Global M&A Falls Below $1 Trillion in Q3 as Borrowing Costs Rise

The global M&A boom that defined the first half of 2026 ran into a wall of higher borrowing costs in the third quarter, with deal value tumbling to levels the market hasn't seen since early last year.

According to LSEG data cited by Reuters, global merger and acquisition activity totaled $993 billion in the three months through September, down 41% from the second quarter and the first sub-$1 trillion quarter since Q2 2025. The culprit isn't hard to identify: rising bond yields. The 10-year U.S. Treasury yield reached roughly 5.34% during the quarter, its highest level since 2002, squeezing the financing math on leveraged transactions and forcing buyers to reprice assets.

Megadeal activity took the sharpest hit. Only 10 transactions above $10 billion were announced in the quarter, the fewest since Q4 2024. The short list included Banca Monte dei Paschi di Siena's $32 billion bid for Banco BPM and Gold Fields' $25.7 billion offer for Northern Star Resources. Both are cross-border plays, which tracks with where bankers say the appetite is running.

"We're seeing a fair amount of appetite from US companies thinking about acquisitions in Europe for the first time, taking advantage of a strong dollar," JPMorgan's global head of M&A, Charlie Bouckaert, said in comments reported by Reuters. He added that investment into the U.S. is also attracting interest from buyers chasing higher domestic growth.

Zoom out and the picture is less grim. Year-to-date global M&A value reached $3.9 trillion through September, up 28% from the same period in 2025 and the highest level since 2001, according to LSEG data. The number of deals tells a different story: transaction count fell 8% year-over-year, a level not seen since 2020. Fewer but larger deals is a pattern that's defined this cycle from the start.

LSEG separately reported that the first half alone set an all-time high at $2.85 trillion, even as deal counts fell to a six-year low. The implication is clear enough: the recovery has been an institutional and corporate-buyer story, not a broad market reopening.

Technology remains the engine. Stake purchases in tech firms accounted for roughly 24% of year-to-date activity, according to LSEG figures. The AI infrastructure buildout is a direct driver, with data center and chip-related transactions inflating both count and average deal size in that sector.

The regional split in Q3 is worth noting. Asia-Pacific bucked the global retreat: deal value there hit $242 billion in the quarter, up 8% from Q2 and 36% from the third quarter of 2025. The U.S. and Europe both cooled. Private equity-related M&A hit an all-time year-to-date high since records began in 1980, though Q3 alone decelerated from the prior year's pace.

The rate question is the one every M&A banker is threading right now. Energy costs pushing inflation higher, Treasury yields resetting expectations for where rates settle, and deal financing that was structured on a different rate assumption, that combination is what compressed Q3. Whether Q4 recovers depends heavily on whether the bond market stabilizes. Forward guidance from bankers is optimistic. The LSEG data is more cautious.

Sources cited:
- Reuters / LSEG (via Investing.com) (https://www.investing.com/news/stock-market-news/global-ma-deal-rush-fades-in-third-quarter-as-rising-borrowing-costs-bite-4928161)
- Economy Middle East (https://economymiddleeast.com/news/global-ma-falls-41-percent-to-993-billion-in-q3-as-borrowing-costs-bite-while-2026-deal-value-still-reaches-3-9-trillion/)
- Finimize (https://finimize.com/content/global-ma-slipped-below-1-trillion-in-q3)
- Traders Union (https://tradersunion.com/news/financial-news/show/3615915-global-ma-volumes-fall-q3/)
- Global Banking & Finance Review (https://www.globalbankingandfinance.com/global-m-deal-rush-fades-third-quarter-rising-borrowing/)
- BigGo Finance (https://finance.biggo.com/news/b1418f59-72ba-4063-acfa-1aa201a9f577)