Global Acquirer Trends, H1 2026: Activity levels soften as transaction values and scale hold firm

A quieter first half of 2026 by deal count masks resilient values, a rebound in North American inbound cross-border activity and an ongoing pivot towards domestic M&A across Europe.

Key trends

• Global deal volumes eased in H1 2026 to 20,355 reported transactions, down 7% on the previous period, extending a multi-quarter softening in activity.
• The value and scale of deals told a different story. Average deal value in Q2 2026 was £308m, up 11% quarter-on-quarter and 50% year-on-year, driven in part by 191 transactions of £1 billion or more in value).
• North America was the standout region, with total volumes broadly flat but inbound cross-border activity up 73% year-on-year, as global capital consolidated into the region.
• Across Continental Europe, the Nordics and UK&I, sharp falls in inbound activity were offset by resilient - and in several cases growing - domestic dealmaking, reinforcing an ongoing focus among acquirers and investor towards home-market M&A.
• Media & Technology and Industrials were the most resilient sectors, with Defence and Semiconductors among the fastest-growing pockets of activity.

A quieter M&A market in the first half of 2026 demonstrates a transactional environment that is becoming increasingly selective rather than structurally weaker. While overall deal volumes continued to soften, strategic buyers and financial sponsors remained committed to deploy capital behind high quality assets with compelling investment rationales. The result is an increasingly bifurcated market in which fewer transactions are completing, but the deals that do complete are typically larger and more competitive.

The latest Global Acquirer Trends data analysed by Arrowpoint Advisory shows global M&A volumes continued to soften through the first half of 2026. A total of 20,355 global transactions were reported in H1 2026, 7% below the second half of 2025 (21,846) and 11% down on the first half that year (22,745). On a quarterly basis, 9,145 deals were reported in Q2 2026, down quarter-on-quarter, from 11,210.

However softer volumes do not tell the whole story. The average size of global deals was £308 million in the second quarter of 2026, up from £277m from the previous quarter and £250m from the quarter before. The number of ‘megadeals’ (transactions of £1 billion or more) rose to 372 in H1 2026, a 22% increase year-on-year, with 191 recorded in Q2 2026 alone. The picture is therefore one of an increasingly selective market: fewer transactions overall, but larger, higher-conviction deals continuing to get done. This divergence between falling volumes and rising values reflects a market in which attractive businesses are still changing hands, and often at strong prices.

Private capital activity also reflected the increasingly selective nature of the current market. Buy-side activity by financial sponsors continued to soften, with reported investments falling to 2,429 in Q2 2026, down 14% on the previous quarter and 15% year on year. Exit activity weakened even more sharply, with private capital backed disposals declining 37% quarter on quarter and 24% compared with Q2 2025 to just 513 transactions. This was reflected across all regions, with investments down in Continental Europe (19%), North America (21%) and UK&I (11%). Notably only APAC saw a quarterly increase in buy side activity, at 3%.

An important nuance of 2026 so far is not simply lower activity, but a growing concentration of capital in an increasingly selective M&A market. Boards are prioritising acquisitions that accelerate long term growth, strengthen their competitive position or enhance capability around structural themes such as AI, energy transition, digital infrastructure and national security. Conversely, more discretionary transactions continued to be deferred as geopolitical uncertainty and macroeconomic volatility made conviction harder to establish.   

North America rebounds as Europe doubles-down on domestic M&A

Regional performance across the past six months has diverged markedly, with North America re-establishing itself as the centre of gravity for global M&A. Total deal volumes in the region reached 6,827 in H1 2026, up 6% on H2 2025 and broadly flat year-on-year. The story was a cross-border one, with inbound deal activity from overseas acquirers and investors surging to 2,028 deals, up 73% year-on-year and 86% on the previous half. By contrast, domestic M&A activity within North America softened, falling 16% year-on-year. This activity was not only driven by investors seeking greater scale and exposure to the AI economy, but also by the relative strength of the US corporate environment. Growing confidence in North American fundamentals have seemingly reinforced its position as the destination of choice for international acquirers and investors - or perhaps the alternative has simply looked less compelling.

APAC recorded the sharpest decline in M&A activity among the larger regions, with volumes down 18% year-on-year to 4,873. A pronounced fall in domestic activity (down around 28% year-on-year) was only partly cushioned by a 29% rise in inbound investment. However, the region did see a 42% quarter-on-quarter jump in megadeals through Q2 2026, pointing to renewed appetite for large-scale, technology-led transactions.

Across Europe a consistent pattern emerged: a retreat in cross-border activity offset by resilient intra-region dealmaking. In Continental Europe, total volumes fell 11% year-on-year to 4,414. Inbound activity collapsed 43% while domestic transactions grew 13%. UK&I was the most resilient European market, down just 4% on H2 2025 with 1,931 deals and notably the only region to record a quarter-on-quarter rise in inbound volumes in Q2 2026. It remains to be seen if the UK’s latest political upheaval impacts international investor confidence over the remainder of 2026. The Nordics (1,444) and Rest of World (866) followed the same pattern of weaker cross-border flows and steadier domestic activity. Taken together, the data points to cross-border capital increasingly concentrating in North America and APAC, while European dealmaking becomes progressively more domestically driven. Rather than signalling a retreat from M&A altogether, this increasingly reflects that European businesses are placing greater emphasis on domestic consolidation, supply chain resilience and perhaps sovereign capability, with geopolitical fragmentation and industrial policy becoming increasingly influential in shaping acquisition decisions.                           

Sector trends: resilience in technology, industrials and defence

Beyond regional divergence, the first half also highlighted how capital continues to gravitate towards businesses exposed to long term structural themes. AI is no longer simply driving activity within software. Increasingly it is influencing acquisition and investment strategies across semiconductors, digital infrastructure, industrial automation, and energy infrastructure as companies seek to capture the growth and anticipate the challenges associated with an accelerating tempo of AI adoption.

The Business Services sector remained the most active industry in the first half of 2026, with 7,561 deals, despite a 11% decline year-on-year. Media & Technology proved among the most resilient, down only 2% on H2 2025 to 5,020. Together, the two sectors accounted for well over half of all global activity. Industrials (4,155) was the next steadiest of the sectors, down only around 5-6%. Whereas Consumer M&A activity declined the most, falling 17% year-on-year to 2,182 amid weakening discretionary demand. Pharmaceutical deal activity eased 14% year-on-year to 1,405.

More significant shifts were evident at the sub-sector level. Defence was the standout riser, up 61% on H2 2025 and 16% year-on-year, with the impact of actual conflict, heightened geopolitical tension and increasing defence spending flowing through into M&A activity. Semiconductors (up 20% year-on-year) and Computer Software - the most resilient of the large technology pools - underlined the continued flow of capital towards assets that enable or benefit from AI, while activity in Pharmaceuticals held broadly flat with around 300 deals per half. By contrast, more cyclical areas, including Energy (down around 24% year-on-year), Mining and Financial Services, saw activity contract.

Outlook: conditions building for a 2027 recovery?

While the headline volume trend remains soft, several underlying dynamics point to a firmer footing ahead. Broadly stable interest rates, abundant dry powder and mounting pressure on private equity to both deploy and to return capital to investors are expected to continue to drive transactions, while corporate carve-outs of non-core assets are creating a growing pipeline of mid-market opportunities. AI continues to reshape where capital flows, both towards enablers of the AI economy and towards businesses able to demonstrate the defensibility of their market position. While some investors remain ‘risk-off’ until they gain more visibility of the impact of AI, the due diligence bar has most certainly been raised amongst the remainder who wish to deploy, the investment committees of all of which are seeking greater comfort around the AI challenge.

Geopolitics remains the principal swing factor. Conflict in the Middle East created uncertainty into the first half of the year, weighing in particular on cross-border activity. With those tensions potentially starting to recede, and with resilience already evident in values and megadeal activity, the ingredients for a more broad-based recovery appear to be falling into place. On the current trajectory, an uptick in M&A activity looks possible towards the end of 2026 and into 2027.

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