Mizuho's Michal Katz Envisions Significant Merger Activity Until 2026

The global landscape for mergers and acquisitions (M&A) is witnessing dynamic growth, with Michal Katz, head of investment and corporate banking at Mizuho Americas, indicating that this trend will persist. During her address at the Reuters NEXT conference in New York, Katz detailed the conditions conducive to a flourishing dealmaking environment in 2025 and why these are expected to carry on into 2026.

This year has already experienced a surge in sizable deals, often referred to as megadeals, where transactions exceed $10 billion. Their cumulative value has risen more than twofold from the previous year, tallying around $1.3 trillion. Noteworthy instances include an $85 billion rail acquisition, a $40 billion data center sale, and a record-setting $55 billion leveraged buyout of Electronic Arts, highlighting corporations' keen intent to evolve and expand.

Katz pointed out that CEO pressures are mounting, driven by the disruption of traditional business models due to artificial intelligence. AI is redefining operational frameworks, customer engagement strategies, and forward-looking planning. To maintain competitiveness, executives are eager to prepare their companies for enduring transformations, fueling a noteworthy "pent-up demand" for mergers and acquisitions as firms that hesitated during uncertain times are now prepared to proceed.

She also predicts not only an uptick in megadeals over the next twelve months but also a plethora of medium-sized agreements under $10 billion. These smaller deals are vital as they enable private-equity firms to remain active, with many eager to divest older assets while the market offers favorable returns.

Another trend emphasized by Katz is the rise of shareholder activism. In 2025, investors have taken a more assertive stance, urging corporations to make strategic moves, divest units, or seek mergers. This call for "event-driven exits" often precipitates an increase in deal activity and significant shifts in strategy.

While tech and AI firms have dominated market activity this year, Katz noted a rising trend in healthcare acquisitions. Major transactions like Pfizer’s acquisition of Metsera, Abbott Labs’ purchase of Exact Sciences, and active pursuits by Thermo Fisher and Novartis indicate that leaders in the healthcare sector are gearing up for growth. This suggests an expanding M&A landscape across various industries rather than a focus solely on technology.

Despite this, the private credit market has encountered some challenges. Recent bankruptcies of well-known firms have sparked concerns regarding lending practices. Katz characterized these incidents as "idiosyncratic," suggesting they are more isolated and not indicative of a broader collapse. Yet, lenders and investors are exercising increased caution, demanding enhanced documentation, greater transparency, and more robust loan structures, which may ultimately bolster the overall market by curbing risky behaviors.

In summary, Katz’s insights at the conference stressed that the factors fostering a robust dealmaking environment in 2025—ambitious growth strategies, AI-induced changes, investor pressures, and active private equity participation—are likely to sustain a vibrant M&A market through 2026. As businesses strategize for the future, many are setting the stage for long-term investments that are poised to redefine their respective industries for years to come.

With technology transforming global markets and companies striving to adapt, the upcoming year could herald even more notable strategic maneuvers, unexpected alliances, and transformative mergers.