SRI panelists say M&A market shows strength heading into 2026

The U.S. M&A market delivered strong results in 2025, and panelists at the Securities Regulation Institute being held in Coronado this week expressed cautious optimism for continued growth in 2026, despite lingering uncertainties.

Michele Anderson, a partner at Latham & Watkins LLP and M&A session chair, highlighted the strength of last year's M&A market.

"In 2025, we showed very good signs of recovery with significant deal volume--even more noticeable with increases in terms of deal value," she said.

Citing Morgan Stanley data, Anderson noted that 2025 marked the second-highest M&A volume ever, with total transactions reaching approximately $4 trillion, a 40% increase from 2024. "This growth is really attributable to the size of the deals, not just the number of deals," she said, pointing to a surge in large-cap transactions, or deals involving the largest public companies.

Panelists also noted that M&A activity in 2025 spanned all deal sizes but was dominated by strategic large-cap transactions across technology, financial services and industrial sectors. Private equity sponsors were also active, often teaming up to pursue larger and more complex deals.

Several factors contributed to this growth.

"Robust M&A activity was fueled by readily available financing, including both traditional bank debt and private credit sources, which allowed transactions that might otherwise have been difficult to structure," Anderson said.

Anderson also pointed to a growing pool of both buyers and sellers, along with a substantial inventory of seasoned portfolio companies as key drivers.

"There's a perception that the U.S. regulatory environment is friendlier and more predictable now, particularly in terms of antitrust regulation," she said, though she cautioned that economic and political uncertainty remains a factor.

Polling the audience of attorneys and regulators at SRI, Anderson found optimism for the year ahead: 75% of attendees expected M&A activity to increase in 2026, higher than the 62% of 100 investors recently surveyed by Morgan Stanley.

On potential tariff impacts, the audience split 50/50. "It's a trick question," Anderson said. "The answer depends."

Anderson noted that some buyers have actually used tariffs as an opportunity to pursue cross-border acquisitions to mitigate U.S. tariff risks, and supply chain resiliency has become an increasingly important theme in deal diligence.

Other panelists echoed the sense of momentum heading into 2026.

Iliana Ongun, a partner at Milbank LLP, said, "There is a lot of tailwind heading into 2026. We need to be out there and looking or we might be left on the sidelines."

David Katz of Wachtell, Lipton, Rosen & Katz pointed out that M&A activity is likely to shift from large-cap deals to mid- and smaller-cap companies in the coming year.

Regulatory developments were also on the agenda.

Ted Yu, associate director at the SEC's Division of Corporation Finance, said the SEC is exploring potential updates to the 20-day business rule for tender offers, a decades-old rule that gives investors time to decide whether to sell shares in a tender offer.

Yu noted that the agency is considering applications for pre-IPO companies cleaning up their capitalization tables--simplifying ownership structures--and private equity-led tender offers seeking liquidity events.

"It's about streamlining this rule and not having investors be harmed," said Yu.

Katz noted the potential implications of shortening the period for public company offers.

"The original rule was 10 days. It was lengthened to 20 days to provide investor protection," he said. "If we go back to a shorter period, it really does run a risk of being coercive or putting pressure on shareholders to make an early decision."

Overall, however, the panel highlighted a combination of strong deal volume, favorable financing, strategic opportunities and regulatory attentiveness as factors positioning U.S. M&A for continued activity in 2026, even as participants remain mindful of potential economic and political headwinds.