Download this issue: DealMakers^Q1 2026

Megadeals Lead to Sharp Surge in M&A Activity

M&A activity saw a stunning resurgence in the first quarter of 2026, with global deal value totaling a record $1.22 trillion, representing a 26% increase over the same period in 2025. This total deal value was the highest in any first quarter other than the historic peak in 2021. The total number of deals globally was down 17% from the same period last year, reflecting that deals were bigger-with 22 transactions valued at over $10 billion in the quarter, an all-time record.^[1]

Roughly 40% of the total value in the quarter was attributable to AI-related deals. There has also been a surge in cross-border M&A activity, especially in the energy sector, which increased to $454.7 billion in the quarter, up 47% from a year ago-driven primarily by efforts to acquire local production capabilities to mitigate tariff and other supply chain uncertainties.^[2]

Notably, M&A activity increased, notwithstanding significant geopolitical and economic uncertainty, with heightened interest rates. While M&A activity in 2021 was driven in large part by liquidity, with near-zero interest rates, the current surge is being driven by a focus on AI with the expectation that AI will be the core of the future global economy.

In the AI space, large companies have shifted from investments in startups to acquiring equity stakes in the largest AI players, a shift from traditional M&A, and acquiring mature infrastructure and cybersecurity companies. Also, frontier AI companies, now mature enough to offer later-stage products with demonstrated commercial uses, have been seeking safety through combinations with larger AI companies. "Acqui-hires"-the hiring of AI teams and licensing of AI intellectual property from other companies-are common, especially where antitrust issues are a concern, to ensure long-term operational survival.

Funding sources have become more diverse, with continued expansion of retail investing, but over the past two years, more than 40% of dry powder remains available.[3] During this time period, buyout firms were sellers in deals valued at $103 billion, roughly 36% lower than the same period last year.[4]

To offset this, creative strategies are being developed to meet capital investment needs for portfolio companies and to provide liquidity to investors. These include record-breaking activity in GP-led secondaries transactions, with more tailored terms such as deferred purchase price mechanisms, earn-outs and integrated debt financing. There continues to be use of continuation vehicles, as well as continuation vehicles on continuation vehicles, "CV-squared" transactions; and NAV-based financing, enabling PE funds to borrow money secured against the net asset value of their existing investment portfolio.

It remains to be seen what the full year of M&A activity will look like, however, activity in the first quarter of 2026 reflects resiliency and commitment from dealmakers to get their biggest and best deals done.

Top Five Deals Announced

Reflect strong deal activity in media, energy, technology/AI and asset management industries

1. Paramount Global / Warner Bros. Discovery - $110 Billion
A massive media consolidation announced in February to create a streaming giant that combines Paramount+ and HBO Max.

2. Devon Energy / Coterra Energy Merger - $58 Billion
One of the largest deals in the energy sector to date, announced in January, to secure shale assets in response to rising demand.

3.SpaceX / xAI - $58 Billion
The integration of advanced AI capabilities and aerospace, satellite communications and space exploration technologies signals the growing marriage between artificial intelligence and advanced technology infrastructure.

4. Engie / UK Power Networks - $14.2 Billion
The French energy giant expands its footprint across London and southeast England.

5. Nuveen / Schroders- $13.5 Billion
The acquisition will significantly increase the asset management firm's global footprint.

We also contributed to thought leadership:

and received various recognitions and accolades:

Additional Reading: Relevant Court Decisions and Regulatory Updates

Read our DealMakers series

This communication is for general information only. It is not intended, nor should it be relied upon, as legal advice. In some jurisdictions, this may be considered attorney advertising. Please refer to the firm's data policy page for further information.