Global M&A in 2026: Strategic deals, selective capital, and the new execution premium

At the half-way point of 2026, there’s reason to be cautiously optimistic about global M&A. The market is far more active than it was, with capital availability and a range of buyers ready to make a move, but the buying environment has significantly changed. The keywords to bear in mind now are strategy and selectivity. Buyers don't seem to be chasing volume at all, but are looking more closely at assets that have both strategic relevance and a credible path to value creation.

Mid-market CEOs, CFOs, business owners, and private equity portfolio leaders should be buoyed by this rebound but aware of the new look. They shouldn't expect the current market to simply return to the deal-making environment of earlier cycles, as the market appears to have divided. 

Premium assets with strong positioning, defensible margins, reliable forecasts, digital maturity, and clear execution plans will remain attractive. But average assets could instead face longer processes, valuation pressures, greater due diligence, and more conditional deal structures.

Reuters reported that global M&A exceeded US$1.2 trillion in the first quarter of 2026, with total value up 26% year-on-year. At the same time, the number of deals fell by 17%, suggesting that the market isn't generating more transactions everywhere but is surfacing larger, more strategic, and higher-conviction transactions.

A market of fewer, larger, and higher-conviction deals

In 2026, more capital is available, but there's a shortage of assets that meet high buying standards. This has led to a two-market scenario, with a top-heavy recovery and stalled mid-market activity, as well as a more selective deal environment.

Companies in the US$100 million to US$1 billion range could benefit as financing conditions stabilise and private equity firms return to deployment. But recovery here could still be selective rather than automatic. Fifty-eight percent of executives in the Citizens Financial survey expect M&A volume to rise in 2026, with a material strengthening of private equity confidence through the last half of 2025. 

For mid-market businesses, positioning now matters more than perfect timing. Those companies that can demonstrate strategic fit, quality of earnings, customer resilience, management depth, and a credible growth plan should readily attract competitive tension. On the other hand, a business that comes to the table with weak data, unresolved operational issues, or an unclear equity story may not attract any acceptable offers at all. 

To get ready for this type of environment, sellers should prepare well in advance by tightening their forecasts, documenting their growth assumptions, resolving any working capital issues, and stress testing their case from a buyer’s perspective.

AI is now a deal strategy, not a sector theme

Until quite recently, AI was a specialist technology theme in this arena, but it’s now a central driver of the actual deal strategy across sectors. Buyers are looking for companies that have a good grasp of AI, data, and automation and can use it to improve productivity, margins, customer insights, scalability, and risk management. And this means that businesses with strong data ecosystems, proprietary workflows, specialist talent, or exposure to AI infrastructure are garnering more attention.

Buyers are now viewing the likes of data centres, energy, power, software, utilities, specialist services, pharma, and healthcare through an AI-readiness lens. Much of the first-quarter mega-deal activity centred around AI and big tech, and four out of the six biggest transactions revolved around companies that experts see as winners in the AI race.

There’s an even bigger focus on infrastructure, especially data centre deal-making, which reached a record level in 2025. S&P Global Market Intelligence data shows more than 100 transactions, adding up to almost US$61 billion through November of last year, linked to demand for computing infrastructure around AI adoption.

Mid-market companies ignore or delay AI adoption at their peril, and levels of readiness could become a binary differentiator. Some assets may now move into the “must-have” category if they’re ready to go and clearly aligned. But if there’s a problem with data, systems, talent, or operating models, and a linked risk to future growth, those prospects could slide into the category of “no bid.” 

To be as best prepared as possible, leadership teams should get answers to these practical questions: 

1. Is our company's data reliable, governed, and commercially useful?

2. Can I improve our service delivery, sales, conversions, margin, or productivity?

3. Does our management and team understand both digital risk and digital opportunity?

4. Do we have a realistic roadmap or only aspiration?

Crucially, AI capability is no longer optional, and sellers must understand that it can influence diligence, valuation, buyer appetite, and the entire credibility of any growth story. 

Portfolio reshaping and carve-outs are creating opportunities

One of the biggest defining features of 2026 is corporate portfolio reshaping. This requires groups to reassess the importance of their assets, understand which divisions may perform better under different ownership, and determine where capital is tied up. Reshaping can create opportunities through carve-outs, divestitures, spin-offs, or strategic repositioning, with some of the best opportunities arising from corporate restructuring instead of traditional founder-led sales processes. 

Buyers may find that a carved-out division with established customers, experienced teams, and lots of potential is attractive, even though transactions are more complicated than the ordinary shares or sales approach. And carve-outs need careful planning built around: 

• Transition and service agreements

• Standalone financial information

• Supply chain continuity

• Separation of systems, people, and contracts

Sellers should be aware that value can leak during diligence if they haven't properly prepared the asset. And buyers need to know exactly what's on sale, what stays behind with the parent, and how the business could operate independently. Given our strong expertise in this field, our Transactions Advisory support could materially improve outcomes. 

Execution capability is now a competitive advantage

In today’s environment, buyers want to know whether an organisation can deliver after a deal goes through. Execution risk can no longer be a post-deal issue, which means there will be greater scrutiny of everything from operational resilience and forecast reliability to technology integration, cyber risk, and working capital assumptions.

Companies that can show they’re ready for integration should therefore be easier to transact, as buyers are likely to favour opportunities where the road from signing to value creation is visible. Buyers should build integration plans before completion, not after it, and sellers should prepare the evidence to support their value story. The strongest assets in 2026 won’t be just attractive but ready to execute from day one. 

The mid-market is bifurcated: pressure and opportunity

In the mid-market, there are both improved conditions and continued uncertainty. Private equity exit pressure, stabilising rates, and significant dry powder should support deals. But at the same time, buyers are aware of geopolitical risks, tariffs, supply chain volatility, and valuation gaps. 

Areas like tech, software, AI, infrastructure, pharma, healthcare, financial services, and asset-light business services may grow more effectively if they also show resilience. But retail consumer and industrial businesses with complicated supply chains or high input cost exposure could face additional challenges. 

Management teams should never wait passively for the market to improve but act proactively. This means focusing on AI and digital readiness, quality of earnings and forecast credibility, customer concentration and retention, operational scalability, margin resilience, and cross-border growth potential.

Regional outlook is active but uneven

The most liquid and strategically important market is undoubtedly the Americas, led by the US. There's also good cross-border activity, with cross-border M&A rising 47% year-over-year in the first quarter, to US$454.7 billion. The US accounted for 52.4% of cross-border transactional value.

In Europe, the situation is cautiously positive, with large strategic deals starting to turn. European buyers are increasingly looking to the US for market action, growth, and platform acquisitions, but macroeconomic uncertainty and geopolitical exposure also create stop-start deal cycles.

In the Asia-Pacific region, the outlook is more mixed. Reuters says that Asia-Pacific deal making (apart from Central Asia) fell 32% in the first quarter. Japan remains a particular area of interest, with deal making up around 16% in the first quarter, supported by private capital, corporate reform, and portfolio simplification. 

China remains more complicated for cross-border transactions, especially if data, regulation, technology, or national security issues come into the frame. Southeast Asia and India are growing but with elevated volatility, showing selective opportunities within infrastructure and financial services.

Preparedness will define the rest of 2026

As 2026 unfolds, several themes are likely to continue, such as: 

• AI-led investment

• Portfolio reshaping

• Carve-outs

• Cross-border expansion

• Large strategic deals

But it's still unclear how financial conditions, trade policies, and geopolitical risk factor into the equation, as well as the pace of private equity deployment. 

For business leaders, the central message is clear in that M&A in 2026 doesn't come down to capital availability but centres around quality execution and preparedness. So, those considering an acquisition, sale, carve-out, or international expansion must prepare diligently before they begin the process. 

For help in these areas, business leaders should speak with our experts. HLB helps mid-market and international businesses simplify complex tax structures, plan transactions, and execute cross-border deals. We firmly believe that the best prepared businesses in such a selective market will be a great deal more attractive to careful buyers. 

In 2026, M&A is not constrained by capital but by preparedness, quality, and execution. To prepare as diligently as possible and stand the best chance of success, get in touch for more information.