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Global M&A stays strong in 2026 despite tightest capital squeeze in 30 years

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A Goldman Sachs logo is displayed on the floor of the New York Stock Exchange in New York City, on Wednesday, August 11, 2010.

Ramin Talaie | Corbis Historical | Getty Images

The global mergers and acquisitions boom that defined 2025 is carrying into 2026, as companies reassess their portfolios and artificial intelligence-led demand fuels large-scale transactions. However, a tightening capital pool is forcing executives to be more selective than ever.

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Despite a sluggish start as Trump’s sweeping tariffs early last year briefly scuttled acquisitions and new public listings, the total value of deal-making activity surged 40% to $4.9 trillion in 2025, according to Bain & Company’s annual M&A report.

That marked the second-highest level on record, trailing only the $5.6 trillion peak in 2021, when low borrowing costs and buoyant equity markets propelled a historic dealmaking frenzy.

Dealmaking activity last year rebounded as central banks cut interest rates, valuations improved and companies increased spending on artificial intelligence.

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Markets are betting that the surge will continue, as Wall Street regains its appetite for large deals amid the prospect of lower borrowing costs.

A Bain survey of 300 M&A executives found that 80% expect to sustain or increase deal activity this year, citing improved macroeconomic conditions and a growing backlog of private equity and venture capital assets awaiting exit.

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As abrupt shifts in trade policies settled into a pattern of less threatening change, relief turned into confidence and then a fear of missing out.

Jake Henry

Global co-leader, McKinsey’s M&A Practice.

Goldman Sachs, drawing on its own poll of 600 corporate and financial sponsor clients, found that 57% believe scale and strategic growth will be the primary driver of deal decisions this year.

“As abrupt shifts in trade policies settled into a pattern of less threatening change, relief turned into confidence and then a fear of missing out,” said Jake Henry, global coleader of McKinsey’s M&A Practice.

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Central to the shift is a decisive push by companies to reassess their portfolios, as geopolitical risks, economic fragmentation and uneven global growth force boards to reconsider where they operate and the risks they are willing to take.

“Leaders across industries recognize that many traditional business models have reached the limits of their historical growth engines,” said Suzanne Kumar, executive vice president of Bain’s global M&A and divestiture practice.

“Companies urgently need to reinvent themselves to get out ahead of the big forces of technology disruption, a post-globalization economy, and shifting profit pools,” Kumar added.

Goldman Sachs Int'l Co-CEO: Volatility is new normal, clients are used to it

Goldman topped the global M&A ranking last year, advising on nearly 40 deals worth $1.48 trillion in total volume. It marked the strongest period for mega-deals by volume, according to Reuters, citing LSEG records dating back to 1980.

Still, companies remain cautious. Boston Consulting Group’s M&A sentiment index rebounded to 75 from its low in late 2022 — but still remained well below the long-term average of 100, reflecting “an improving but cautious stance.” A higher value than the prior month indicates that M&A market momentum is accelerating, while a lower value suggests a deceleration.

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Tightest funding squeeze in decades

While the appetite for deals remains strong, the pool of discretionary capital to fund them is historically thin, forcing executives to pursue only transactions that deliver clear returns.

The proportion of capital allocated to M&A hit a 30-year low in 2025, according to Bain, as companies directed more cash towards dividends, buybacks, capital expenditures as well as research and development.

“Executives must pressure test whether M&A pathways and specific deals will help the company better compete in the most attractive markets … rethink portfolio boundaries, and make bigger, bolder decisions about what capabilities they must own vs. access,” said Kumar.

2026 will be a ‘very good year’ for M&A, says Citizens Commercial Bank’s Mark Lehmann

AI capital expenditure ‘supercycle’

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“We expect more big deals in 2026, with continued consolidation and geographic expansion,” Henry said, with AI-related service providers fueling “big-deal fever” this year.

However, the heavy capital spending in AI could constrain M&A activity in the near term, Brian Levy, global deals industries leader at PwC, said.

As AI adoption accelerates, demand for computing power has surged across digital infrastructure, energy, semiconductors, and hardware optimization. In response, many companies are opting to acquire rather than build across the technology stack.

Between the first quarter of 2024 and the third quarter of last year, U.S. hyperscalers’ capital expenditures averaged $760 million per day, according to Goldman Sachs.

The Wall Street bank estimates that by 2030, another 65 gigawatts of data center capacity will come online — more than double the amount added from 2019 to 2024.

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“Investment in AI is being directed towards data centres, energy, and other infrastructure as well as technology development and customisation,” Levy said.

“In the near term, the scale of this multitrillion-dollar investment may divert capital and temper M&A activity.”

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Crypto World

Arizona AG Files Charges against Kalshi over ‘Illegal Gambling‘

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Law, Arizona, Court, Crimes, Kalshi, Prediction Markets

Arizona Attorney General Kris Mayes announced that her office filed gambling and related criminal charges against the companies behind prediction markets platform Kalshi.

In a Tuesday notice, Mayes said that the charges alleged that Kalshi operated an “illegal gambling business in Arizona without a license” and offered election wagering, in violation of state laws. Arizona authorities alleged that Kalshi’s prediction markets platform allowed state residents to bet on event contracts related to sports and state and federal elections. 

“Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” said Mayes. “No company gets to decide for itself which laws to follow.”

Law, Arizona, Court, Crimes, Kalshi, Prediction Markets
Source: Arizona Attorney General’s Office

According to the AG’s office, the charges followed Kalshi filing its own lawsuit against Arizona “preemptively in an attempt to avoid accountability under Arizona law.” State authorities have filed similar lawsuits against the companies of prediction market platforms like Polymarket and Kalshi.

Related: Kalshi suffers court loss in Ohio over sports betting lawsuit

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“Sadly, a state can file criminal charges on paper-thin arguments,” a Kalshi spokesperson told Cointelegraph. “States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction. It’s different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.”

Last week, an Ohio judge denied Kalshi’s request for a preliminary injunction in a similar case against state authorities, saying that the company had failed to show that the sports event contracts available on the platform were subject to the “exclusive jurisdiction” of the Commodity Futures Trading Commission (CFTC). However, in February, a federal judge in Tennessee blocked state authorities from enforcing gambling laws against Kalshi.

CFTC chair backs “exclusive authority” over prediction markets

Now the sole commissioner on the CFTC since acting chair Caroline Pham stepped down in December, Chair Michael Selig has publicly said that the federal regulator would defend prediction market platforms from state-level lawsuits.

Last week, Selig opened a proposed rule up to public comment on how the Commodity Exchange Act would apply to prediction markets, potentially changing how the agency approaches regulation and enforcement in the future.

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