M&A Trends: Outlook for Healthcare, Tech, Banking, & More
•February 19, 2026
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Why It Matters
These trends accelerate deal cycles, alter pricing dynamics, and raise regulatory stakes, directly affecting investors, corporate strategists, and market stability.
Key Takeaways
- •AI accelerates due diligence, reducing time and risk
- •ESG factors now influence deal valuations and integration plans
- •Cross‑border M&A up 25% in Asia‑Pacific, $286B total
- •Private equity expands into tech, healthcare despite fundraising slowdown
- •Earnouts rise to one‑third of private‑target deals in 2023
Pulse Analysis
The infusion of artificial intelligence into M&A due‑diligence is redefining how firms assess risk and value. Machine‑learning models can parse terabytes of financial, legal, and market data in hours, flagging hidden liabilities that traditional reviews might miss. This speed not only shortens transaction timelines but also lowers advisory costs, giving acquirers a competitive edge in fast‑moving sectors such as fintech and biotech. However, AI remains a tool; final judgments still rely on human expertise to interpret nuanced findings and negotiate terms.
Environmental, Social, and Governance (ESG) criteria have moved from a peripheral checklist to a core valuation driver. Companies with strong ESG scores command premium multiples, while poor sustainability records can depress offers or trigger deal break‑ups. The trend is especially pronounced in cross‑border deals, where differing regulatory regimes force acquirers to conduct granular ESG due‑diligence and plan post‑deal integration of sustainability policies. As investors demand greater transparency, firms are embedding ESG metrics into deal modeling, making them indispensable for accurate forecasting and stakeholder confidence.
Private equity’s growing footprint, coupled with heightened antitrust and data‑privacy scrutiny, is reshaping deal structures. PE firms are leveraging earnouts to bridge valuation gaps, tying payouts to future performance metrics that align incentives across parties. Simultaneously, regulators are extending review criteria beyond price effects to include data security and market concentration concerns, lengthening approval timelines. To navigate this complexity, virtual deal‑making platforms now integrate secure data rooms, AI‑driven risk assessments, and real‑time compliance checks, enabling global teams to collaborate efficiently while adhering to evolving legal standards.
M&A Trends: Outlook for Healthcare, Tech, Banking, & More
Mergers and acquisitions (M&A) play a crucial role in shaping the business landscape, with far‑reaching effects on industries, economies, and even global markets. These strategic moves allow companies to grow, enter new markets, and gain competitive advantages. Understanding M&A trends helps businesses, investors, and analysts make informed decisions and predict future market movements. These trends can reveal shifts in industry dynamics, economic conditions, and corporate strategies, giving stakeholders valuable insights into emerging opportunities and potential risks. In this guide, we’ll explore the leading trends in M&A in 2026, from the growing use of artificial intelligence (AI) to a shift towards vertical integration.
1. Increased Use of AI in Due Diligence
Artificial intelligence is changing how companies handle M&A, and AI tools are increasingly used in the due diligence process. AI can enhance due diligence by improving predictive accuracy, helping companies make better decisions about potential deals.
The use of AI in M&A due diligence is part of a bigger trend: the increasing use of technology to streamline the process. AI can analyze huge amounts of data quickly, identifying patterns and risks in contracts, financial records, and other documents that humans might miss.
For example, in legal due diligence, AI tools can review contracts much faster than humans can, saving significant time and money. AI is also good at finding hidden risks—analyzing market trends and company data to predict future problems or opportunities.
Some experts think AI could significantly change M&A. It might make deals happen faster and with less risk, but human judgment remains essential for final decisions. As AI technology advances, more companies will likely use it for due diligence, making M&A deals smoother and more successful.
2. Environmental, Social and Governance (ESG) Integration
Environmental, Social, and Governance (ESG) factors are becoming more important in M&A, with companies carefully reviewing ESG issues when acquiring or merging with other entities. A 2022 study published in Technological Forecasting and Social Change found that M&A activities can improve companies’ ESG performance, demonstrating that ESG is a critical component of business deals.
Environmental concerns – Climate change is a major focus worldwide. More companies investigate carbon footprints when buying other firms to avoid environmental risks and find green opportunities.
Social responsibility – Labor practices and community impact are receiving greater attention. Buyers are looking at how target companies treat workers and interact with local areas.
Governance issues – Good governance is crucial. Firms are examining board structures and ethics policies to ensure proper oversight after a merger.
ESG due diligence – Many companies now conduct ESG checks before deals, reviewing energy use, worker safety, and anti‑corruption efforts to spot risks and add value.
Integration challenges – Combining different ESG approaches can be difficult; companies need plans to merge ESG practices after a deal with new policies and training.
ESG in deal value – Strong ESG performance can increase a company’s valuation, while poor ESG practices may lower it.
3. Rise of Cross‑Border Mergers
Cross‑border mergers and acquisitions have seen a significant uptick in recent years. These deals involve companies from different countries joining forces or one company acquiring another.
The 1990s and 2000s saw a sharp increase in both inward and outward cross‑border M&As, a trend that continues to reshape the global business landscape.
Economic Growth Fuels Deals – Strong economic growth often leads to more cross‑border M&A, as companies have more resources to expand internationally. Conversely, slower growth can push firms to focus on domestic markets.
Regional Trends
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Asia‑Pacific experienced a notable rise in cross‑border M&A activity in 2024, with total announced value up 25 % year‑on‑year to US $286 billion. Around 80 % of these deals involved entities outside the region. Japan saw a surge in inbound M&A (US $74 billion) and outbound deals (+49 %).
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North America – Optimism about a resurgence in M&A activity is driven by potential rate cuts and policy certainty following the U.S. federal election.
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Europe – Record profits for banks and asset managers have not translated into the same level of M&A activity as in the U.S., prompting discussions about consolidation to strengthen market positions.
Notable activities include BBVA’s €12 billion bid for Sabadell and UniCredit’s €10 billion offer for BPM Banco, both facing governmental opposition.
Changing Market Dynamics – The rise in cross‑border acquisitions reflects companies’ growing interest in accessing new markets and resources globally, underscoring the increasing interconnectedness of the world economy.
4. Focus on Technology Acquisitions
Tech acquisitions have become a major trend in M&A as companies seek innovative startups and established tech firms to gain a competitive edge.
AI and Machine Learning – Large tech firms are acquiring smaller AI startups to enhance capabilities and integrate advanced technologies. For example, in August 2024 Google acquired Character.AI for US $2.7 billion, absorbing its chatbot technology and talent.
Reverse Acqui‑hires – Companies such as Amazon and Microsoft have licensed AI technologies and hired entire teams without full acquisitions, allowing rapid integration of cutting‑edge solutions while navigating antitrust scrutiny.
Cybersecurity – Growing digital threats have spurred acquisitions of cybersecurity firms. In July 2024 Alphabet was reported to be in advanced talks to acquire cybersecurity startup Wiz for roughly US $23 billion.
Cloud Computing – Acquisitions in the cloud sector aim to expand service offerings. Notable deals include Commvault’s acquisition of Appranix and a broader consolidation trend among cloud providers, with valuation multiples adjusting to a more cautious investment environment.
Biotech and Healthcare Tech – Healthcare executives anticipate increased M&A activity in 2025, with AI expected to drive further consolidation. Examples include Johnson & Johnson’s acquisition of Intra‑Cellular Therapies for US $14.6 billion and Eli Lilly’s advanced talks to acquire Scorpion Therapeutics.
Fintech – The fintech sector saw a 46 % rise in M&A transactions in 2024, with traditional financial institutions acquiring fintech startups to modernize services. Notable deals include Robinhood’s acquisition of Pluto, an AI‑driven investment research firm.
5. Private Equity’s Growing Influence
Private equity (PE) firms have become major players in M&A activity, shaping deal‑making across industries.
Decreased Fundraising – 2023 saw a slowdown in private‑market fundraising due to high financing costs and uncertain growth, with global fundraising falling 22 %. Despite this, PE‑backed buyouts remained strong, focusing on revenue growth and margin expansion.
Sector Diversification – PE investment has expanded beyond traditional sectors into technology, healthcare, renewable energy, and professional services. In the UK, private equity invested an estimated £534 million in regional law firms in 2024.
Value‑Creation Strategies – PE firms emphasize operational improvements, specialized management teams, and growth strategies to boost returns.
Cross‑Border Transactions – European buyout deals exceeding US $1 billion surged 78 % in 2024, with notable transactions such as a US $6.9 billion deal for Hargreaves Lansdown and a US $5.5 billion acquisition of Darktrace by Thoma Bravo.
6. Emphasis on Data Privacy During Acquisitions
Data privacy has become a crucial factor in M&A. Companies now scrutinize data protection practices to avoid inheriting breaches or privacy violations.
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Increased scrutiny of data security measures during due diligence.
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Inclusion of data‑privacy experts in M&A teams to assess compliance with privacy laws.
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Integration of privacy policies post‑acquisition to ensure consistent data handling.
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Cross‑border considerations require navigation of differing national privacy regulations.
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Technology‑driven assessments leverage platforms that can quickly scan large data sets for privacy risks.
7. Shift Towards Vertical Integration
Vertical integration is gaining traction as companies aim to control more of their supply chain and value‑creation process. By owning multiple stages of production, firms can reduce costs, improve efficiency, and secure critical resources.
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Healthcare – Companies are merging with insurers or pharmacy‑benefit managers (e.g., Amazon’s US $3.9 billion acquisition of One Medical; CVS Health’s US $8 billion purchase of Signify Health).
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Technology – Tech giants are acquiring hardware manufacturers, software developers, and content creators to build comprehensive ecosystems, including custom silicon development.
While vertical integration offers advantages in uncertain markets, it also presents integration challenges and requires significant investment.
8. Increased Scrutiny on Antitrust Issues
Antitrust regulators are intensifying review of M&A deals, especially cross‑border transactions and vertical mergers. Authorities now consider factors beyond price effects, such as data privacy and innovation, leading to longer review periods and, in some cases, deal breakups.
9. Use of Earnouts in Deal Structuring
Earnouts have become a popular tool to bridge valuation gaps between buyers and sellers. In 2023, roughly one‑third of private‑target M&A deals included earnout provisions, up from 21 % in 2022.
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Earnouts tie a portion of the purchase price to future performance (typically 1–3 years).
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Common metrics include revenue, EBITDA, or subscription‑based ARR thresholds.
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They are especially prevalent in technology and life‑sciences sectors but can be used across industries.
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Clear, measurable targets and robust due‑diligence are essential to avoid disputes.
10. Virtual Deal Making Becoming Standard
Virtual deal making, driven by secure online data rooms, video conferencing, and digital signatures, has become the norm. These tools enable cross‑border collaboration, reduce travel costs, and keep M&A activity flowing even when in‑person meetings are limited.
Frequently Asked Questions
What factors are driving current global M&A activity?
Strategic growth, cost synergies, market expansion, technological advancements, and regulatory changes.
How has the M&A landscape changed in 2025 compared to previous years?
2025 shows increased activity, stronger private‑equity involvement, sector‑specific growth, and a more accommodating regulatory environment.
Which industries are experiencing the most significant M&A activity this year, and why?
Technology, healthcare, and financial services lead due to innovation needs, consolidation pressures, and digital transformation.
What trends are emerging in the valuation of companies in M&A transactions?
Greater focus on intangible assets (IP, data, customer relationships) and ESG considerations.
What role is technology playing in shaping M&A deals and due diligence processes?
AI, machine learning, and blockchain are streamlining data analysis, risk assessment, and integration planning.
Final Thoughts
As we move further into 2025, M&A is being reshaped by advanced technologies, ESG priorities, vertical integration, and heightened regulatory scrutiny. Cross‑border transactions and private‑equity activity continue to rise, while data‑privacy concerns, antitrust reviews, and earnout structures play pivotal roles in deal structuring. Virtual deal‑making has become an essential tool for global M&A processes, enabling firms to navigate this evolving landscape efficiently.
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