Introducing The US Private M&A Report

OUR Q1 VIEW OF THE US PRIVATE M&A MARKET

Q1 2026 felt like a modest step forward for the U.S. M&A market but it was not without its challenges. While there has been some pickup in activity compared with the back half of 2025, the overall environment remains uneven. We’ve seen a number of processes start with momentum but ultimately stall or fall away, often driven by persistent valuation gaps between buyers and sellers — even for otherwise strong assets.

A big part of that dynamic continues to be broader market uncertainty. Ongoing geopolitical tensions, questions around the pace and impact of AI, and a still-evolving interest rate environment are all contributing to a more cautious tone. As a result, both strategics and sponsors are being selective and underwriting remains disciplined.

There are still pockets of activity, particularly for high-quality assets, and we’ve seen strategic buyers continue to pursue add-ons and targeted acquisitions. Private equity sponsors are active as well but not yet at levels that would suggest a full reopening of the market. Financing is available, but it’s not meaningfully easier to obtain or cheaper than it has been in recent quarters, a trend that continues to influence deal dynamics.

On structure, we’re continuing to see parties lean on tools like earnouts, rollover equity and tailored incentive arrangements to help bridge valuation gaps and get deals across the line.

REGULATORY UPDATES

Antitrust merger remedies endure as global scrutiny expands

The Trump administration signaled early in its second term that it would favor resolving merger reviews through negotiated remedies rather than seeking to block transactions outright. That approach was evident in 2025, as the Department of Justice and Federal Trade Commission (FTC) cleared nine mergers through settlement agreements. This trend likely will continue through 2026, offering greater predictability and reduced risk for dealmakers.

The current administration has been more open than the first Trump administration to both structural and behavioral remedies. In addition to traditional divestitures of assets, this administration has accepted commitments governing post-merger conduct for a defined period. For example, the FTC approved the merger of two major advertising agencies subject to commitments prohibiting them from steering advertising away from media publishers based on their viewpoints. As the administration gains more experience with negotiated resolutions, it may follow the European Commission and U.K. competition authorities in issuing formal guidance on acceptable remedies, further enhancing dealmakers’ ability to assess regulatory risk and structure transactions accordingly. While federal merger enforcement may be becoming more predictable, scrutiny at other levels of government continues to expand. At the state level, Colorado and Washington introduced new filing obligations in 2025 by adopting versions of the Uniform Antitrust Pre-Merger Notification Act and California has passed legislation that will take effect in 2027.

Internationally, Australia’s new merger control regime took effect on January 1, replacing a voluntary notification system with a mandatory framework more akin to that of the U.S. Australia’s rules can require filings even for transactions with a limited local nexus, underscoring the growing global reach of antitrust reviews.

Taken together, these developments highlight a dual reality for dealmakers: While negotiated remedies may reduce uncertainty at the federal level, the expanding patchwork of state and international merger review regimes makes early, coordinated global antitrust planning more important than ever.

CFIUS (re)sets priorities while another shutdown impacts CFIUS timings

At the close of Q1 2026, we are seeing several trends emerging, or re-emerging, regarding foreign investment and the national security priorities of the Committee on Foreign Investment in the United States (CFIUS).

In public remarks, new CFIUS head Chris Pilkerton echoed the president’s America First Investment Policy, confirming that the U.S. will remain “open for business,” including for foreign investment, but with CFIUS guardrails to protect against security risks arising from “foreign adversaries,” most notably China. Pilkerton, the Assistant Secretary for Investment Security at the U.S. Treasury Department, also indicated a potentially heightened use of the U.S. intelligence community and law enforcement to bolster CFIUS monitoring of non-filed inbound foreign investments — perhaps foreshadowing an increase in CFIUS investigations and filing demands.

Other initiatives include development of the Known Investor Program (KIP), which could streamline the CFIUS review process for foreign investors from U.S. ally and partner nations that are both frequent filers with CFIUS and able to demonstrate a “verifiable distance and independence” from foreign adversaries or threat actors. It is not clear whether the KIP, once implemented, will result in material time savings for such investors, although further details are expected now that the U.S. Treasury Department’s public comment period on the KIP is concluded.

Another U.S. Treasury priority is revamping regulations governing the Outbound Investment Security Program (OISP), whose technology and “country of concern” coverage (among other provisions) was expanded and codified by the Comprehensive Outbound Investment National Security Act (COINS Act). Several substantive changes to the OISP, per the COINS Act, are to be reflected in further U.S. Treasury regulations to be issued by March 2027. Pilkerton also plans to formalize OISP processes for identifying U.S. outbound investments for which no required notification was submitted or that are otherwise prohibited (similar to CFIUS procedures for inbound investments).

These changes are taking place against the backdrop of another U.S. government shutdown, this time a partial one that took effect February 14 after Congress was unable to agree on funding for the Department of Homeland Security (DHS). As DHS is a member of CFIUS, the partial shutdown is impacting CFIUS review timelines, with delays in the review of new filings and in CFIUS clearance of transactions currently under review, especially in transactions where DHS would generally lead the CFIUS process. The shutdown, now the longest in U.S. government history, may introduce timing uncertainty for any acquisition or investment for which CFIUS approval is a closing condition, especially if a CFIUS filing backlog develops in the wake of a prolonged shutdown.

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