Wall Street eyes another blockbuster year of mega-deals after record $10B-plus deals in 2025

• Major deals included Netflix's $72 billion acquisition of Warner Bros. Discovery assets, Union Pacific's $72 billion Norfolk Southern merger, and Electronic Arts' $55 billion go-private transaction
• Corporate boards are acting with newfound urgency, fearing they'll miss opportunities if they hesitate - with dealmaking continuing even through traditionally slow periods like Thanksgiving
• Emerging trends for 2026 include increased crypto-related acquisitions, more corporate spinoffs, and growing participation from Middle Eastern sovereign wealth funds

2025 M&A Market Surges with Record Mega-Deals

Global M&A activity reached its strongest level since the pandemic in 2025, with a record 68 transactions exceeding $10 billion each. The average deal size climbed to nearly $227 million, reflecting renewed boardroom confidence amid a friendlier regulatory environment and diminished concerns over Trump's tariff policies.

Key Transactions:

• Netflix acquired Warner Bros. Discovery's studios and HBO Max for $72 billion, triggering a $77.9 billion hostile bid from Paramount Skydance for the entire company
• Union Pacific agreed to purchase Norfolk Southern for $72 billion, creating a transcontinental railroad (facing antitrust scrutiny)
• Electronic Arts announced going private in a $55 billion deal
• Kimberly-Clark (Huggies) agreed to acquire Kenvue (Tylenol) for $40 billion

Market Dynamics:

Dealmaking activity remained robust even during traditionally slow periods like Thanksgiving, signaling strong momentum. Companies are rushing to secure assets amid surging demand, with boards fearing missed opportunities if they hesitate.

2026 Outlook:

Wall Street expects the momentum to continue across industries. Key areas to watch include:

• Increased corporate spinoffs
• Growing crypto-related acquisitions as digital assets gain traction
• Rising capital flows from Middle Eastern sovereign wealth funds

Bank of America's Ivan Farman notes that large deals indicate CEO and boardroom confidence, while Kirkland & Ellis partner Jonathan Davis expressed "super bullish, but cautiously" optimistic sentiment. The combination of favorable regulatory conditions and corporate confidence suggests the mega-deal trend will persist into 2026.