Corporate M&A Pulls Ahead as the Deal Market Accelerates

The U.S. deal market has gained momentum in 2026, but the recovery is unfolding very differently across corporate buyers and private equity firms. Evan Berta, an associate at Hunt Scanlon Ventures, examines EY-Parthenon’s latest Deal Barometer and what the widening divide reveals about strategic acquisitions, AI-era capabilities, and the growing importance of leadership and talent in determining where companies deploy capital.

EY-Parthenon’s August Deal Barometer: US M&A Activity Outlook points to a stronger deal environment than anticipated earlier this year. U.S. transactions valued above $100 million increased 22 percent year-over-year through the first half of 2026, while total deal value surged more than 50 percent, fueled by a wave of large strategic transactions.

EY-Parthenon now forecasts U.S. deal volume will finish 2026 up 15 percent, following 13 percent growth last year. Even under its pessimistic economic scenario, the firm projects 11 percent growth, while its optimistic case would push activity 18 percent higher. The headline numbers suggest resilience, but underneath them sits a pronounced divergence between corporate buyers and private equity.

Corporate Buyers Turn to M&A for Capabilities

Corporate M&A has emerged as the primary engine behind this year’s acceleration. Activity increased 33 percent through the first half of the year, including 40 percent year-over-year growth in the second quarter alone. EY-Parthenon now expects corporate deal volume to rise 22 percent for the full year, compared with 13 percent growth in 2025.

Importantly, companies are not simply acquiring businesses to increase scale. EY-Parthenon describes the current cycle as increasingly transformational and capability-led, with executives using acquisitions to gain AI capabilities, strengthen competitive positioning, and accelerate long-term transformation.

Technology has led activity, while power and utilities, aerospace and defense, and life sciences have also experienced significant growth as buyers pursue digital infrastructure, advanced technologies, electrification assets, and innovation platforms.

“When AI, specialized expertise, or new operating capabilities sit at the center of the investment thesis, the quality of the leadership and talent being acquired becomes a fundamental part of the value equation.”

“The acceleration in corporate M&A tells us that companies increasingly view acquisitions as a way to close capability gaps that may take too long to address organically,” said Evan Berta, an associate at Hunt Scanlon Ventures.  “When AI, specialized expertise, or new operating capabilities sit at the center of the investment thesis, the quality of the leadership and talent being acquired becomes a fundamental part of the value equation.”

For human capital leaders, that changes the conversation around M&A. Acquiring technology or intellectual property may be part of the rationale, but retaining the executives, technical specialists, and institutional knowledge behind those capabilities can ultimately determine whether the strategic thesis translates into performance.

Private Equity Returns, But Selectivity Remains

Private equity presents a markedly different picture. PE deal activity fell 13 percent year-over-year during the first quarter before rebounding 18 percent in Q2, leaving first-half activity only two percent above the comparable period last year.

EY-Parthenon expects PE deal volume to finish 2026 just one percent higher, compared with a 22 percent increase for corporate M&A.

The report attributes that restraint to financing costs, exit conditions, fundraising dynamics, and elevated return hurdles. EY’s scenario analysis also demonstrates how sensitive the PE recovery remains: deal volume could rise six percent under an optimistic environment or decline five percent under a pessimistic one. Corporate M&A, by comparison, is projected to grow between 19 and 24 percent across those same scenarios.

That environment places even greater emphasis on execution after an acquisition. “As capital becomes more selective, there is less tolerance for getting the leadership equation wrong,” said Mr. Berta. “Private equity firms need confidence not only in the asset and valuation, but in whether the management team has the capabilities to execute the value creation plan.”

“As capital becomes more selective, there is less tolerance for getting the leadership equation wrong.”

The implication for talent is significant. Leadership assessment, succession planning, organizational design, and access to specialized operating expertise become more important as sponsors pursue fewer deals with higher conviction.

Talent Moves Into the Investment Thesis

EY-Parthenon’s outlook also highlights how the nature of strategic value is changing. AI-driven investment remains one of the supports beneath the broader economy, while acquisitions are increasingly being used to secure capabilities that companies believe will strengthen their position for the next phase of competition.

That puts human capital closer to the center of transaction strategy. A capability-led acquisition cannot be separated easily from the people who created that capability, particularly when the target’s value rests on specialized technical expertise, leadership, innovation, or institutional knowledge.

“Buyers increasingly need to understand the talent architecture behind the asset before the transaction closes,” said Mr. Berta. “Who owns the critical capabilities, which leaders need to stay, and where organizational gaps could undermine the thesis are becoming investment questions rather than post-close HR questions.”

For executive search firms and human capital advisors, this creates an opportunity to move further upstream in the transaction lifecycle. Talent diligence, leadership assessment, retention strategy, and capability mapping can increasingly help buyers understand whether the organization they are acquiring is equipped to deliver the performance they are underwriting.