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M&A Boom Predicted for 2026: $3 Trillion in Deals Expected

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  Published in Stocks and Investing on Saturday, February 7th 2026 at 0:25 GMT by CNBC
      Locales: Massachusetts, UNITED STATES

New York, NY - February 7th, 2026 - After a period of relative dormancy, the Mergers and Acquisitions (M&A) landscape is bracing for a monumental surge, with analysts predicting 2026 could be a record-breaking year for dealmaking. Industry experts point to a confluence of factors - pent-up demand, easing interest rates, and renewed corporate optimism - as fueling the anticipated boom. Jefferies, a leading global full-service investment bank, projects a substantial increase in M&A activity, forecasting a total volume reaching $3 trillion, significantly higher than the $2.2 trillion recorded in 2023.

This projected uptick translates to an average of 1.75 deals announced per day throughout the year, a frenetic pace that hasn't been seen in years. The slowdown in M&A activity over the past few years was largely attributed to challenging macroeconomic conditions. High interest rates made financing deals considerably more expensive, while geopolitical instability and lingering effects of the pandemic created a climate of uncertainty that discouraged large-scale investments.

"The market has been waiting for this," explains Tim Isgro, a research analyst at Jefferies. "We had an environment of high rates, a lot of geopolitical uncertainty and a lot of overhang from the pandemic that put a damper on M&A activity." Now, with interest rates showing signs of stabilization and potential decline, and confidence growing as global economic conditions improve, companies are increasingly willing to pursue strategic acquisitions and mergers.

Sectoral Drivers of Growth

The anticipated M&A surge isn't expected to be concentrated in a single industry. Jefferies predicts broad-based activity across multiple key sectors. Technology remains a hotbed for consolidation and innovation-driven deals, with companies seeking to acquire disruptive technologies or expand their market share. Healthcare is also expected to see significant activity, driven by factors such as an aging population, increasing demand for specialized medical services, and the potential for synergistic combinations. Industrials, often undergoing restructuring and seeking operational efficiencies, are also poised to be active participants in the M&A market.

Beyond specific sectors, a key driver of activity will be strategic deals - acquisitions designed to bolster growth, expand into new markets, or consolidate existing market positions. Companies are recognizing that organic growth alone may not be sufficient to achieve their long-term objectives, leading them to seek out complementary businesses through M&A.

Private Equity's Role: A Mountain of 'Dry Powder'

Adding fuel to the fire is the substantial amount of "dry powder" - uninvested capital - held by private equity firms. These firms have been accumulating cash reserves, patiently waiting for attractive investment opportunities. With the M&A market poised to heat up, they are now ready to deploy that capital, seeking to acquire undervalued companies or participate in larger strategic transactions.

Bank of America in a Prime Position

While all major investment banks are expected to benefit from the M&A rebound, Jefferies analysts believe Bank of America is uniquely positioned to capture a disproportionate share of the gains. The bank recently underwent a strategic restructuring of its investment banking operations, streamlining processes and strengthening its advisory capabilities.

"We think the restructuring has put them in a position to really capitalize on the rebound in M&A," Isgro stated. This restructuring reportedly involved a renewed focus on client relationships, a more integrated approach to advisory services, and investments in technology to enhance deal execution capabilities.

Investment banking revenue is heavily reliant on deal flow. Each completed M&A transaction generates significant fees for advisory services (assisting clients with valuation, negotiation, and structuring deals), underwriting (helping companies raise capital to finance acquisitions), and other related services. A surge in M&A activity, therefore, translates directly into increased revenue and profitability for investment banks.

Looking Ahead The expectation is that 2026 will not just be a temporary spike, but the beginning of a sustained period of robust M&A activity. The factors driving the current boom - lower interest rates, improved corporate confidence, and ample capital availability - are expected to remain in place for the foreseeable future. While macroeconomic risks and geopolitical uncertainties always loom, the current outlook suggests a bright future for the M&A market and, potentially, a leading role for Bank of America in this anticipated wave of dealmaking.