Key Findings

  • Two-thirds of U.S. business leaders plan to make more M&A deals in 2026 than this year, according to survey results released by KPMG on Wednesday.
  • Dealmakers surveyed pointed to expectations of further interest rate cuts next year as a major driver of future M&A activity, along with tax policy changes under the One Big Beautiful Bill Act.
  • "After two years of false dawns, the tailwinds of rate cuts and tax reductions are expected to overcome the headwinds of tariffs and government shutdowns to deliver a better year for M&A," Dean Bell, KPMG's U.S. head of M&A advisory and strategy, said in a statement included in the report.

Deeper Dive

The survey results follow the Federal Reserve's decision on December 10 to cut its key interest rate by 25 basis points.

The Fed's action provides a "welcome tailwind" for M&A activity in 2026, said Mitch Berlin, EY Americas vice chair and EY-Parthenon leader.

"Lower cost of capital improves the viability of leveraged deals, giving dealmakers greater flexibility and confidence to pursue new opportunities," he said in an email last week.

According to an EY report from October, M&A deal value for U.S. transactions over $100 million is expected to grow 3% in 2026, after an estimated 9% growth this year.

In an optimistic scenario—including conditions such as a "material" reduction in U.S. tariffs, easing global trade tensions, and stronger productivity growth—total deal value next year could jump by as much as 7%, EY predicted.

"The market is actually returning to, and in some cases exceeding, pre-pandemic levels," Josh Putnam, EY-Parthenon global and Americas corporate finance leader, said in an email Thursday. "CFOs are actively cleaning up portfolios through divestitures and spin-offs to free up capital needed for core businesses. We call it 'earning the right to grow'—finance chiefs must prove to the market they can generate excess returns before being allowed to pursue significant, value-creating deals."

According to the KPMG report, M&A prospects started high in 2025, but the Trump administration's "Liberation Day" tariffs in April cooled expectations. That move and subsequent tariff announcements created significant uncertainty for dealmakers.

However, KPMG said the passage of the One Big Beautiful Bill Act in July provided a tailwind, boosting deal appetite. Although the fall government shutdown caused delays and additional costs for some deals, it did not lead to major deal cancellations, the report said.

"Dealmakers appear to have become accustomed to the 'new normal' of tariff disruptions and are proceeding with M&A plans anyway," the report said.

KPMG surveyed 300 M&A decision-makers at large U.S. private equity firms and corporations between November 24 and December 5.