Global M&A value tops US$2.5 trillion after first-half deals surge

[NEW YORK] The year was tipped to be a potential blockbuster in deals and the first half delivered, setting a pace that is likely to continue in the closing months of 2026.

From well-known food products to power grids and everywhere in between, chief executives, boards and the bankers that back them served up a wide variety of transactions. And that all came amid war, economic anxiety and political uncertainty.

“People have just accepted the volatility and are investing through it as opposed to waiting until it’s over,” said Tom Miles, global co-head of mergers & acquisitions (M&A) at Morgan Stanley.

Global transaction values were up around 30 per cent year on year to US$2.6 trillion in the first half, according to data compiled by Bloomberg. That puts dealmakers on course to potentially pass the record US$5 trillion haul they achieved in 2021.

They were big deals as well. Companies struck 38 deals valued at US$10 billion or more in the first half of the year, the most ever in a six month period, according to data compiled by Bloomberg. That beat the previous record, which was set in the second half of last year.

NextEra Energy’s US$67 billion announced bid for Dominion Energy would make a US energy colossus, while the proposed tie-up of AvalonBay Communities and Equity Residential, with a combined market value of over US$50 billion, would do something similar among property developers.

Then, Unilever is selling off its food division to spices and seasonings maker McCormick for about US$45 billion. 

“The bigger, more high profile, more complex stuff is a very big part of the market, which is pretty unusual,” said Charles Bouckaert, global head of M&A at JPMorgan Chase.

What’s driving all the activity

A light touch from regulators from the business-friendly Trump administration is one key to the deluge, dealmakers said. 

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“You can’t overstate how much better the regulatory environment is,” said Laura Turano, partner in the M&A group at law firm Paul Weiss Rifkind Wharton & Garrison.

“That’s really been a huge game changer in terms of the art of the possible, not just in terms of getting it done, but the timeline to get it done, and timelines really impacts people’s willingness to go on the journey to start with.” 

Second, in the age of artificial intelligence, dealmakers say there is a push for scale as advocates of the new technology argue that an epoch-level change is in the making.

“We’re seeing so much corporate activity because they’re not buying for the next five years. They’re buying for the next 40 or 50 years,” said Carsten Woehrn, co-head of M&A in Europe, the Middle East and Africa at Goldman Sachs.

Cross-border capital

Strong corporate earnings, on the back of that pervasive AI investment and fiscal stimulus, are playing their part as well, according to Daniel Mendelow, co-head of US investment banking at Evercore.

A lot of the activity was across borders, particularly into the US, where that AI, and other technological, innovation is largely developed and commercialised. It is also the biggest and wealthiest market by most measures.

“Large cross-border corporate M&A momentum is here to stay as companies are generally well-capitalised with lots of liquidity and many stocks are at an elevated level, which supports corporates to do more deals,” said Robin Rousseau, global chair of M&A for Citigroup.

Other sectors also produced deals with eye-watering valuations. In industrials, Kone Oyj is forking out 29.4 billion euros to take over TK Elevator.

In TMT, Fox Corporation announced it was shelling out about US$22 billion for Roku in an attempt to capture more of the streaming market.

Bloomberg News reported that Deutsche Telekom is discussing a potential combination with its American arm T-Mobile US, a move that would create the world’s biggest phone company and set a record for public M&As. If announced, that will add fuel to second half volumes.

Some were considered far-fetched, such as GameStop’s move on eBay. The about US$53 billion transaction, spearheaded by GameStop chief executive officer Ryan Cohen, was rejected by the board.

One of the laggards in the first half, however, was private equity.

“What we generally view as more of the bread and butter part of the market, like the regular way private equity business, is actually way down,” said JPMorgan’s Bouckaert.

That is largely because investments made earlier at high valuations and low interest rates are proving difficult to exit now.

Some deals, as always, were a bridge too far as the ambitions of a family business and price got in the way.

Those included, at least at this point, Puig Brands’ proposed combination with Estee Lauder, which would have created one of the world’s largest fragrance and skincare companies.

They also include the short-lived discussions between Jack Daniel’s whiskey maker Brown-Forman and its French counterpart Pernod Ricard about a potential combination.

“Public investors are more cautious when a company uses its balance sheet,” Morgan Stanley’s Miles said. “If you do hit a bump in the road, you want to have a fortress type balance sheet.”

The second half of the year stands to be as good or even better, dealmakers said.

“We’re going to see a real ramp-up in the places that have been quieter, like the smaller strategic stuff,” said Turano at Paul Weiss. “There’s a huge pipeline when you think about all the carve-out sales and portfolio re-balancings.” 

Some companies, at the beginning of the year, were more cautious and were trying to see how things would play out.

These firms have now seen their rivals go to market and, said Turano, “we’re to the point where it’s like ‘after we come back from the summer holidays, it’s really ‘go time’.”

To be sure, the market will have to navigate some potential headwinds and challenges over the next six months for that to happen.

“There are a few concerns on the horizon – like what happens to the economy and the election in November – but I think confidence is strong right now,” Evercore’s Mendelow said. BLOOMBERG