Majority of business leaders expect M&A activity to increase in 2026 - report

After years of deal drought, the M&A crowd is feeling frisky again. Fifty-two percent of global business leaders expect transaction volumes to rise this year, according to Norton Rose Fulbright and Mergermarket's latest survey — a sharp rebound from the 38% who dared hope for the same thing last year. Twenty percent of executives are betting on a significant increase. Welcome to the great M&A mood swing of 2026.

The AI Gold Rush No One Wants to Miss

Here's the plot twist the boardroom set can't stop talking about: artificial intelligence is now the leading catalyst for cross-border dealmaking. Nearly a quarter of respondents — 24% — say they're actively hunting for AI-heavy targets. Among private equity firms, that number jumps to 38%. Let me translate: if your company has a halfway credible AI story attached to its balance sheet, expect a banker to call. If you don't, expect to watch from the sidelines. The hunger for AI capabilities isn't just a Silicon Valley parlor game anymore — it's the new default justification for writing a ten-figure check.

Private Equity: Still the Loudest Drumbeat

Forty-eight percent of respondents name private equity as a top-three driver of new deals this year, neck and neck with industry consolidation (45%) and forced sales of non-core assets (37%). Meanwhile, 86% say private credit will remain a cornerstone of M&A financing for the next two years, with nearly one in five expecting those terms to loosen considerably. Translation: the leverage spigot isn't shutting off; it's just rerouting through different pipes. For sellers courting PE bids, this is both good news and a warning — the money is there, but so is the hubris that typically precedes overpriced bids.

Valuation Gaps and Other Cold Showers

Now for the friction nobody wants to discuss at the deal dinner. A full 48% of respondents admit valuation gaps remain the single biggest obstacle to closing transactions. Geopolitical uncertainty comes second at 39%, followed by financing constraints at 37%. On the regulatory front, 35% flag competition scrutiny as the primary headache, with 32% pointing to sanctions and anti-corruption compliance. The response? Deal insurance is booming — 58% expect heavier use of warranty and indemnity policies to paper over the cracks that buyers and sellers can't otherwise bridge.

Raj Karia, Norton Rose Fulbright's global corporate head, frames it neatly: disciplined, strategy-driven transactions are replacing the freewheeling mega-deals of 2021. I'd add a caveat — "disciplined" is the word dealmakers use when they want higher returns but can't admit the easy money era is over.

The bottom line for anyone sitting across from a term sheet this year: optimism is cheap, execution is not. Fifty-two percent of your peers expect more deals. The real question is how many of those deals will actually close — and at what price.