Megadeals & AI Reshape M&A in 2026: Agency Holdcos Face Transformative Pressure

Global Deal Value, Megadeals & Market Momentum

Through 2025, global M&A volumes rose sharply, reaching approximately US$4.3 to US$4.5 trillion—placing 2025 as the second-best year on record, only behind 2021. [2][3] A large part of this increase was the rise in megadeals (transactions over US$10 billion), which comprised more deals than in prior years, driving an increase in average deal size even as volume in smaller deals declined. [4][1][2]

AI and Infrastructure as Strategic Pillars

AI is not just a theme—it’s reshaping investment priorities. Corporates and private equity are targeting companies with strong data sets, infrastructure for computation (data centres, chips, cloud providers), and AI-adjacent tech (governance, automation). [5][4] Large deals include OpenAI’s multibillion chip/supply agreements (with AMD among others), AI cloud infrastructure partnerships, and investment in hyperscale data centres. [4][5]

Holdco Consolidation & Agency Industry Shifts

One of the biggest recent developments is the merger between Omnicom and Interpublic Group (IPG), completed in late 2025, forming an agency giant with over US$25 billion in combined revenue. [6] This deal reflects the holdco strategy to centralize operations, reduce cost (expected US$750 million annually), and scale in response to competitive pressures from tech platforms and consultancies. [1][6]

Meanwhile, midsize “challenger” agency networks like Stagwell and Attivo are growing by acquiring agencies, integrating tech capabilities, and offering more nimble service models. These players are closing the gap, especially for clients seeking speed, specialization, and tech fluency. [6]

Operational Implications & Risks

Agencies and businesses are undergoing job cuts, redundancies, and realignments as efficiencies are sought. [1][6] The structure of agency revenue is shifting toward “principal media” models (where agencies purchase inventory and resell with markup or guarantees) and solutions-oriented rather than purely service-oriented engagements. [6] There are also looming regulatory risks—antitrust in large mergers like Omnicom-IPG, data privacy and governance in AI investments. Macro risks include interest rate sensitivity, supply chain constraints for chips/data centre hardware, and the sustainability of high valuations in AI companies. [2][5]

Open Questions & Strategic Outlook

Some key questions remain: How will regulatory authorities in the U.S., EU, and Asia respond as more holdco-level consolidation and cross-sector AI M&A occur? Will companies favor building vs acquiring infrastructure in AI, especially given heavy capex requirements? Can challenger agencies maintain differentiation as holdcos rebrand or consolidate technology and service offerings? Also, how will inflation, interest rates, and geopolitical uncertainty alter the optimism underpinning big deal pipelines?