The great M&A rebound of 2025 was no flash in the pan. In the first five months of 2026, the global M&A market is up 41%, on track for the second-highest year ever (see Figure 1). The rebound remains broad-based across markets and sectors as well as grounded in strategic transformations required in a rapidly changing world (see Figure 2), although financial sponsor deal value declined 9% (see Private Equity Midyear Report 2026). But acquirers, especially those pursuing the megadeals that currently dominate the market, now face a new winner’s paradox: how to pair an ambitious M&A agenda with the transformation agenda that AI disruption demands?

Figure 1

Figure 2

First, let’s step back and look at what’s happening. Dealmaking in 2026 reflects the transformative forces shaping business that we’ve tracked in previous reports. In the first half of the year, a closed Strait of Hormuz emerged as the latest manifestation of a post-global order, the transition to an AI-driven economy accelerated, and companies faced the twin specters of rising inflation and slowing growth. Executives are making strategic choices for long-term efficiency, adaptability, and growth. At the same time, they find themselves navigating competing demands for capital and their own attention. In this environment, M&A deals need to move the needle on performance to stay on the short list of firm priorities.

On a regional basis, while post-global forces reshape supply chains and access to customers, Europe has become something of an M&A hot spot as companies look for strategic deals to sharpen their local and global competitiveness. Indeed, Europe, the Middle East, and Africa is up 77% overall through May 31, powered by megadeals for targets within the region (see Figure 3).

Figure 3

Deals range from domestic consolidation to regional scale to global: Orange, Bouygues, and Iliad leading a $24 billion offer for Altice France exemplifies domestic consolidation; Italian UniCredit’s revived approach to German Commerzbank aims to build regional scale; and Finland-based Kone’s $34.4 billion bid for Germany-based TK Elevator combines TK’s US exposure with Kone’s strength in Asia-Pacific, creating a leading global player. It’s a situation that may intensify if proposed European Commission merger regulations introduce a standard to evaluate merger benefits alongside competition concerns, with the stated goal of boosting EU competitiveness.

Enter the winner’s paradox in M&A

During the first half of 2026, the broader AI economy prompted AI-related deals beyond the typical bounds of the technology sector. For example, the explosive growth in energy-hungry data centers is one of the primary reasons behind the proposed merger between Florida-based utility NextEra Energy and Dominion Energy, which operates in Virginia and the Carolinas. The companies have emphasized how the operating and financing benefits from their combined scale and business mix will help them build the power generation required to meet growing large-load end-user demand.

And the first half of 2026 sustained the popularity of megadeals, which started in late 2025 (see Figure 4). A total of 74 megadeals valued at greater than $10 billion have been announced between January 2025 and May 2026, including 4 completed spin-offs, and the number and value of these megadeals grew year over year on the back of blockbuster deals such as McCormick’s bid for Unilever’s food business.

Figure 4

However, the AI boom that is fueling so many of these deals also is creating a winner’s paradox. Why? As companies pursue scale and resilience for this rapidly changing world, they are also in the early moves of an AI transformation. Many executives are now asking: How could we possibly manage an AI transformation alongside, or through, a massive integration program? At the same time, how can we afford not to?

Six fundamental questions

Complex megadeals have always carried peril and promise. The new reality is that the AI overlay may be making it one of the most difficult times ever to get large, complicated transactions right, yet they represent the single biggest opportunity if you do get them right. And a hot(ter) M&A market always ups the pressure to act quickly. That’s why some executives are now asking six basic questions that will form the foundation for their deal success.

Question No. 1: Do we have a clear view regarding how AI impacts the deal thesis? Every deal thesis should answer how AI will impact the target’s business model and enhance the combined entity. As companies adjust deal model assumptions for AI, they’ll find that some run-rate synergies will hit faster. Another impact: An integration program that absorbs AI-transformation initiatives will see greater one-time costs.

Question No. 2: Where can AI provide a faster no-regrets path to more M&A value creation? Acquirers are unleashing AI analytics on procurement contracts, supply chain networks, R&D portfolios, and charters of accounts to identify and confirm cost synergy opportunities two to three times more quickly, with more ambitious targets than outside-in diligence suggested. AI can surface insights from disparate, messy data sets in hours, enabling tailored cross-selling and go-to-market coverage from Day 1.

Question No. 3: Where can planning for AI today give us more options in the long run? You are on a multiyear journey.  Don’t be incrementalist.  Pick where AI will matter most, and work backward from a bold, aggressive vision that fully utilizes AI, including agentic tools with which you now are only barely familiar.

Question No. 4: How should we use this transaction as an unlocking moment for broader transformation? Successful M&A programs treat integration as a unique opportunity to tackle ambitious changes to the business not otherwise possible and to do so at the speed required to stay ahead of the market. When it comes to AI transformation, first principles still apply. Know the short list of levers that will both drive growth and take out costs. Make focused bets where there is the most value. Redesign processes for efficiency first.

Question No. 5: Are our leaders prepared to support our people through this disruption? Major integrations and AI transformations share a common requirement: bold leaders ready to set the tone from the top. The combined impact of an integration and AI adoption means all levels of both organizations will crave answers to the elemental question: What does this change mean for me? CEOs should move quickly to put in place the leaders who bring a clear and inspiring vision, a willingness to tolerate mistakes in the pursuit of innovation, and a commitment to keeping change management front and center.

Question No. 6: How should the way we manage integration programs evolve? AI can generate tailored workplans and checklists to kick-start an integration and then readily surface deviations from those plans over the course of implementation. The central integration management office can thereby dedicate more time stress-testing value creation plans, facilitating complex decision making, and leaning in to support implementation and change management.

As AI changes how executives think about M&A, addressing these six questions can spell the difference between companies that achieve successful integrations and AI transformations in tandem and those that find themselves playing by yesterday’s rules for deals.