The M&A market roared in the second half of 2025, after early-year sluggishness brought on by tariff concerns gave way to a buying binge that drove annual deal value to its second-highest total on record.
The aggregate global value of strategic deals worth $1 billion or more shot up 40% over 2024, to an estimated $4.9 trillion, according to an analysis by Bain & Co., based on data from Dealogic.
Megadeals valued at $5 billion fueled the surge, representing 73% of the deal-value growth. Also reflecting the trend toward larger deals was the comparatively low 7% increase in the number of strategic deals worth $1 billion or more, to a total of about 7,700.
The rebound was broad-based across industries and geographies, with deal value growing by double digits in all of them.
The wave may not have crested, according to Bain’s report. The firm surveyed 300-plus M&A executives, 80% of whom said they expect to sustain or increase deal activity in 2026.
“The ingredients are in place: Improving macro conditions, a growing backlog of private equity and venture capital assets ready for exit, and a widespread recognition that many traditional business models … have reached the limits of their historical growth engines,” Bain wrote.
Much of last year’s deal activity was a reaction to what Bain called “three powerful forces”: technology disruption, post-globalization and shifting profit pools, which presented many companies with an urgent need to reboot strategy.
This year, these forces will push companies from awareness to action, the report suggested, as they shift to “proactively reshaping strategy and portfolios around them.”
“Leaders will revisit foundational strategic assumptions, rethink portfolio boundaries, and make bigger, bolder decisions about what capabilities they must own vs. access. M&A will play a substantial role in this reinvention,” said Bain.
Ironically, one of the biggest hurdles for dealmakers in the current environment is that capital allocations to M&A hit a 30-year low through the third quarter of 2025, as more cash flowed to dividends, buybacks, capex and R&D. Additionally, interest rates remain fairly high.
Here is a look at how the three great forces Bain identified are expected to spur M&A in 2026.
1. Technology disruption: About half of all technology deals already have an AI component, the report noted, calling it “a trend that will accelerate as industry players pursue assets for AI talent and technology.” Deals designed to acquire technology will also flourish in industries outside of the tech sector, such as machinery and equipment.
2. Post-globalization: Companies will make moves to double down on some parts of their global footprint and minimize exposure to others, according to Bain. M&A and divestitures will be critical tools to rapidly execute that realignment. Driving the shift will be growing constraints around the global movement of products, capital and people.
3. Shifting profit pools: “Industry evolution is an evergreen pressure on portfolio strategy,” Bain wrote. “One example is how direct access to consumers via streaming and social media disintermediates traditional players and spurs M&A.”
