Surge in Transaction Insurance Signals Resilient Global M&A Appetite

Global mergers and acquisitions (M&A) are set to experience a substantial revival in 2026, supported by renewed executive confidence and focused strategic investment. However, to navigate persistent regulatory scrutiny, geopolitical friction, and valuation friction, corporate buyers and institutional investors are increasingly turning to specialized transactional risk insurance to safeguard capital deployments.

According to the fourth edition of the Global M&A Trends and Risks report, published jointly by global law firm Norton Rose Fulbright and financial intelligence provider Mergermarket, 58% of surveyed executives expect their deployment of Representation and Warranty (R&W) and Warranty and Indemnity (W&I) insurance to increase this year compared with 2025. Within this cohort, 32% anticipate a significant rise in adoption. Demand for these risk-mitigation instruments is especially prominent across emerging growth markets in South Asia, Southeast Asia, and Africa, where acquirers rely on financial guarantees to bridge negotiation gaps in complex cross-border transactions.

Rebounding Market Confidence and Core Growth Engines

Market sentiment across the global dealmaking community has improved noticeably. Overall, 52% of business leaders forecast an increase in international M&A activity in 2026 compared to the previous year—a substantial jump from the 38% recorded in the 2025 report. Crucially, 20% of respondents anticipate a marked surge in overall deal volumes over the coming twelve months.

The technology sector remains the pre-eminent catalyst for cross-border expansion, with 67% of market participants identifying tech assets as their primary target, comfortably outstripping traditional sectors such as industrial manufacturing and energy infrastructure.

Within the tech domain, artificial intelligence (AI) serves as the principal investment driver:

• Market Attraction: 78% of dealmakers identified AI assets as offering the most compelling opportunities this year, representing a sharp increase from 60% in 2025.

• Target Preferences: 24% of all respondents—and 38% among private equity investors—are actively seeking targets that integrate substantial AI capabilities into their operations.

• Pure-Play Targets: A further 14% of buyers are specifically targeting dedicated, pure-play AI enterprises.

Beyond technology, private equity dry powder (unallocated capital) stands as a vital engine for transaction flow, cited by 48% of participants as a top-three market driver. Industry consolidation (45%) and corporate divestments of non-core assets (37%) are also expected to generate consistent deal flow worldwide.

Regional Outlook and Liquidity Dynamics

Optimism is strongest across mature Western economies. In the United States, 48% of respondents expect a significant rise in deal volume, whilst 43% hold identical expectations for European markets. Canada displays the highest domestic confidence, with 57% of participants forecasting an uptick in transactions. Sentiment is similarly strengthening across the Asia-Pacific region, underpinned by corporate restructuring, supply chain realignment, and non-core divestments.

On capital availability, private credit has established itself as a foundational pillar of modern deal structure:

• 86% of respondents expect private debt to remain a primary source of M&A funding over the next two years.

• 50% foresee easing financing conditions, including 19% who anticipate a substantial improvement in borrowing terms.

Key Barriers to Transaction Execution

Despite widespread optimism, dealmakers encounter a demanding operational environment. For the first time in recent years, valuation gaps between buyers and sellers have emerged as the single largest impediment to completing deals, cited as a top-three barrier by 48% of respondents. This issue outranks broader geopolitical uncertainty (39%) and liquidity constraints (37%).

On the regulatory front, antitrust enforcement presents the most formidable obstacle, capturing an average of 35% of top-two responses across regions. Compliance with international sanctions and anti-corruption frameworks follows at 32%, with foreign direct investment (FDI) screening procedures cited by 26%.

Reflecting on the survey findings, Raj Karia, global head of corporate, M&A and securities at Norton Rose Fulbright, noted that dealmakers are returning to disciplined, strategy-driven transactions after a period of economic instability. He stressed that whilst geopolitical and regulatory pressures persist, institutional investors are adapting through flexible financing, tailored risk management, and strategic allocations to high-growth sectors such as artificial intelligence.