Post by : Saif Rahman

The global mergers and acquisitions (M&A) landscape is maintaining its dynamic momentum. Michal Katz, the head of investment and corporate banking at Mizuho Americas, believes that this trend is unlikely to wane soon. During her address at the Reuters NEXT conference in New York, she detailed the factors driving this active dealmaking atmosphere in 2025 and its anticipated continuation into 2026.

This year has witnessed a surge in substantial transactions, known as megadeals, valued over $10 billion, which have seen their total worth double compared to the previous year, hitting approximately $1.3 trillion. Noteworthy examples include an $85 billion rail acquisition, a data center deal worth $40 billion, and the record $55 billion leveraged buyout of Electronic Arts. These significant moves exemplify companies' determination to evolve and expand.

Katz highlighted that many chief executives are under pressure to grow as traditional business models are being challenged by artificial intelligence. AI is transforming operational approaches, customer engagement methods, and long-term planning. To maintain competitiveness, executives are eager to ensure their organizations are positioned for enduring changes, driving a potent “pent-up demand” for mergers and acquisitions as companies are now more prepared to act post-uncertainty.

Looking ahead, Katz anticipates not only a continuation of megadeals but also a thriving market for mid-sized transactions below $10 billion. These smaller deals are crucial as they keep private-equity firms engaged. Many of these firms are eager to offload older holdings, and the current market environment allows them to realize beneficial returns.

Another significant trend Katz pointed out is the rise of shareholder activism. In 2025, investors have been increasingly assertive, urging companies to make decisive moves, divest divisions, or pursue mergers. This demand for “event-driven exits” typically results in greater deal-making and strategic shifts.

While the tech sector has led the stock market this year, Katz noted that the healthcare space is becoming a lively arena for acquisitions. Major transactions like Pfizer's acquisition of Metsera, Abbott Labs’ purchase of Exact Sciences, and the proactive strategies of Thermo Fisher and Novartis reveal that leading players in healthcare are also gearing up for expansive growth. This evolution indicates that M&A activities are diversifying beyond a tech-centric focus.

Conversely, the private credit sector has encountered some strain. Recent bankruptcies of notable companies have sparked worries regarding lending norms. Katz referred to these instances as “idiosyncratic,” suggesting they are atypical and do not signal an overarching collapse. Nevertheless, lenders and investors are adopting a more cautious approach, demanding enhanced documentation, transparency, and more secure loan structures. This tightening may fortify the market by mitigating risky decisions.

Katz's message at the conference underscored a clear takeaway: conducive conditions in 2025—growth aspirations, AI-driven transformations, investor pressures, and private-equity dynamics—are likely to sustain a vibrant M&A market well into 2026. As businesses steer towards the future, many are laying the groundwork for long-term investments that will influence their industries profoundly.

With technology transforming global markets and companies racing to adapt, the upcoming year may usher in even more tactical maneuvers, unexpected partnerships, and groundbreaking mergers.

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