Key facts
- Morgan Stanley predicts global M&A activity will reach a record $6.4 trillion in 2026.
- This projection surpasses the deal volumes seen in 2021.
- The forecast is supported by buoyant equity markets and renewed corporate confidence.
- Announced deals increased by over 64% year-over-year in the second quarter.
- Deal completions rose by more than 33% in the second quarter.
- The current M&A environment is considered more constructive due to a lighter-touch regulatory regime.
Global mergers and acquisitions activity is on track to surpass 2021 levels, with Morgan Stanley projecting a record $6.4 trillion in deals by 2026. This surge is attributed to a combination of buoyant equity markets, renewed corporate confidence, and a more favorable regulatory environment, particularly under the Trump administration, which is perceived as having a lighter-touch approach to antitrust enforcement.
Following years of high interest rates and market volatility that sidelined executives, dealmaking has seen a significant revival. Morgan Stanley reported a substantial increase in both announced deals and completed transactions in the second quarter. The firm noted that geopolitical uncertainty is receding, encouraging companies to reshape their businesses and prompting private equity sponsors to deploy their available capital. Alternative asset managers reportedly hold approximately $4.3 trillion in funds designated for deals, with sponsor-backed M&A announcements already showing a notable increase in the second quarter.
Despite potential risks from interest rate hikes, which typically dampen acquisition activity by increasing financing costs, the current M&A wave has demonstrated resilience. Investors will look to upcoming second-quarter earnings reports from major U.S. banks for further insights into the dealmaking outlook and broader debt and equity issuance trends.