The Rebound with an Asterisk
If you only read the headlines, 2025 was a bonanza: global M&A deal value surged 40% to hit $4.9 trillion. But if you look at the balance sheets, a strange paradox emerges. While deal value is climbing, the actual share of capital allocated to M&A has hit a 30-year low of just 7%.
This is the non-obvious story of the current market. Companies are doing bigger deals, but M&A has actually fallen down the priority list. Why? Because the “Magnificent 7” and others are too busy pouring concrete and buying GPUs. The report notes that the Mag 7 alone spent nearly $500 billion on Capex and R&D in the first three quarters of 2025.
The “Crowding Out” Effect
This offers a critical insight for 2026: Internal investment is crowding out external acquisition.
In previous cycles, cash flowed into M&A because organic growth was hard to find. Today, the AI infrastructure build-out is consuming so much oxygen (and cash) that M&A is being forced to justify its existence like never before. The bar for ROI has been raised because every dollar spent on a target is a dollar not spent on an Nvidia chip or a new data center.
The Death of the Auction
Another subtle shift is the death of the passive buyer. The report highlights that winning acquirers are no longer waiting for investment bankers to run a “bake-off”. They are maintaining “industry gameboards” - active lists of 15 to 20 top targets - and knocking on doors before a ‘For Sale’ sign ever goes up.
In a world where capital is tight (allocated to Capex) and targets are scarce (consolidation), you can’t afford to pay the “auction premium.” You have to engineer the deal yourself.
Stabilize, Integrate… Transform?
Finally, the report identifies a fatal flaw in the traditional integration playbook. Most companies stop at “Stabilize and Integrate.” They merge the emails, fire the redundant HR staff, and declare victory.
But the winners in 2026 are adding a third phase: Transform. They are using the chaos of the merger as a smokescreen to force through changes that would be impossible in peacetime - like radically overhauling procurement or shutting down legacy product lines. If you aren’t using the deal to break your own internal bureaucracy, you aren’t getting your money’s worth.
Check the article from Bain here - Looking Ahead to 2026: Getting a Boost from the Great Rebound