Expect M&A activity to strengthen over the next 12 months
Down 23 percentage points year over year, factors such as economic uncertainty (49%), valuation gaps (47%), and financing costs (46%) are standing in the way of substantive progress.
Full finding coming soon
02 / KEY FINDING
AI has gone from tool to target
70%
Combined responses for digital infrastructure or technology as the sectors expected to see the most deal activity*
Artificial intelligence has long been seen as a way to facilitate deals, but now the companies building it are the ones being targeted. When asked which industries they expected to see the most deal activity this year, those most impacted by AI were also the top responses, with data centers and digital infrastructure (38%) and technology (32%) leading the charge.
* Respondents could select multiple industries. The 70% figure represents the combined responses for digital infrastructure (38%) and technology (32%) and may include overlapping selections.
Full finding coming soon
03 / KEY FINDING
AI’s widening trust gap
63%
Say due diligence is where AI will add the most value
The acceleration of AI’s capabilities is far outpacing the trust that dealmakers place in the technology. While nearly 2 in 3 respondents believe due diligence is where AI will add the most value, accuracy and reliability (38%) and data privacy (23%) topped their list of risks.
Full finding coming soon
04 / KEY FINDING
The shift from “buy-side dry powder story” to “exit backlog story”
51%
Expect private equity to be the buyer group with the greatest influence on deal valuations
Private equity remains a dominant force in the M&A market, but the narrative is evolving. For much of the last decade, the story centered on dry powder and the industry’s ability to deploy capital. Today, the more pressing question may be how and when that capital gets returned.
Full finding coming soon
02 / EXECUTIVE SUMMARY
22nd Annual Mergers & Acquisitions Outlook Survey
“We’re bullish, but not naive.” “A seesaw of risk and reward.” “I’m confident in the market, but less confident in my own outlook.”
A kind of “stubborn optimism” ran through Dykema’s 2026 M&A Outlook Survey, with both opportunity and hesitation showing up in equal measures from our respondents. After 22 years of taking the pulse of dealmakers on the trends driving M&A activity, Dykema recognizes the difference between caution and outright pessimism. For now, this year reads like the former.
Read the full executive summaryFull summary page coming soon
03 / YEAR-OVER-YEAR TRENDS
The Evolution of Dealmaking
MARKET OUTLOOK
01 / 07
How will U.S. M&A activity in the next 12 months compare to the previous 12 months?
The share expecting a stronger market fell from 74% to 51%
Strengthen
2025
74%
2026
51%
Remain about the same
2025
16%
2026
40%
Weaken
2025
10%
2026
10%
Percentages may not total 100% due to rounding.
INDUSTRY OUTLOOK
02 / 07
Which sectors do you expect to see the most M&A activity over the next 12 months?
Data centers and digital infrastructure enter the list at the top
2025
Technology, Media & Telecom45%
Healthcare & Life Sciences*38%
Supply Chain & Logistics24%
Financial Services23%
Industrial & Manufacturing (tied)20%
Energy & Natural Resources (tied)20%
2026
Data Centers / Digital Infrastructure — new option38%
Technology, Media & Telecom32%
Healthcare & Life Sciences30%
Industrial & Manufacturing26%
Financial Services22%
Respondents could select more than one sector. Industrial & Manufacturing and Energy & Natural Resources differ by less than one point in 2025, within the margin of error, and are shown as tied. *In 2025, Healthcare and Life Sciences were separate answer options; the combined figure is an estimate.
EXPECTATIONS
03 / 07
How strongly do you agree with these statements about the next 12 months?
Agreement fell on all three statements, led by a 21-point drop on private equity activity
■ Strongly agree ■ Somewhat agree
Private equity activity will increase
2025
34%49%
83%
2026
21%41%
62%
Regulatory scrutiny will increase
2025
20%33%
53%
2026
14%26%
40%
Due diligence requirements will increase
2025
42%34%
76%
2026
17%48%
66%
Segment labels are rounded and may not add to the total. Total agreement is reproduced as supplied; due diligence comparison requires editorial confirmation.
OBSTACLES
04 / 07
What will be the biggest obstacles to M&A activity over the next 12 months?
Valuation concerns jumped nearly 20%
2025
General economic conditions42%
Financial market conditions32%
Tariffs30%
2026
Economic uncertainty49%
Valuation gaps — 28% in 202547%
Financing costs46%
Respondents could select more than one answer. Answer wording differed between years: General economic conditions and Economic uncertainty are treated as the same answer, as are Company valuations (2025) and Valuation gaps (2026). Financial market conditions (2025) and Financing costs (2026) are shown separately.
ACTIVITY DRIVERS
05 / 07
What will be the top drivers of M&A activity over the next 12 months?
Availability of capital overtakes the economy
2025
General economic conditions47%
Financial market conditions40%
Availability of capital (tied)31%
Availability of quality targets (tied)31%
2026
Availability of capital48%
General economic conditions35%
Aging business owners / succession planning — 11% in 202533%
Respondents could select more than one answer.
STRATEGIC PRIORITIES
06 / 07
What is your organization’s highest strategic priority for value creation over the next 12 months?
Revenue growth is now the top priority
2025
AI adoption22%
Operational efficiency21%
M&A — 12% in 202620%
2026
Revenue growth — new option37%
AI adoption20%
Operational efficiency17%
Respondents selected one answer.
DEAL INVOLVEMENT
07 / 07
Do you expect your organization to participate in any of the following during the next 12 months?
Expected involvement fell for every transaction type, led by joint ventures (−27)
Acquisition
2025
69%
2026
43%
Divestiture / Sale
2025
50%
2026
32%
Joint venture
2025
53%
2026
26%
In 2025, respondents answered yes or no for each transaction type. In 2026, respondents selected all that apply, and 44% chose none of the above. 2026 also offered minority investment (17%) and initial public offering (9%), which were not asked in 2025.
01 / 07 · Market outlook
Share of survey respondents (%) · Each bar uses a 0–100% scale · Swipe or use the arrows to explore
The M&A market has gone for quite a ride since we launched our first outlook survey two decades ago.
From the dramatic lows of 2008, to the tech-driven surge of 2015, to the post-pandemic SPAC boom, here’s a look back at the moments that transformed the landscape and impacted dealmaking for years to come.
When buyers start asking questions, targets who prepare early not only move faster, but hold up better. Organized contracts, clean entity structures, and a clear picture of how the business operates can make a real difference to timelines.
While much of the attention has focused on using AI to accelerate due diligence, buyers are increasingly examining how effectively targets have integrated AI into their operations and what that means for profitability and competitive advantage. This adds new layers of diligence around technology, data rights, governance, contractual dependencies, and associated risks. In a market where virtually every company claims to be AI-enabled, buyers will need to look past the marketing hype to determine whether those capabilities actually support the valuations sellers are demanding.
Health tech companies raising capital should expect investors and lenders to ask what happens to the business when AI changes the model. Documenting data rights, customer contracts, and HIPAA compliance before the process begins shortens diligence and strengthens the valuation conversation.
Healthcare tech deals are advancing too fast for privacy laws to keep pace with them. The first question many buyers now have is how their patient data is being used, and whether AI tools were trained on it with proper consent. Documenting those answers early shortens diligence considerably.
Financial, regulatory, and employment due diligence have all become more robust. Sellers can expect purchase price to be revisited if the quality of earnings does not match reported earnings and special indemnities for any regulatory nor employment-related issues uncovered during due diligence. Risk sharing has become the norm.
Stephen D. Sayre
Co-Leader, Mergers and Acquisitions Practice Group
While megadeals tend to dominate the headlines, some of the more compelling opportunities are emerging in the middle market. Private equity firms and independent sponsors are finding businesses with solid cash flow, opportunities for consolidation and room to create value beyond financial engineering. The emphasis is shifting toward what buyers can actually build after the acquisition, rather than relying on multiple expansion to generate returns.
The expansion of Section 1202 will have a significant impact on the Texas middle market over the next several years. With higher eligibility thresholds and the ability to qualify for partial gain exclusions after 3, 4 or 5 years, founders and investors have new considerations when deciding how to structure or restructure and eventually exit a business. We are already seeing these tax considerations play a material role in structuring businesses so that they will qualify for these tax benefits. The complexity of these decisions requires experienced practitioners who understand all of the nuances of Section 1202 to ensure the benefits are achieved.
In August and September 2026, national law firm Dykema distributed its M&A Outlook Survey via email and LinkedIn to a group of CEOs, CFOs, other senior company officers, attorneys and in-house counsel, private equity professionals, investment bankers, commercial bankers, and other professional advisors engaged in the M&A industry. Survey respondents represent a cross section of executives and M&A advisors engaged in more than a dozen sectors, including financial services, technology, media, telecoms, healthcare, industrial/manufacturing, retail, energy, real estate and construction, consumer products, education, logistics, automotive, law, insurance, food and beverage, life sciences, staffing, and cannabis. Due to rounding, percentages used in some questions may not add up to 100%.