Cross-border M&A likely to stay strong in 2H 2026; AI, energy key drivers: Report
New Delhi, August 4
Cross-border M&A activity is likely to remain strong in 2H 2026, with technology, especially artificial intelligence, energy and supply-chain security emerging as key drivers, as per a report by JPMorgan.
According to the report, cross-border deal activity surged 63 per cent YoY to USD 820 billion in 1H 2026, accounting for 26 per cent of total M&A volume. The activity was concentrated in larger deals, with 17 of the 48 mega-deals being cross-border and contributing 37 per cent of total cross-border volume.
"Momentum is being driven by strategically critical sectors, specifically technology, financials, energy and power," it noted.
The report further highlighted that US and UK remain key cross-border M&A corridors, with six of the 10 largest deals being transatlantic. With this, European buyers are targeting the US to diversify growth and gain access to innovation, while deals involving European targets are largely focused on consolidation and building stronger regional champions.
At the same time, geopolitical tensions and protectionist policies are also widening valuation gaps and reshaping deal corridors, prompting buyers to prioritise resilience and strategic capabilities.
Meanwhile, AI has emerged as a key driver of deal activity and capital formation in 2026, with corporates and investors making long-term investments to integrate the technology into core operations. Rising AI adoption and compute demand are also benefiting the broader ecosystem, including data centres, power, cooling, networks and enabling software.
While urgency is high, and the "fear of missing out" is increasing, macro volatility (trade, energy prices, rates) and uncertainty around the pace of disruption continue to weigh on traditional M&A, as per JPMorgan.
The report noted that four of the top five global deals in 1H 2026 were linked to AI and its growing infrastructure needs. AI-linked stake sales, including major funding rounds for frontier AI model platforms, totalled USD 370 billion during the first half.
Additionally, six mega-funding rounds accounted for ~40 per cent of minority investment volume and 8 per cent of 1H 2026 total deal volume, which shows AI capital formation has become a meaningful driver of headline M&A activity.
"As the emphasis shifts from efficiency-first globalization to security-first strategic alignment, 2H 2026 cross-border activity is likely to be strong and increasingly related to technological sovereignty, energy resilience and supply-chain friendshoring," it said.
— ANI
Reader Comments
The point about 'security-first strategic alignment' is crucial. With all the geopolitical tensions, companies are now looking at supply chains differently. India should position itself as a reliable hub for friendshoring. Big opportunity for us in manufacturing and tech!
Transatlantic deals dominating makes sense. But as someone working in M&A in Mumbai, I see a lot of interest from US and EU buyers in Indian IT and pharma companies. The 63% surge is impressive, but I hope we don't end up selling our crown jewels cheaply in the name of globalization.
The AI capital formation numbers are mind-blowing! $370 billion in just six months shows how much FOMO exists. But as an investor, I'm also cautious about this AI bubble. These mega funding rounds better deliver on their promises for the long-term. 🇮🇳
While the headline numbers look great, the report mentions macro volatility weighing on traditional M&A. Any thoughts on how rising rates in the US might impact these cross-border deals? Seems like a double-edged sword for emerging markets like India.
As an Indian entrepreneur, this report gives me mixed feelings. On one hand, it's great that global giants are investing in AI and tech. On the other, I worry about the concentration - 17 mega-deals contributing 37% of volume means smaller players are getting squeezed out. Need more democratized access to capital.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.