USA TRENDS AND DEVELOPMENTS Contributed by: W. Todd Carlisle, John H. Cooper, R. Michael Murphy and David W. Drum, Dentons
A principal driver is the ongoing need for scale and cost efficiency. Banks, asset managers and insurers face margin pressures from rising regulatory compli - ance costs, increased technology investment require - ments, and competition from fintech firms, prompting acquisitions to expand distribution, reduce operating costs and diversify product offerings. Technology transformation is also reshaping deal making. Traditional financial institutions are actively acquiring fintech companies and digital platforms to build capabilities in AI and digital payments, accelerat - ing modernisation in response to changing consumer expectations. These technology-enabled acquisitions are expected to remain a key component of strategic financial services M&A throughout 2026. Private equity investors are likely to remain highly active, drawn by the predictable revenue character - istics of financial services businesses. Large pools of undeployed capital and strong interest in consolidat - ing fragmented advisory sectors – particularly wealth management and insurance distribution, where client relationships and recurring revenue models create stable cash flows – will continue to support sponsor- led activity. Health services In 2025, M&A activity in the health services sector remained relatively subdued amidst regulatory uncer - tainty and reimbursement concerns. In 2026, the authors expect both volume and value to improve, supported by stabilising interest rates, improved capi - tal availability and renewed confidence in high-quality, cash-generating assets. Strategic buyers and private equity sponsors alike are expected to favour targeted, disciplined acquisitions that capture efficiencies and scale through technology-enabled platforms. Regulatory and political risks remain a significant headwind. US antitrust authorities are expected to maintain heightened scrutiny of health services con - solidations, including physician practice roll-ups and vertically integrated payer-provider combinations, potentially dampening appetite for larger transactions and increasing execution risk.
From a provider standpoint, investor interest will con - centrate in outpatient and post-acute care, including ambulatory surgery centres, home health, hospice, behavioural health and specialty infusion services. Health services technology and software platforms will continue to attract strong interest, with AI-enabled solutions demonstrating measurable efficiency gains serving as a key driver of value. Strategic divestitures and carve-outs from health systems are also expected to generate meaningful deal flow. Overall, 2026 should bring stronger deal value and volume relative to 2025, with the market shifting from stabilisation to acceleration, supported by resilient investor appetite and a rebalancing towards smaller, strategically aligned transactions. Energy In 2025, energy M&A featured lower transaction vol - umes but higher aggregate deal values, driven by larger, strategic transactions. The authors expect 2026 deal value to strengthen modestly with stable- to-improving volumes, supported by easing inflation, stabilising interest rates and improved financing con - ditions. Activity will likely remain below prior peaks on a volume basis, with large deals and consolidation continuing to drive aggregate value. Several structural factors underpin these expecta - tions. Surging electricity demand from AI, data centres and electrification is catalysing acquisitions of genera - tion, grid and midstream assets and supporting higher valuations for scalable infrastructure. Private equity and strategic consortiums are accelerating capital deployment, particularly in assets tied to energy secu - rity, reliability and transition themes. Portfolio consoli - dation remains central in oil and gas and utilities, as companies pursue scale and high-quality resource positions amidst commodity volatility. Policy and geopolitical uncertainty, including shifting domestic energy policy and global supply risks, are constraining mid-market activity and reinforcing the shift towards larger, de-risked transactions. Overall, the authors expect a disciplined but active M&A envi - ronment in 2026, with total deal value supported by large-scale transactions and infrastructure investment while transaction counts recover gradually.
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