*The following article has been partially excerpted from the latest issue of Cabot Money Club Magazine. To read the full article, subscribe to Cabot Money Club today.
This year should be a good year for merger and acquisition (M&A) activity. I’m not saying it’s going to be the next Great Merger Movement—as occurred from 1895-1904—when the first billion-dollar corporation was formed by merging Standard Oil Trust with several steel companies (in 1901). But experts are forecasting that 2026 will help continue the deal momentum that the M&A industry started in 2024.
Last year’s M&A environment was the market of big deals, boosted by private equity activity and the artificial intelligence (AI) explosion, which accounted for more than 20% of the activity.
Through the end of November 2025, there were 10,333 deals completed, valued at $1.6 trillion. The number of deals rose 45% over 2024—the second-highest number of M&A transactions on record.
Don’t get me wrong; no one is expecting a barn-burner year in 2026, due to continuing challenges, such as worry about the job market (unemployment rate inching up to 4.6% in November) and stubborn inflation (2.7% as of November), as well as tariff questions and U.S.-China trade tensions.
But there are good reasons to be optimistic, according to EY Parthenon. The research firm reported that the third quarter of 2025 saw a surge in M&A activity, continuing with the big deals. Deal volume for transactions more than $100 million in the U.S. rose 9%, while deal value climbed 36%, with projections that total transaction value will, when the dust settles, have been more than $2 trillion in 2025. Further, the firm projects that “corporate M&A deals will rise 3% in 2026, and PE volume will increase 5% in 2026.”
The reason for this rosier outlook is the strengthening of the economy, supported by three pillars:
Spending by affluent consumers continues to rise, due to “solid income growth, accumulated savings and wealth gains”; accelerating equipment purchases due to the capex super-cycle in computing, data centers and enabling infrastructure; and the growth in asset-price appreciation.
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The 4 Top Sectors for M&A in 2026
In the year ahead, most M&A experts agree, deals will likely focus on the following four sectors:
Medtech products, such as devices, software, and solutions improving health. Growth is the main driver here, with private equity a big source of funding. Medtech deals in 2025 amounted to almost $93 billion, the highest total in ten years.
Industrial manufacturing is seeing a major landscape transformation in automation, electrification, and energy transition markets. The deals are usually quite large, accounting for 52% of 2025’s transactions.
Technology deals will be mostly about artificial intelligence and all the infrastructure—data centers and chips, AI-native software, and security platforms—that are required to support that expansion. In 2025, 31% of M&A transactions were from tech, media and telecom deals.
Finance. Deal volume for financial companies fell in the third quarter year over year, but value increased 3.2%. Industry pros expect consolidation among regional banks and diversification—perhaps adding insurance and investment banking services—will drive additional deals, helped along by increasing deregulation.
To learn more about the companies that Wall Street is eyeing as potential takeover targets, the investment banks that can help you profit from M&A, and the ETFs that offer exposure to mergers and acquisitions, subscribe to Cabot Money Club. All of that (and more) is in the December issue of Cabot Money Club Magazine.
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