Allow me to introduce Simon Glairy, a globally recognized authority in insurance and Insurtech, with a sharp focus on risk management and AI-driven risk assessment. With decades of experience navigating the complexities of mergers and acquisitions, Simon has advised on some of the most pivotal deals reshaping industries today. In this insightful conversation, we explore the dynamic trends propelling M&A into 2026, from the surge in large-cap megadeals and the strategic pivot to ‘buy and build’ approaches, to the transformative role of AI in deal processes. We also delve into the challenges of geopolitical volatility, the influence of private equity’s massive capital reserves, and the sector-specific excitement around energy, defense, biopharma, and tech. Simon offers a deep dive into how these forces are redefining market strategies and what they mean for the future of dealmaking.
How do you see the recent wave of megadeals shaping the M&A landscape for 2026, and what’s driving this confidence in large-cap transactions?
I’m thrilled to talk about this because the momentum we’ve seen in 2025 is truly remarkable. The eight megadeals valued over US$10 billion that closed in Q3 alone—the highest since late 2018—signal a powerful return of confidence in large-cap dealmaking. This surge is fueled by a mix of pent-up demand after years of cautiousness, stock market highs that make equity swaps attractive, and financing costs that have stabilized enough to make these big bets feasible. I recall advising on a cross-border transaction in the tech space last quarter, where the buyer leveraged high stock valuations to fund nearly half the deal, showcasing how market conditions are emboldening acquirers. Beyond the numbers, there’s a palpable optimism in boardrooms; these deals aren’t just transactions—they’re statements of intent, signaling to the market that growth is back on the agenda. Looking to 2026, this trend is likely to sustain as long as interest rates don’t spike unexpectedly, setting a robust pipeline for even more ambitious plays.
What challenges do geopolitical tensions and tariff volatility pose to M&A in the coming year, and how are dealmakers adapting to protect value?
Geopolitical rifts and tariff swings are like navigating a storm at sea—you can’t avoid the waves, but you can adjust your course. For 2026, these uncertainties are top of mind, especially after the aggressive tariff policies we saw early in 2025. Dealmakers are now embedding resilience into their strategies, starting with much earlier integration planning during due diligence to anticipate supply chain disruptions or cost spikes from new trade barriers. I’ve seen acquirers in the manufacturing sector, for instance, stress-test deals by modeling tariff hikes of up to 20% on key imports, building contingency plans like alternative sourcing into their valuation models. There’s also a heightened focus on regulatory foresight—teams are bringing in geopolitical risk consultants to map out potential flashpoints before ink hits paper. It’s tense work, often late into the night poring over policy briefs, but it’s critical to safeguarding deal value when the ground shifts beneath you.
Can you unpack the shift toward ‘buy and build’ strategies over transformative single deals, and how this is influencing long-term growth?
The pivot to ‘buy and build’ is a fascinating evolution, driven by a desire for controlled, scalable growth rather than the high-stakes gamble of a single blockbuster deal. Acquirers are prioritizing bolt-on acquisitions or adjacent buys that enhance their core capabilities, minimizing integration risks while steadily expanding market share. I recently worked with a mid-sized insurer that acquired three smaller regional players over 18 months, each deal layering new customer segments onto their existing platform—it’s like building a house brick by brick rather than buying a mansion outright. This approach not only spreads out capital expenditure but also allows for iterative learning, refining integration with each transaction. For long-term portfolio growth, it’s a game of compounding value; these smaller wins often yield synergies that outpace the upfront costs, creating a more sustainable growth trajectory into 2026 and beyond. The downside is patience—CEOs feel the pressure to show quick wins—but the data shows this method often delivers stronger returns over a five-year horizon.
How is AI transforming the way corporates approach M&A, particularly in sourcing and integrating deals for 2026?
AI is nothing short of a revolution in M&A—it’s like having a tireless analyst who never sleeps. Corporates are using it across the deal lifecycle, starting with sourcing, where algorithms scan vast datasets to identify targets based on strategic fit, financial health, and even cultural alignment signals from public data. During due diligence, AI tools flag risks by analyzing contracts or predicting integration pain points, often cutting review times by weeks. Post-deal, it’s streamlining integration by mapping overlapping systems or predicting employee churn through sentiment analysis. I recall a tech merger where AI highlighted a hidden IP dispute in the target’s filings—something human eyes missed—that saved the buyer from a costly post-closing lawsuit. The challenge, though, is governance; without proper oversight, you risk over-reliance on tech, missing the human nuance in negotiations. It’s exciting, but there’s a learning curve, and I’ve seen teams wrestle with balancing AI insights against seasoned gut instinct.
With private equity holding over US$2 trillion in undeployed capital, how do you see their role evolving in M&A for the next year?
Private equity is poised to be a juggernaut in 2026 with that staggering US$2 trillion war chest waiting to be deployed. This capital is fueling fierce competition for quality assets, especially as exit options improve and debt markets loosen up. What’s really catching my eye is the rise of continuation funds, which are becoming mainstream—they allow PE firms to hold onto high-performing assets longer by rolling them into new vehicles while giving liquidity to existing investors. I advised on a deal last year where a fund used this structure to retain a star portfolio company in biopharma, extending their value creation timeline by three years while returning capital to LPs. It’s a win-win, but it requires meticulous investor communication to avoid misalignment. PE’s firepower will likely drive up valuations in hot sectors, and I expect their strategic patience with tools like continuation funds to redefine how long-term value is built in M&A.
What’s sparking the intense interest in energy, defense, biopharma, and tech for M&A in 2026, and how do you see these sectors evolving?
These sectors are buzzing for good reason—they’re at the intersection of innovation, necessity, and global demand. Energy is riding the wave of transition to renewables, with acquirers snapping up clean-tech firms to future-proof portfolios, while defense is hot due to geopolitical instability driving government contracts. Biopharma is seeing blockbuster interest as aging populations and R&D breakthroughs fuel growth, and tech, well, it’s the backbone of everything, especially with AI and cybersecurity needs exploding. I was involved in a biopharma deal last quarter where the target’s pipeline for rare disease treatments justified a premium that seemed astronomical—until you saw the projected market demand. For 2026, I anticipate energy deals will pivot even harder toward sustainability, with M&A as a tool to consolidate green tech. Defense may face regulatory scrutiny, slowing some transactions, while biopharma and tech will keep racing ahead, driven by innovation cycles that outpace other industries.
In the insurance sector, what’s behind the focus on reshaping platforms rather than diversifying, and what are the broader implications for 2026?
In insurance, the trend of reshaping platforms over diversifying is all about doubling down on core strengths in a hyper-competitive market. Rather than chasing unrelated lines, firms are using M&A to bolster existing capabilities—think consolidating regional brokers to dominate a niche or acquiring tech-driven underwriters to enhance risk models. I saw this firsthand in a transaction where a client acquired a specialty insurer to deepen their property and casualty footprint, completely revamping their pricing engine with the target’s data—it was like fine-tuning a race car instead of buying a new one. The broader implication for 2026 is a more focused, efficient industry, where scale in specific segments drives profitability over sprawling portfolios. However, it also means less experimentation; firms may miss out on adjacent growth opportunities if they’re too inward-looking. It’s a calculated trade-off, but the market seems to reward this discipline for now.
What is your forecast for M&A activity in 2026, and what key factors should dealmakers keep an eye on?
Looking ahead, I’m cautiously optimistic about M&A in 2026—it’s shaping up to be a busy year with sustained large-cap activity, private equity’s capital influx, and sector-specific tailwinds in energy, tech, and biopharma. The pipeline feels robust, buoyed by the late-2025 surge and stabilizing financial conditions, but there’s no ignoring the headwinds of tariff volatility and geopolitical uncertainty that could jolt valuations overnight. Dealmakers should laser-focus on early integration planning and scenario modeling to buffer against policy shifts, while embracing AI to sharpen their edge in sourcing and execution. I also foresee ‘buy and build’ continuing to dominate as a less risky path to growth, though I wouldn’t be surprised if a few transformative megadeals steal the headlines. Above all, agility will be the name of the game—those who can pivot fast in the face of regulatory or economic surprises will come out on top. It’s going to be a thrilling, if challenging, ride.
