A more confident market, but not a surge
After two years of subdued activity, 2026 is shaping up as a steadier year for deals. For example: globally, M&A volumes in the first half of 2025 fell by 9 % compared with the same period in 2024, while deal values rose by 15 %. In Europe, deal volume in H1 2025 dropped by approximately 11 % year-on-year, yet aggregate transaction value rose by 3.6 %.
This creates a more confident environment but not an unrestricted boom. Deal-makers remain selective, disciplined on valuation and focused on certainty.
Middle-market strength over mega-deals
Statistics show that while overall volumes are down, value in large deals is holding. In one report, the number of deals valued over US$10 b in H1 2025 rose by 12 % year-on-year, and deals in the US$1 b-to-US$10 b segment rose by 30 %.
The middle market is expected to take a larger share of transactions, where pricing is more rational and regulatory pressures are lighter. For sellers, this means well-prepared mid-sized businesses are likely to attract strong interest, especially where growth or consolidation stories are clear.
Financing conditions gradually improving
Financing remains available, particularly through private credit, which continues to step into areas where traditional lenders have pulled back. In Europe, according to our 2026 outlook, 67 % of respondents expected use of alternative deal structures (such as convertibles or earn-outs) in the next 12 months.
Rate stability and improving confidence are helping deals move forward, although lenders prioritise execution certainty over aggressive leverage.
Valuation discipline remains high
Valuations are unlikely to inflate without operational rationale to support them. From a global perspective, average deal value for deals over US$25 m rose 12 % in 2024 compared with 2023 (to ~US$3.4 trillion).
In the H1 2025 data, global deal values rose ~15% while volumes fell ~9%. This suggests buyers are choosing fewer, but larger or more strategically-compelling deals. For sellers, preparation is vital: strong financials, governance and clarity around future performance will heavily influence outcomes.
Sector themes shaping activity
Several sectors look especially active for 2026:
- Technology, media and telecom (TMT): In 2024, TMT deals grew by ~34 % year-on-year in Europe.
- Healthcare and life sciences: While overall activity in the sector has been challenged, the appetite remains high for platform plays and scalable models.
- Business and professional services: Particularly in small- and mid-cap transactions, dealmakers view asset-light recurring revenue models as attractive.
Capital-intensive or heavily cyclical sectors remain more cautious, although strategic carve-outs or distressed opportunities may present value.
Cross-border deals face added complexity
Cross-border activity is set to increase, but complexity is rising. Among European deal-makers, 78 % expect financing conditions to worsen over the next 12 months and 51 % of corporate respondents do not expect to undertake any cross-border M&A.
For UK targets and acquirers, reliance on private credit and flexibility around structure will be key.
Leadership and integration at the centre of value creation
Acquirers are placing far more weight on leadership capability, organisational readiness and cultural alignment. One study showed large deals’ multiple uplift has narrowed significantly — for example, median global multiples declined to ~10.8× EBITDA in Q2 2025, down ~14% from their peak in late 2024.
This reflects investor caution – paying for growth is only attractive when backed by credible execution. For sellers, demonstrating a strong leadership succession bench and a clear post-deal growth roadmap can meaningfully increase buyer confidence.
Preparation becomes the differentiator
The most successful deals in 2026 are likely to be those where preparation has been front-loaded. For example, 85 % of survey respondents expect to engage in M&A in the next 12 months.
For owners exploring a sale, focus should be on clean financials, a clear value story, scalable processes and aligned management. For acquirers, clarity on integration, technology compatibility and talent risks will be key to avoiding post-completion drift.
Outlook for the year
2026 is not going to be about chasing volume. It will be about clarity, preparation and choosing the right opportunities. The fundamentals support a healthier year for M&A, but the market will reward organisations that are disciplined, well-prepared and ready to execute with confidence.
