M&A activity to accelerate this year despite war disruption, Goldman Sachs says

• Faster deal closings under the Trump administration have reduced regulatory uncertainty that investors faced during the Biden era, encouraging CEOs and boards to pursue strategic transactions more aggressively
• Goldman expects monetary easing, fiscal stimulus in developed economies, AI capital investment, and balanced U.S. regulation to drive M&A growth this year
• Solomon called for a 10-20 year 'modus vivendi' between the U.S. and China, noting their economies are deeply entwined, though meaningful dialogue has yet to produce significant agreements

Goldman Sachs Forecasts M&A Activity Acceleration Despite Geopolitical Tensions

Goldman Sachs CEO David Solomon announced on March 20 that the firm expects mergers and acquisitions activity to accelerate in 2026 despite disruptions from U.S.-Israeli military action against Iran. Solomon acknowledged the difficulty in predicting broader economic effects of the conflict but remains optimistic about a "more constructive operating environment."

Key Drivers of M&A Growth:

Goldman identifies several factors supporting increased deal activity: monetary easing, fiscal stimulus in developed economies, capital investment in artificial intelligence technologies, and a more balanced U.S. regulatory regime. The Trump administration's faster deal approval process has replaced the heightened scrutiny of the Biden era, encouraging CEOs and boards to pursue strategic transactions more aggressively.

Geopolitical Considerations:

Solomon cautioned that a protracted war or other exogenous events could alter current market sentiment. He emphasized the need for a long-term reset in U.S.-China relations, calling for both nations to reach a "new modus vivendi" for the next 10-20 years given their economic interdependence. President Trump recently traveled to Beijing to meet with President Xi Jinping as Iran tensions continue.

Market Context:

The announcement comes amid ongoing U.S.-Israeli military operations against Iran, which have created uncertainty in global markets. However, Goldman's investment banking leadership believes the current regulatory environment and economic conditions favor increased dealmaking activity.

Solomon noted that while there appears to be a roadmap for more meaningful U.S.-China dialogue, whether it will lead to significant agreements remains uncertain.