Global M&A remains resilient as market instability signals a volatile year ahead

The first six months of 2026 have told a story of sharp contrasts from a record-breaking start giving way to a significant cooling in deal performance. Yet beneath the headline numbers, we see a market that has not lost its appetite for dealmaking, even as macroeconomic and geopolitical forces test the resolve of even the most seasoned acquirers.

Our latest Quarterly Deal Performance Monitor (QDPM), developed in partnership with the M&A Research Centre at Bayes Business School, shows that global dealmakers underperformed companies not engaged in M&A by a significant -11.9 percentage points (pp) in the second quarter of 2026, for deals valued over $100 million completed between April and June. This is a sharp reversal from the momentum we observed at the start of the year and reflects the turbulent environment that has defined much of 2026.

A tale of two quarters

The contrast between the first and second quarters could hardly be more pronounced. In the first three months of 2026, we recorded a historic 12 mega deals what we define as transactions valued over $10 billion, completed worldwide, the highest such figure in our data.

That momentum did not hold. Only three mega deals closed in the second quarter, and the total value of completed transactions fell from a five-year high of $438 billion to $232 billion.

Large deals — those valued over $1 billion — also declined, with 48 transactions completed in Q2 compared to 56 in Q1. The sharp pullback in mega deal activity dragged down overall deal values and contributed meaningfully to the underperformance we observed across acquiring companies.

Yet we caution against reading this as a structural retreat from M&A. The 202 transactions valued over $100 million completed worldwide in the second quarter of 2026 actually surpassed the 176 deals closed in the same period last year. Deal volume also remained close to the 215 transactions completed in Q1, suggesting that smaller and mid-market deals continued at a healthy pace despite the volatility. In our assessment, what we observed in Q2 is less a breakdown and more a market reset, a natural recalibration following an exceptional opening quarter.

Regional performance: universal underperformance, uneven impact

One of the most striking findings from our research this quarter is that every regional acquirer cohort underperformed its respective index between April and June 2026. The breadth of that underperformance tells us that the headwinds shaping deal performance: geopolitical instability, shifting trade policy and valuation uncertainty are genuinely global in nature.

In North America, acquirers underperformed by -11.6pp across 103 completed deals, compared to -5.4pp across 117 deals in Q1. The decline in both deal count and relative performance points to a more cautious approach among North American buyers as they navigate evolving tariff environments and interest rate uncertainty.

European dealmakers underperformed their index by -8.3pp with 38 completed transactions in Q2, a significant reversal from the +6.0pp outperformance we recorded with 40 deals in Q1. British acquirers mirrored the broader European trend, underperforming the index as domestic and cross-border activity cooled. The swing from positive to negative territory in a single quarter underscores just how quickly sentiment can shift in the current environment.

The most acute deterioration was in Asia-Pacific, where acquirers substantially underperformed their regional index by -35.8pp — a dramatic drop from -3.4pp in Q1. This regional figure was heavily influenced by a sharp fall in Chinese deal activity. Chinese buyers completed just seven transactions in Q2, compared to 21 in Q1, reflecting the intensified geopolitical scrutiny and trade tensions affecting cross-border M&A flows in the region.

Yet Asia-Pacific was also the only region to record a quarterly rise in deal volume, with 51 completed transactions in Q2 compared to 49 in Q1. That resilience tells us that deal appetite in the region remains intact even as performance metrics have suffered — a pattern we will be watching closely in the second half of the year.

Staying the course: discipline in a volatile market

What does this data tell us about where the M&A market is heading? In our view, the fundamental drivers of deal activity have not changed. The push for scale, cost efficiency and competitive positioning continues to motivate boards and management teams to pursue transactions even in uncertain conditions. What has changed is the premium placed on execution discipline.

In an environment defined by sharp, seesaw swings in deal performance and an unpredictable macroeconomic and geopolitical backdrop, buyers have largely refused to pause. They continue to stare down volatility to close deals. But the data is clear: the gap between deals that create value and those that destroy it widens in turbulent markets.

Dealmakers who succeed in the current climate will be those who maintain a rigorous, strategy-driven focus, pursuing sector-specific opportunities where they have genuine expertise and competitive advantage, rather than chasing scale for its own sake.

Geopolitical uncertainty, valuation concerns and shifting trade policies have yet to significantly temper the pace, depth and breadth of the global M&A market. But we are under no illusion that the second half of 2026 will be any smoother. The conflict in the Middle East, continued tension around trade policy and ongoing volatility in financial markets are all factors that will continue to test dealmaker confidence.

Our advice to clients navigating this landscape is consistent: build transactions on strategic logic, perform rigorous due diligence and invest seriously in integration planning from day one. In our experience, the deals that endure uncertainty best are those that were never solely dependent on benign market conditions to generate value. That discipline — not the macro backdrop — is ultimately what separates the deals that create lasting value from those that do not.

Based on WTW’s Quarterly Deal Performance Monitor (QDPM), Q2 2026, conducted in partnership with the M&A Research Centre at Bayes Business School. The research was conducted between April 1 and June 30, 2026.