M&A Market 2026: Private Equity Drives the Upturn – Carve-outs in Focus, AI Transforms Deals

• Private equity is particularly optimistic: 37 percent of investors expect more than five transactions in 2026—compared to just 20 percent of companies.
• Carve-outs in focus: 71 percent of PE investors are actively evaluating or pursuing portfolio spin-offs, and 55 percent have specific transactions in the pipeline.
• Deals remain predominantly below the billion-dollar mark: 95 percent of PE deals and 83 percent of corporate deals are expected to be under $1 billion, often in the range of $250 million to $500 million.
• AI firmly established in M&A: 56 percent use AI in due diligence and valuation, 53 percent in deal sourcing—with measurable efficiency gains.

Berlin, March 26, 2026
 

The global M&A market is expected to gain significant momentum in 2026. Private equity investors, in particular, are optimistic and are driving expectations for transaction activity. At the same time, priorities are shifting: companies are tailoring their portfolios more strategically, particularly through carve-outs, and are increasingly using new technologies such as artificial intelligence to support transactions. This is shown by the latest KPMG Global M&A Outlook, for which approximately 700 decision-makers from companies and private equity firms in 20 countries worldwide were surveyed.

Private equity is setting the pace in the M&A market. Thirty-seven percent of the investors surveyed expect to complete more than five transactions in 2026—significantly more than companies, only 20 percent of which report the same. Confidence is particularly high in the U.S., where companies are showing an above-average willingness to engage in transactions. At the same time, investors remain cautious regarding deal size. 95 percent of private equity deals and 83 percent of corporate transactions are expected to remain below $1 billion. Most deal managers anticipate transaction values between $250 million and $500 million. Strategically, the primary focus is on growth and transformation. The key drivers for transactions are entering new markets (58 percent), growing the core business (57 percent), and accessing technology and talent (46 percent).

A particularly clear trend is emerging in so-called carve-outs—that is, the sale or spin-off of individual business units. The study identifies 2026 as a potential “year of carve-outs.” Seventy-one percent of private equity investors are open to or actively working on such transactions, and 55 percent already have concrete plans in the works—compared to just 21 percent of companies. This development is driven primarily by strategic considerations. Companies are specifically divesting business units that no longer fit their core business in order to streamline their organization (52 percent), increase the value of the remaining units (42 percent), reduce risks (35 percent), and free up capital for new investments (33 percent).

Artificial intelligence is increasingly being used throughout the entire M&A process. Companies are using AI in particular in due diligence and valuation (56%), deal sourcing and strategy (53%), post-merger integration (45%) and transaction implementation (40%). It's not just about speed. Above all, AI enables analyses that were previously hardly possible with reasonable effort - such as the evaluation of large contract volumes, the continuous monitoring of integration risks or the systematic analysis of market and competitive data.

The effects are measurable: 17 percent of those surveyed reported efficiency gains of more than 25 percent in modeling and planning processes, in some cases even over 50 percent. In market and competition analysis, 59 percent see improvements of more than 10 percent.

As transaction activity increases, the challenges involved in implementation are coming more into focus. In particular, complex transaction forms such as carve-outs, joint ventures or staged transactions present companies with significantly greater challenges than traditional takeovers. The biggest risks cited by respondents are the operational unbundling of business units (52%), complex valuation issues (43%), the separation of IT and data structures (40%) and securing key personnel (32%). Regulatory requirements were also cited as an additional risk factor by 25 percent of respondents.