The New Rules of M&A: Lessons from 2025, Implications for 2026
As companies enter 2026, the global mergers and acquisitions environment is being reshaped by stricter capital discipline, accelerating adoption of artificial intelligence, and a renewed focus on strategy-led dealmaking rather than volume-driven growth. The sharp rebound in M&A activity during 2025 did not restart the previous cycle; it reset the rules governing how and why deals get done.
M&A Trends After the 2025 Rebound
After an extended slowdown, global M&A activity recovered decisively in 2025. Deal value rose by the mid-30 percent range year over year, while deal volumes increased more modestly. The rebound was broad-based across regions and industries, signaling a coordinated return to dealmaking rather than a narrow or sector-specific surge.
Industry estimates suggest global deal value approached $5 trillion in 2025, placing the year among the strongest on record by value. However, the recovery occurred alongside a structural shift in capital allocation. Despite higher deal values, M&A represented a smaller share of total corporate spending than in prior cycles, as companies continued to prioritize capital expenditures and research and development.
This shift raised the internal performance threshold for acquisitions and forced dealmakers to compete for capital against large-scale investments in automation, infrastructure, and technology modernization.
Technology, AI, and the New M&A Strategy
Technology-driven transactions were the primary engine of the 2025 rebound, with artificial intelligence emerging as a central strategic driver. Acquirers increasingly targeted AI-native companies, data platforms, cybersecurity assets, and software capabilities critical to long-term competitiveness.
Market data indicates that roughly 40 to 50 percent of large technology deals referenced AI as a core strategic rationale. At the same time, the use of AI tools within M&A teams more than doubled, expanding beyond deal sourcing into diligence, integration planning, and post-merger execution.
AI also introduced new risk considerations. In a growing number of cases, anticipated AI disruption materially altered views on a target’s future economics, influencing valuation assumptions and, in some instances, leading acquirers to abandon potential transactions altogether.
Megadeals and the Rise of Transformational Bets
Large transactions played an outsized role in the recovery. Deals valued above $5 billion accounted for more than 70 percent of incremental deal value during the year. Notably, many of these transactions were executed by infrequent acquirers rather than companies with long acquisition track records.
For these buyers, M&A functioned less as an incremental growth lever and more as a vehicle for strategic transformation. In a significant share of cases, transaction values exceeded 50 percent of the acquirer’s market capitalization, substantially increasing execution risk and organizational complexity.
These dynamics elevated the importance of integration readiness, governance discipline, and clarity of strategic intent. In this environment, the margin for error in large transactions narrowed considerably.
Scope vs. Scale: How M&A Strategy Is Changing
Another defining feature of 2025 was the shift toward scope-driven M&A. Approximately 60 percent of large transactions focused on expanding capabilities, entering new markets, or accessing new customer segments rather than consolidating scale or extracting near-term cost synergies.
This marked a reversal from prior years, when uncertainty favored efficiency-driven deals. The renewed emphasis on scope reflected greater confidence in revenue-led growth strategies, particularly across technology, advanced manufacturing, financial services, and consumer sectors.
For many acquirers, M&A became a mechanism to reposition long-term growth profiles rather than optimize existing cost structures.
Global M&A and Capital Allocation in a Fragmenting World
The rebound in dealmaking remained global. Transactions involving U.S. targets represented a substantial share of total deal value, while activity across Asia and Europe also strengthened. Despite ongoing geopolitical uncertainty and trade policy shifts, cross-border M&A proved resilient.
Rather than retreating from international exposure, companies increasingly relied on alternative deal structures such as joint ventures, minority investments, and strategic partnerships. These approaches allowed acquirers to maintain access to critical markets and capabilities while managing regulatory and political risk.
Despite the rebound, M&A accounted for less than 10 percent of total corporate cash deployment globally. Capital expenditures and R&D spending absorbed significantly larger shares of investment, intensifying board-level scrutiny of acquisition returns.
What the 2026 M&A Outlook Means for Executives and Investors
As the market moves into 2026, three dynamics are defining the new M&A environment:
Higher scrutiny on return on invested capital as acquisitions compete with large internal investment programs
Increased execution risk in large, transformational deals, particularly among infrequent acquirers
Greater reliance on M&A to access capabilities, technology, and innovation rather than achieve scale alone
For executives, this environment rewards strategic clarity, disciplined diligence, and operational readiness. For investors, it sharpens the distinction between companies using M&A as a deliberate value-creation tool and those making reactive or overextended bets.
M&A After the Reset
The 2025 rebound did not mark a return to indiscriminate dealmaking. Instead, it signaled the emergence of a more selective, strategy-driven M&A cycle shaped by capital constraints, technological disruption, and global realignment.
In 2026, successful acquirers will be those that treat M&A as a precision instrument—closely aligned with strategy, executed with rigor, and measured against a higher and more disciplined standard for value creation.
