Morgan Stanley Predicts Global M&A Volume to Reach $6.4 Trillion in 2026, Surpassing the 2021 Peak
Alina Collins
Morgan Stanley predicts global M&A volume will reach a record $6.4 trillion in 2026, signaling a full-blown recovery after years of high rates and volatility held dealmaking in check.
How big is $6.4 trillion?
Morgan Stanley forecasts 2026 global M&A at $6.4 trillion, topping the 2021 all-time high.
This means → pent-up deal demand, frozen by two years of high rates and market swings, is now releasing all at once.
In plain terms = companies sat on their hands for two years; now the floodgates are open.
Is the data already backing this up?
Announced M&A volume in Q2 this year surged over 64% year-on-year; completed deals rose more than 33%.
The leading sectors — software, utilities, energy, and healthcare — all share high cash-flow visibility.
PE-backed M&A announcements grew over 10% in Q2, showing financial buyers are returning alongside strategics.
Why is the M&A cycle turning now?
Morgan Stanley analysts note the Trump administration has pursued a more permissive regulatory stance, easing the approval environment for deals.
On the funding side, alternative asset managers hold roughly $4.3 trillion in dry powder — capital raised but not yet deployed — ready to move.
This means → deregulation supplies the "permission," massive dry powder supplies the "ammunition" — both conditions arrived at the same time.
What is the biggest risk?
Morgan Stanley flags rising interest rates as the main variable that could derail the outlook.
In plain terms = when borrowing gets more expensive, acquisitions get harder — especially leveraged buyouts that depend on cheap debt.
Still, the bank sees the current M&A wave showing strong resilience to rate risk. This reflects a shift in deal drivers — from "cheap money" to strategic necessity.
What should we watch next?
Major U.S. banks report Q2 earnings next week; investment-banking revenue is the key data point.
Debt and equity issuance figures will show whether the financing side is keeping pace with deal activity.
This means → earnings season is the first "health check" for this M&A recovery narrative — strong numbers confirm the trend, weak ones force a re-rating.
Content is for reference only, not financial advice.