USA TRENDS AND DEVELOPMENTS Contributed by: W. Todd Carlisle, John H. Cooper, R. Michael Murphy and David W. Drum, Dentons
Technology The outlook for M&A in the technology sector in 2026 is broadly positive. Technology was one of the most active sectors by deal value in 2025, and the authors expect continued momentum driven by corporate demand for scale and access to emerging technolo - gies such as artificial intelligence (AI), cloud infrastruc - ture and cybersecurity. AI and related infrastructure remains a central driver. Large technology companies and enterprise soft - ware providers are using acquisitions to accelerate AI adoption, obtain specialised talent and consolidate fragmented innovation ecosystems. Corporate buyers view acquisitions as a faster path to capability-build - ing than internal development, reinforced by competi - tive pressures to secure computing infrastructure. Private equity sponsors are expected to play a sig - nificant role. A large backlog of sponsor-owned port - folio companies – many held for more than five years – creates pressure for exits through strategic sales, recapitalisations or secondary buyouts. Substantial dry powder is likely to support continued investment in enterprise software, data analytics and digital infra - structure. Despite this favourable outlook, macroeconomic vola - tility, geopolitical tensions, and regulatory scrutiny of large and cross-border technology transactions could moderate deal pace. The authors expect deal value to remain high but concentrated in larger, strategic trans - actions among well-capitalised acquirers. Overall, the technology M&A landscape in 2026 will be defined by strategic consolidation around AI and digital infra - structure, active private equity participation, and a shift towards larger, more transformative transactions. Financial services The outlook for M&A in the financial services sector in 2026 is generally positive, supported by strong deal momentum in 2025 and structural pressures driving consolidation across banking, asset manage - ment, insurance and fintech. Global financial services M&A value increased by approximately 25% in 2025, although deal volume rose only modestly, reflecting a shift towards larger transactions.
had a material impact as manufacturers sought to address supply chain disruptions. M&A Activity in 2026: A Year of Uncertainty The material impact of the conflict in Iran on the energy markets, in particular, has created a unique set of specific considerations for transaction advisers evaluating potential transactions in 2026. Volatility in energy prices impacts both valuations and transaction structures across multiple sectors and threatens to negatively impact consumer spending. The possibil - ity of a prolonged conflict in the Middle East could result in lower corporate profits and a resulting nega - tive impact on valuations, even in sectors where stra - tegic and private equity buyers retain an appetite for acquisitions. Uncertainty in valuations also increases the likelihood that contingent payment mechanisms will be more of a factor as deal makers seek to mitigate risks and bridge valuation gaps. Negotiation of earnouts and price adjustment mechanisms creates added com - plexity in transactions, especially when combined with material adverse change provisions, termination rights and other mechanisms that buyers utilise to address the added risks arising from the monetary policy and geopolitical risks in the current environment. There also remains the possibility that the increased level of volatility will adversely affect deal flow in certain sectors. As in 2025, the authors remain of the opinion that deal makers willing to sort through the risks and the eco - nomic data in a highly selective manner will continue to be rewarded, especially where they demonstrate a willingness to allow sellers to share in the upside created by lower levels of actual risk and greater- than-anticipated operating profits. Scenario planning remains complex in the present environment due to the rapidly evolving policy dynamics. The prospect of gradual conflict resolution in the second quarter of 2026 creates the possibility that the second half of 2026 will give rise to an improved M&A market driven by a resilient level of profits among strategic acquir - ers and the appetite for liquidity in the private equity context.
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