Hopes for record year in dealmaking punctured by interest rate increases

By the Editorial Team · Monday, October 5, 2026

Global merger and acquisition activity dropped below $1 trillion in Q3 2026, falling to $986 billion due to rising interest rates, geopolitical tensions, and increased deal uncertainty. Despite the slowdown and fewer megadeals, companies continue to pursue strategic acquisitions cautiously, with experts expecting measured dealmaking to persist amid economic and technological challenges.

Global merger and acquisition activity fell below $1 trillion in the third quarter of this year for the first time since 2018, as rising interest rates and geopolitical tensions put pressure on dealmaking. According to data from LSEG, transactions totaled $986 billion from July to September, marking a steep decline from nearly $1.7 trillion recorded in the previous quarter. This represented a 13 percent decrease compared to the same period last year.

After a robust first half in 2026, characterized by a surge in deal volume that helped companies overcome uncertainties linked to trade policies and conflicts in the Middle East, the pace of mergers and acquisitions slowed significantly. Activity for the year through September reached $3.9 trillion, trailing behind the $4.2 trillion seen during the same period in 2021.

Market observers attribute the slowdown in part to higher borrowing costs as central banks raise interest rates to curb inflation, complicating the financing of large-scale deals. The rapid adoption of artificial intelligence and shifting economic conditions have further introduced uncertainties, prompting corporate boards and executives to exercise greater caution and rigor in evaluating potential transactions.

Despite the overall decline, certain high-profile agreements closed during the quarter. These include Aon’s $17 billion acquisition of insurance brokerage firm USI, backed by private equity firm KKR, and Uber Technologies’ €13 billion purchase of German food delivery company Delivery Hero. Another notable transaction saw former Disney CEO Bob Iger partnering with investor Josh Kushner to acquire the NBA’s Los Angeles Lakers for $12.5 billion.

However, the market for megadeals—transactions valued above $10 billion—contracted sharply, with only 10 closed in the third quarter compared with 26 in the preceding quarter, marking the lowest quarterly tally in nearly two years. Several major deals also unraveled during this period, including AstraZeneca’s withdrawal from a proposed $400 billion merger with Bristol Myers Squibb and Solstice Advanced Materials abandoning its $14.5 billion takeover bid for Element Solutions.

Industry experts suggest that while uncertainty has slowed the volume of deals, appetite for strategic acquisitions remains. “Boards and management teams are taking more time to evaluate risks, which has slowed deals down, but they are still inclined to action,” said Aaron Gruber, global co-head of M&A at law firm Crabtree, Swaine Moore.

With the global economy facing ongoing inflationary pressures and geopolitical challenges, analysts anticipate dealmaking activity to remain cautious in the near term but maintain a longer-term interest in corporate consolidations, particularly in sectors disrupted by technological change.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.