Key findings
37% of PE dealmakers expect to do more than five deals in 2026, versus 20% of corporates, while US-based organizations report the highest confidence and readiness to transact.
AI is now embedded across the M&A lifecycle and making previously uneconomical analysis viable
71% of PE dealmakers are open to or actively pursuing portfolio separation, and 55% already have carve-outs under consideration.
May 2026: In our latest report titled 2026 Global M&A Outlook, KPMG captures insights from a survey of 700 PE and corporate dealmakers across 20 countries and jurisdictions. The findings come at a time when dealmakers are navigating a more complex decision-making environment. Legislative and regulatory volatility, evolving trade regimes and global conflicts, as well as transformational changes in global tax frameworks are reshaping forward-looking cost structures and return profiles.
PE confidence rises, even as deal sizes stay disciplined
Despite this complexity, PE firms are showing particularly strong expectations for deal growth, underpinned by the need to deploy capital, improving financing conditions and a gradual reopening of exit markets.
At the same time, expected deal sizes remain disciplined. 95% of PE dealmakers and 83% of corporate dealmakers expect the total value of their next transaction to be under US$1bn. For their next M&A transaction, PE and corporate dealmakers most commonly expect deal values to fall between US$250m and under US$500m (cited by 50% of PE and 32% of corporate dealmakers respectively).
Growth, capability and market expansion are driving deal appetite
The top strategic drivers for M&A decisions in 2026 were reported as expanding into new markets or geographies (58%), growing core business (57%) and acquiring technological capabilities or talent (46%).
Interest in carve-outs is rising sharply, with half of both PE and corporate dealmakers expecting carve-out activity to increase moderately or significantly over the next 12–24 months. 71% of PE dealmakers are open to, or actively pursuing portfolio separation, and 55% report already having carve-outs under consideration (versus 21% of corporate dealmakers).
The carve-out shift is being driven less by short-term market conditions than by strategic portfolio reshaping — dealmakers cite improving operational efficiency (52%), enhancing the valuation of remaining businesses (42%), reducing risk pressure (35%), and unlocking capital for reinvestment (33%) as the main drivers for increased carve-out activity. In practice, this means organizations are proactively separating businesses that dilute strategic focus, absorb disproportionate management attention or concentrate risk outside core capabilities — with the aim of redirecting capital and leadership capacity toward areas positioned for durable growth. Against this backdrop, 2026 is shaping up to be the year of the carve-out.
AI is being embedded across the M&A lifecycle — with clear efficiency gains already emerging
At the same time, AI is moving beyond experimentation and becoming embedded across the M&A lifecycle. One of the more significant shifts is not simply that AI is improving speed, but that it is making previously uneconomical analysis viable — including more exhaustive contract review, continuous integration risk monitoring, deeper competitive benchmarking, and stronger pattern recognition across deal history.
Dealmakers are also reporting measurable efficiency gains in key areas of the M&A lifecycle. 17% said AI is delivering a greater than 25% efficiency gain in valuation modeling and scenario planning, as well as budget modeling and tracking, with 3% reporting a 50%+ AI efficiency gain across both categories.
In competitive intelligence and market analysis, 59% report AI is providing a greater than 10% efficiency gain, including 19% reporting a 26–50% efficiency gain and 7% reporting a 50%+ efficiency gain.
Execution risk is rising alongside deal complexity
As deal activity accelerates, execution demands are becoming more visible and more consequential. Carve-outs, staged transactions, joint ventures and capability-driven acquisitions can place significantly greater demands on organizations than traditional full-business acquisitions.
Survey results reinforce this challenge, with dealmakers consistently identifying operational disentanglement (52%), valuation complexity (43%), IT and data separation (40%), talent retention (32%) and regulatory hurdles (25%) as material risks to successful outcomes.
Evolving tax regimes, trade volatility and shifting regulatory thresholds are adding further modeling and compliance demands, reinforcing the importance of execution readiness before close.
“M&A market is becoming increasingly strategic, with organizations placing greater emphasis on transactions that strengthen core capabilities and support long-term growth priorities. Investors continue to reassess capital allocation, prioritize quality earnings and post-deal value creation.
This is expected to drive steady mid-market activity, as well as increased interest in partnerships and portfolio optimization initiatives. At the same time, geopolitical and regulatory challenges remain key factors in any transaction, requiring careful planning and execution safeguards,” Ankul concluded.
