- Global M&A in 2025 reached roughly $4.5–4.8T, powered by a surge in $10B+ mega-deals and improving financing and sentiment.
- Rio Tinto and Glencore revived talks on a $260B all-share merger, with banks jockeying for roles and a Feb. 5 UK takeover deadline.
- A high-stakes media auction for parts or all of Warner Bros. Discovery pits Netflix’s ~$82.7B EV proposal against a ~$108.4B all-cash Paramount Skydance bid under heavy regulatory and shareholder scrutiny.
- Advisers expect deal momentum to carry into 2026 as private equity deploys ~$2T+ of dry powder, though antitrust and execution risks are rising.
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The M&A landscape as of early 2026 reflects a continuation—and intensification—of trends that produced a near-record level of dealmaking in 2025. Key sectors, deal types, and dynamics indicate where risks and opportunities lie.
1. Mega-deals and scale as strategic imperatives. 2025 saw approximately 68–70 mega-deals worth $10 billion or more, contributing heavily to global deal volume (>$4.5 trillion) and pushing investment banking fee pools to record highs (≈$135 billion). Acquirers are seeking scale to compete globally, protect margins, and invest in technology platforms—tech, AI, and industrials have been major contributors. Banks are being rewarded handsomely, though the risk is elevated if deals fail (e.g., advisory missteps, antitrust intervention).
2. Strategic consolidation in mining and natural resources. Rio Tinto and Glencore considering an all-share merger signals a response to global supply stresses—especially for copper—as analysts forecast a supply shortfall and prices are at record highs (~$13,300/tonne). The pure equity structure underscores a desire to reduce leverage risk and gain breadth in production portfolios.
3. Media/entertainment bidding wars & regulatory risk intensify. The contest between Netflix and Paramount Skydance over Warner Bros. Discovery represents big money, complex legal structuring, and antitrust red flags. The offers—$82.7–108.4 billion enterprise value—are heavily scrutinized by shareholders and regulators. Paramount’s all-cash bid and backing by private and sovereign capital may offer tighter certainty; Netflix’s deal, while complex, holds commitments like theatrical windows and media expert scrutiny.
4. Private equity & capital markets resurgence. PE firms have more than $2 trillion in unallocated capital, and sponsors are increasingly active—PE-led deals rose ~40–50% across financial sponsor-led transactions and tech/industrial sectors. Equally, equity underwriting is picking up again, likely driven by lower expected interest rates and easing inflation expectations.
5. Regulatory & execution risks are material. With deal sizes growing, regulators in the US, UK, and EU are more aggressive—UK takeover rules (e.g., UK’s February 5 deadline in the Rio-Glencore case) and antitrust reviews (in the WBD-Netflix/Paramount drama) loom large. Shareholder activism (e.g., over fairness, break-up fees) adds strategic uncertainty. Financing certainty, valuation mismatches, and integration risk remain top execution risks.
Strategic implications for financial institutions:
- Advisory banks should prioritize winning mandates on mega-deals, given potential for outsized fees but also reputational risk.
- Deals structured with high guarantee and all-cash components (e.g., Paramount’s offer) may become preferred when certainty is valued. Sellers must weigh risk, speed, and terms beyond headline value.
- Private equity players with access to financing and dry powder are well-positioned, but valuations are stretched; focus may shift toward distressed or special situation opportunities.
- Regulators will increasingly shape deal structure—break-up fees, cross-border implications, ownership rules—so legal diligence and regulatory strategy need to be embedded early.
Open questions:
- Will regulatory bodies block or significantly force restructure in large mega-deals (Rio-Glencore, Netflix-WBD)?
- Can acceleration in interest rate cuts and inflation ease strongly enhance M&A volume in lower middle-market deals in 2026?
- What execution risks from geopolitical, supply chain, or environmental regulation could suddenly change deal valuations in natural resource and energy sectors?
- How sustainable are seller premiums in media & tech, especially when revenue growth slows or content costs rise?
Supporting Notes
- In 2025, global M&A crossed $4.5 trillion, second-highest ever, with 68–70 mega-deals above $10 billion.
- Goldman Sachs CFO expects momentum from 2025 to carry into 2026; sees jump in financial sponsor deals and equity underwriting.
- Rio Tinto and Glencore in revived merger negotiations worth ~$260 billion enterprise value.
- The deadline of February 5 applies under UK takeover rules for any formal offer in the Rio-Glencore case.
- Netflix bid for part of Warner Bros. Discovery valued at $72 billion equity / $82.7 billion EV; Paramount’s bid values entire WBD at $108.4 billion.
- Paramount’s offer is all-cash at $30/share and includes a $40.4 billion guarantee from Larry Ellison for equity financing; Netflix’s offer includes stock.
- Investment banks competing for advisory roles in Rio-Glencore (JPMorgan, UBS, Citi).
- Private equity dry powder approx. $2.2 trillion available globally as of late 2025.