After a stuttering start in 2026, M&A activity is likely to tick up by year’s end due, in part, to a need for corporate buyers to stay ahead in an ongoing technological arms race, according to the latest predictions from EY-Parthenon.
In the company’s 2026 M&A outlook report released Tuesday, researchers projected total deal volume in the U.S. will increase roughly 8% by the end of the year. The report evaluated both strategic acquisitions by corporations, as well as those by private equity interests. The former category, EY-Parthenon researchers said, is likely to grow by 11%, while the latter will ultimately remain flat by 2026’s end.
In an interview with CFO.com, Mitch Berlin, EY Americas vice chair at EY-Parthenon, suggested that companies may be more likely to buy other businesses to acquire the latest technologies instead of building them in-house.
“Speed is really paramount for corporates,” he said. “For them, while the environment may not be ideal, they can’t afford to wait for that ideal time, otherwise their competition will surge ahead and they’ll be left behind.”
Indeed, conditions for deal activity are hardly ideal, with war raging in the Middle East, Ukraine and elsewhere, along with rising consumer prices and an increased cost of capital.
Private equity firms, meanwhile, apparently don’t feel the same pressure to buy more portfolio companies. That’s especially true as PE buyers hold onto their acquisitions for longer than expected. As of February, private equity companies were estimated to be sitting on 32,000 unsold companies around the globe, or about $3.8 trillion worth of businesses, according to Bain & Company estimates at the time.
EY-Parthenon’s Berlin pointed out that, during the first quarter of 2026, private equity deal volume was down 11%. So if the company’s predictions about flat volumes by the end of the year come true, that means PE deal activity will tick up to some degree over the remaining months, he noted.
Berlin suggested that some of the current slowdown in private equity deals is a result of the latest technological disruptions. Chiefly, those pertain to advances in artificial intelligence.
“There is concern right now, for example, around software companies,” he said. “Software was such a prime target for private equity over the past three years, but now people are waiting to understand how disruptive AI is going to be to some of these software companies. … Rather than make a bad investment, (private equity firms) wait and see what happens over time.”
On the corporate side, the report revealed a 22% uptick in M&A activity in 2026’s first quarter.
To arrive at their predictions, EY-Parthenon researchers take into account a range of quantitative and qualitative data, including GDP, Federal Reserve borrowing rates, the treasury bond rate, CEO confidence surveys and more, Berlin said.
