Global merger and acquisition activity declined 10 percent year-on-year in announced deal value during the third quarter through September, challenging dealmakers' pursuit of a record year.
The slowdown follows a robust 2025, which saw global M&A value surge 41 percent from 2024 to $4.8 trillion—the second-highest M&A year on record. That performance set a high bar for subsequent quarters.
Despite the overall value reduction, deal concentration has intensified: the number of transactions valued above $1 billion sits near record levels, indicating capital is consolidating in fewer, larger deals rather than distributing broadly.
Financing conditions have tightened sharply. Dealmakers anticipated rate relief that has not materialized. PwC's analysis attributes the slowdown to a "higher-for-longer" interest rate environment coupled with sticky inflation and record sovereign debt—forces that redirect available capital away from M&A.
Dealmakers interviewed dismissed the third-quarter decline as temporary, saying they do not view it as indicative of weakening momentum and expect improved activity ahead. That optimism, however, rests on fragile ground: the structural constraints of elevated borrowing costs and inflation persist without clear resolution.
Wall Street has lost traction in its push for a record-setting year. The capital environment that propelled 2025's 41 percent surge has reversed, forcing dealmakers to operate in tighter, more selective conditions.
