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M&A Slows Below $1 Trillion for First Time in Over a Year
2 Oct
Summary
- Third-quarter M&A activity fell 41% to $993 billion.
- High interest rates and energy costs are impacting deal valuations.
- Asia Pacific M&A saw an 8% increase in the third quarter.
Mergers and acquisitions activity experienced a significant downturn in the third quarter of 2026, totaling $993 billion. This marks the first quarter to fall below $1 trillion since the second quarter of 2025, representing a 41% decrease compared to the second quarter.
Rising energy costs have fueled inflation, contributing to higher interest rates, with the benchmark 10-year US Treasury yield reaching its highest level since 2002. This challenging financial environment has made deal valuations more difficult, though some experts believe the overall impact is yet to be fully quantified.
Despite the overall slowdown, global M&A has increased by 28% year-to-date to $3.9 trillion, driven by substantial investments in technology, particularly in artificial intelligence. Asia Pacific M&A bucked the trend, rising 8% from the previous quarter to $242 billion.
Cross-border dealmaking remains robust, up 32% year-to-date, with US companies showing increased interest in European acquisitions due to a strong dollar. New listings, especially in the tech sector, have provided companies with capital for acquisitions, as seen with SpaceX's acquisition of Cursor post-IPO.
