Back, but selective: global and cross-border M&A

If you had to sum up the global M&A market in mid-2026 in a single phrase, it would be ‘back, but selective’. Global M&A deal volume is up roughly 58% over the past year, and the headline holds up when you look under the bonnet: deals over US$5 billion are up around 58% and deals over US$1 billion up 44% on the first four months of 2025, while EMEA has come roaring back with volumes up 81%.[1]

What’s driving this? Buoyant equity markets, genuine business confidence (at least in the US) and a friendlier regulatory tone in some key jurisdictions. Just as importantly, debt is available and the consensus is that availability (not cost) is what really moves the needle on financing. Sponsors are back too, accounting for around 40% of global volume (and up roughly 40% year on year),[2] but the momentum sits firmly with corporate buyers.

In this article we explore the themes we think matter most for those doing cross-border deals right now.

It’s a strategic M&A market

First and foremost, this is a primarily a strategic M&A market. Corporates are moving fast and decisively, unwilling to be left standing while competitors consolidate. The mood is noticeably brighter in the US than in Europe, where geopolitical noise and slower growth are keeping a lid on appetite. In contrast, private equity is still waiting for the exit door to swing open. Sponsor volumes globally are actually up more than 40%, but that is being driven overwhelmingly by take-privates (up a remarkable 198% year on year),[3] rather than by sponsors selling existing assets. And while the market often greets big, scrip-funded strategic deals with an initial sell-off, the data shows many strategic acquirers go on to outperform, provided the deal has real strategic logic and is not weighed down by leverage or integration risk.

The upshot is an increasingly ‘K-shaped’ industry. Large-cap funds with well-oiled fundraising machines keep deploying and exiting, but plenty of mid-market funds are staring down the barrel of becoming ‘zombie’ firms, unable to raise fresh capital and left sweating ageing assets. The numbers are sobering: the number of fund exits in 2025 was less than half what it was in 2021, average hold periods have stretched past six years, and 2025 was the worst year for PE fundraising since 2018, with the funds that do raise now spending an average of 27 months in market (up 44%).[4] With that backdrop, sponsors are having to get creative about liquidity, leaning on GP-stake deals, hybrid structures and continuation funds, which are now a permanent fixture of the GP toolkit, rather than a one-off fix.

Instability is the new normal

‘Instability is the new world order’ is a common phrase these days. The striking thing is how calm everyone has become about it. Geopolitical shocks are now landing so regularly that clients have largely stopped rewriting their deal plans every time one hits - risk has just been baked into the planning process. The exception is where the exposure is direct and unavoidable. India, for instance, is feeling real pain from the Middle East conflict given its heavy reliance on imported oil and gas.

When politics meets merger control

One topic keeping cross-border lawyers up at night is the politicisation of merger control, and it is a global story. The Trump administration is openly pro-deal, and with leaner agency headcount, fewer transactions are getting a hard look. But other jurisdictions are also leaning more political. Mexico has folded its competition regulator into the executive, and Europe has retooled its rules to give its own national champions a clearer run while taking a harder line on US tech.

The practical upshot is that negotiated remedies are likely to become the default way of getting deals over the line. And keep an eye on Washington’s growing appetite for taking equity stakes in companies outright, with Intel the headline example, which is a genuine break from anything we have seen before. Back in Australia, our new merger control laws allow for special notification rules to apply to designated sectors determined by the ACCC (which is currently limited to ‘major supermarkets’). So more targeted regulatory intervention could become a feature of this market too.

FDI screening is everywhere

Foreign investment screening has gone from niche to routine. New regimes continue to appear (Switzerland’s new framework kicks in on 1 January 2027), and existing ones keep widening their nets. Including in Australia, the definition of a ‘sensitive’ industry now stretches well beyond the old defence, media and telecoms trio to take in critical technology, digital infrastructure and energy. The catch is that those are precisely the sectors where the deals are happening, so more and more transactions are getting swept up in the process. If you’re interested in reading how dealmakers have kept moving through this new environment, have a look at this article by our colleagues Lizzie Knight, Peter Stirling and James Melville.

Why companies are staying private

One of the quieter structural shifts is that companies are simply staying private for longer. A business with a US$2-3 billion market cap is now considered too small to thrive in public markets, where thin research coverage, patchy liquidity and the dominance of passive money that doesn’t reach smaller cap companies all chip away at the case for listing. That makes a dual-track process a hard sell when scale is lacking.

The index-fund effect

Passive money is quietly rewriting the rules of public-company M&A. Index funds now own around 40% of the S&P 500, somewhere between 14% and 22% of the major European and Japanese indices[5] and we estimate similar amounts for the ASX100. This makes them the single biggest voting bloc at many companies. That changes the game: shareholder engagement becomes a core deal workstream, and the audience is increasingly stewardship and proxy-voting teams rather than the traditional portfolio managers. Because index funds rarely hold their own investment view, they lean heavily on proxy advisers and are focussed on governance and process - so the narrative, and the record supporting it, really matter.

Where are the deals and how are they funded?

A handful of sectors are doing more than their share of the heavy lifting: defence and ‘defensive’ assets (with strategics and prime contractors hunting right across the deal spectrum), digital infrastructure, pharmaceuticals and life sciences, and software and tech, the last of which has been turbocharged in the US. Renewables and AI-adjacent infrastructure keep pulling in long-cycle capital.

On financing, despite headwinds, private credit remains the workhorse: it accounted for around 42% of LBO financing in the first quarter of 2026, up from roughly 34% a year earlier, and while European penetration (around 32%) still trails the US (around 44%), that gap is steadily narrowing as banks retrench.[6] However, pricing discipline is creeping back in, with median takeover premia moderating and cash-only consideration on the rise, signs that buyers are being a little more hard-nosed about what they will pay.

So where does that all leave us? With a recovery that is real but distinctly uneven, shaped by regulatory divergence, a market that is tolerant of geopolitical noise, and some deep structural shifts in how capital is raised, deployed and eventually returned. For those involved in cross-border M&A, the job increasingly comes down to steering clients through a patchwork of competition, FDI and political risk.