff frameworks and supply-chain uncertainties, widened valuation gaps between buyers and sellers and pushed many participants into “wait-and-see” mode.

Still, activity was not uniformly subdued. Technology, digital infrastructure and renewable energy continued to see strong strategic and sponsor interest, reflecting long-term secular growth trends. Meanwhile, traditional consumer sectors such as retail saw more restructuring-driven transactions as companies repositioned themselves in response to cost pressures and shifting consumption patterns.

AI as a market-level wildcard

Layered on top of economic uncertainty has been the accelerating emergence of artificial intelligence. Many investors — particularly in tech-heavy verticals — spent 2025 reassessing how AI will reshape business models, cost structures and competitive moats. This introspection delayed some investment decisions as buyers attempted to underwrite future earnings trajectories in sectors most vulnerable to AI-driven disruption.

Regulatory scrutiny continues to define timelines

Regulatory scrutiny remained a defining feature of US dealmaking. Antitrust agencies continued to pursue expansive theories of competitive harm, and foreign investment reviews remained active across transactions involving sensitive data, critical technology and national-security-adjacent assets. Remedies have increasingly re-emerged as a viable path to clearance, but the practical effect has been prolonged timelines and higher execution risk-factors that will influence negotiation strategies and deal planning well into 2026.

Private equity searches for liquidity solutions

Private equity activity remained patchy in 2025, particularly in the middle market (as described above). Many funds were preoccupied with struggling portfolio companies acquired at peak-cycle valuations between late 2020 and early 2022. Elongated hold periods and constrained exit opportunities pushed sponsors to seek alternative liquidity solutions, including continuation funds, minority stake sales, recapitalizations and carve-outs of non-core assets. Although these tools provided interim relief, pressure continues to mount for broader disposition activity to resume so that funds can return capital to investors and accelerate fundraising momentum.

Looking ahead: Key themes for 2026