Q: The US is driving an extraordinary spike in value in the M&A market. In your recent Bloomberg Deals interview, you noted that this comes from urgency rather than opportunism. Can you expand on that?
A: Megadeals continue to dominate the market. Values are tremendous, even if volumes are less impressive. Companies are feeling the pressure to gain strategic scale. Corporates recognize the opportunity cost of inaction: If they do not build now, they are likely to be left behind, and that drives a real sense of urgency. But this is not just about size; it’s about strategically adding the pieces needed to compete in an innovation-led market. M&A was once seen by boards as a risk factor. Today, M&A is being used to address other known risks.
Companies seeking to acquire AI and technology know they can buy it faster than they can build it, making technology the largest strategic sector in 2026. If they don’t buy it, someone else will. In that scenario, overpaying is the lesser of two evils.
However, urgency does not equal recklessness. Buyers are being very selective. The market is awash in AI companies, but few are truly tried and tested. Buyers are spending significant amounts of time wrestling with that challenge. Then, once they find the right target, they go big.
Q: Is this megadeal spree only a phenomenon within the US?
A: The US is certainly where capital is flowing, but US buyers are not constrained by borders. The large strategic bets US buyers are making at home are also happening overseas. If they identify an overseas asset that is strategically important, dealmakers are writing sizeable checks. They’re not limited by bargain-hunting or simply taking advantage of distressed situations outside of the US. It’s all part of the same thesis: targeting specific assets that support their strategic plan and paying premium prices for them.
Q: What key differentiators are helping dealmakers pull off the kinds of transformational deals we’re talking about?
A: It’s all about preparation, and there are four sides to that. First, they need a clear rationale. Companies must know who they are today and who they want to be. That also means knowing what pieces are missing. They need to work with their C-suite, board and advisors to future-proof the business, whether that’s through divestitures, acquisitions, structured recaps, dividends or share buybacks. They have to analyze the whole path and prepare for what the business will look like in three, five or ten years.
Second is the target list. This needs to be a living, constantly updated document that assesses the market, analyzes supply chains and examines everything that touches the business. The world changes every three days, if not every three minutes. The pace of change is so fast that targets must be monitored constantly.
Third is financing. Corporates have access to significant amounts of capital, but the financing markets are obviously critical. Having strong, well-maintained banker relationships is essential. And both sides—corporate and the bank advisors—must be running their models relentlessly and looking around the corner.
The final pillar is regulatory: building relationships with regulators before businesses need them. Whether that’s through lobbying efforts or networking, in our unpredictable regulatory environment, companies must maintain those relationships and keep them warm. You want to be known to the regulators—in a positive way—before you need them.
C-suites engaged across those four elements will be able to move very quickly. And, they’re the ones sellers will prefer because they can move quickly, minimizing the risk to closing.
Q: You’ve noted that strategic buyers are currently well ahead of private equity sponsors in getting these transformational deals over the line. Will this dynamic continue?
A: Strategics are moving faster because they must, driven by the pace of change we’ve been discussing. Their calculus is fundamentally different from sponsors’, which is governed by return multiples and hold periods. We can expect strategics to remain dominant.
PE is also holding numerous assets it needs to shed, and that exit overhang is making for a tough fundraising environment. They haven’t been returning as much capital as their investors would like. At some point they’ll have to divest those assets. That will increase volumes, but it’s unlikely to shift the megadeal market significantly.
Q: With strategics in the dealmaking drivers’ seat, what advice would you give to boards in the current M&A environment?
A: If companies are seeking an acquisition in a completely new sector, such as a non-tech business exploring an AI target, they may consider a minority investment. It lets buyers look under the hood and test the thesis with a smaller cash outlay.
However, those tend to be challenging deals due to control issues: Who is actually in charge? How much control do we really want for our minority stake? How much access do we have?
Joint ventures or minority investment shareholder arrangements can be incredibly complicated and difficult to administer. But if acquirers take that into account and can handle that complexity, JVs or minority stakes can be a useful way to enter a new area.
Boards need to think through all the alternatives. I call it a “three-legged stool” approach: looking at M&A, capital markets and debt together, and asking what delivers the best outcome for shareholders.
Q: We’ve been focused on the megadeals. Where does this leave the middle market?
A: On both the PE and strategic sides, it’s the bigger players with broad access to capital that are doing transformative deals. The smaller end of the mid-size and mid-cap market is genuinely struggling to execute, and it comes down to three things.
First, financing has become more expensive and less available; smaller issuers simply have less leverage capacity than they did a year ago. That means that a bigger share of any deal must be funded with equity, which is the expensive piece of the capital stack. Second, this has widened the gap between what sellers think their businesses are worth and what buyers can justify paying, and mid-cap boards don't have the balance sheet cushion to bridge that gap the way a mega-cap acquirer can.
Third, and this is the piece I keep coming back to, it's genuinely hard for a mid-cap board to conclude that a transformative acquisition is the better use of capital than simply returning it through a share buyback. That is a judgment call, and often a defensible one, but mega-cap boards rarely face it—more frequently, they can pursue both at once.
But hesitation is exactly what invites the activist conversation. A board that can't articulate why it chose scale over a buyback, or vice versa, is a target. Activists move quickly into that ambiguity, and once they're in, the board loses control of its own timeline and is forced into action on someone else's terms.
Q: Where do you see the US deal market heading in the coming months? Could a Democratic sweep in November’s midterms change things?
A: We will continue to see a busy market. Boards are still feeling the pressure to transact. We’ll also see several deals—not just M&A deals—at the intersection of tech, energy and infrastructure, because AI and tech more broadly have a voracious appetite for infrastructure. These deals involve power, and power requires capital. A wide variety of companies are part of this interconnected space. In terms of the political environment, the midterms are unlikely to have much of an impact, whether or not there is a swing.
Most of us in the deal ecosystem see the fundamentals of a healthy M&A market—companies’ strategic thesis, pressure to transact, regulatory backdrop and access to capital—remaining broadly unchanged, in which case we can expect current trends to continue to dominate. My prediction: Transformational dealmaking will continue for the remainder of 2026 and well into 2027.
