BREAKINGVIEWS-Get ready for the biggest M&A deal ever

By Jeffrey Goldfarb

NEW YORK, Dec 16 (Reuters Breakingviews) - It’s go big or go home for dealmakers. As of November 2025, acquisitions valued at more than $10 billion apiece were on pace to reach a new high, even as the total number of transactions tumbled. The jumbo trend, powered by abundant capital and emboldened CEOs, sets the stage to break individual price-tag records achieved a quarter-century ago by British telecom titan Vodafone and erstwhile internet pioneer America Online.

An initially sluggish M&A rebound gathered steam in 2025, after U.S. President Donald Trump’s chaotic and jarring tariffs in April took somewhat clearer shape. By the end of November, worldwide merger activity had reached some $4 trillion, more than 40% higher than during the same span a year earlier and the most since the post-pandemic spike in 2021, according to LSEG data.

The bidding war for Warner Bros Discovery WBD.O led the way, after Paramount Skydance PSKY.O lobbed in a 12-digit offer for the media conglomerate in early December. Railroad operator Union Pacific UNP.N agreed to pay $88 billion, including debt, for rival Norfolk Southern NSC.N, while videogame developer Electronic Arts EA.O became the largest-ever buyout at $55 billion. The mega-deal trio had plenty of company, thanks in part to the relentless rise in stock prices. Although the roughly 44,000 total transactions represented the lowest tally since 2016, there were 63 agreements unveiled with 11-digit values, a new high for the first 11 months of any year.

Wall Street expects much more to come. A brain trust of Morgan Stanley equity and credit strategists and analysts united at the end of October to declare that one of the investment bank’s “core house calls is for a significant, multiyear uplift in global M&A.” They predict a staggering, record-breaking $7.8 trillion of volume in 2027.

Such optimism is understandable, even if overdone. Trump’s erratic leadership represents both an enabler of, and threat to, any fresh surge in corporate consolidation. His various regulatory and trustbusting rollbacks clear the way for boardroom confidence, while trade wars and immigration crackdowns may squeeze economic growth and rattle investors. The president’s inclination to personally meddle in deals, such as U.S. Steel’s with Nippon Steel 5401.T, will also trigger some hesitation.

“There is a strategic imperative to be global, big, diversified,” Doug Petno, the co-CEO of JPMorgan’s commercial and investment bank, said in September. “There’s also a sense that you have a finite window of time to complete large M&A before the regulatory sentiment may shift back.”

Add to that market dynamic lower borrowing costs, restive chief executives, healthy corporate balance sheets, the quest for technological capabilities, the availability of credit and some $4 trillion burning holes in buyout barons’ pockets. Noetica, whose artificial intelligence helps lawyers track deal terms during negotiations a month or two before announcement, recorded a 40% monthly surge in activity in October, a strong signal there’s plenty in the pipeline. Moreover, despite the recent uptick in mergers, the volume remains below its long-term proportion of GDP, further fueling the idea that it will be a very busy 2026.

These same conditions make it just as likely that one intrepid CEO will etch their company’s name into the annals of M&A. In late 1999, as the tech bubble inflated, Vodafone agreed to buy Germany’s Mannesmann for more than $200 billion to create the world’s largest mobile operator. Only two months later AOL stunned the corporate world with its $180 billion takeover of the storied Time Warner media empire. No other deal since has come close to those sums, perhaps because both turned out to be so financially ruinous.

It’s hard to account for ambition, ego and hubris, however. These sorts of factors have a way of triumphing, especially when the theoretical economics and strategic rationale are allowed to overshadow any potential cultural clashes and integration challenges, alongside the well-documented history of mega-merger letdowns. There’s no indication that any such transaction is in the works, but Breakingviews has taken the liberty of imagining a few possibilities for 2026, using equity values from mid-November.

Telecom operators hold four of the top 10 biggest-deal spots, so it’s as good a place to start as any. Verizon Communications VZ.N has a new CEO in Dan Schulman, who helped swashbuckling entrepreneur Richard Branson build and sell Virgin Mobile USA and then ran PayPal as it split from online auctioneer parent eBay. Slow growth and steady operating profitability have left shareholders in $175 billion Verizon with a total return of just 50% over the past decade, compared to 280% for the S&P 500 Index. Combining media and wireless has been a repeat dud for the industry, but maybe Schulman’s e-commerce knowhow would make a merger with similarly sized and faster-growing $195 billion Shopify SHOP.TO look appealing.

After a long hiatus, banks are back on the acquisition trail. One that’s reshaping itself is UBS UBSG.S, under CEO Sergio Ermotti and Chairman Colm Kelleher. They already swallowed crosstown competitor Credit Suisse, but the Zurich-based lender is constrained by Swiss capital rules and politicians. Joining forces with financial services colossus Charles Schwab SCHW.N would, in one fell swoop, enable UBS to move its domicile, bulk up in U.S. money management and follow a similar playbook, albeit on a far bigger scale, as rival Morgan Stanley MS.N, which bought online brokerage E*Trade for $13 billion in 2020.

Big Tech is also feeling renewed confidence to go shopping in the eras of Trump and AI. Alphabet GOOGL.O, for example, revived its previously torpedoed plan to buy cybersecurity company Wiz and received clearance from U.S. trustbusters for the $32 billion deal. And even as Google’s owner claws its way through the cutthroat artificial intelligence battle, it is in a self-driving race with its Waymo division too. In that regard, $175 billion Uber Technologies UBER.N might look like a tempting target.

Finally, as manufacturing bases and trading alliances shift, industrial conglomerates have been pursuing structural makeovers as aggressively as any sector. In that sense, a merger between Germany’s Siemens SIEGn.DE, at $200 billion, and France’s Schneider Electric SCHN.PA would be a triumph of political and automation alignment. It’s also a more plausible notion these days, with Brussels increasingly supportive of Europe building internationally competitive goliaths. There’s a limited pool of candidates eligible to claim the M&A crown, but there’s a good chance a new reign will begin in 2026.

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This is a Reuters Breakingviews prediction for 2026.