DealLawyers.com Blog

Wachtell recently issued “Mergers and Acquisitions — Reviewing 2025 and Looking Ahead to 2026”, in which, among other things, it identified dealmaking trends to keep an eye on in the new year.  Here are some of those trends:

– Spin-offs remained popular in 2025, and that trend is expected to continue with multiple large spinoffs expected to be completed in 2026, including Honeywell’s spin-off of its aerospace technology business. Tax rules for spin-offs continue to evolve as the Trump administration takes a more flexible approach than the prior administration.

– Contingent value rights (CVRs) have reemerged as consideration mechanisms in public deals; 27 deals this year have included a CVR, a nearly four-fold increase from 2024. Given the prevalence of CVRs in pharmaceutical and biotech M&A and the level of activity in those industries, we expect to continue to see more CVRs in 2026.

– Sovereign wealth funds, particularly those in the Middle East, remain active participants in major transactions, principally as equity investors in U.S. and European dealmaking. Such funds have been particularly active in pursuing strategic transactions in AI, data centers, semiconductors and sports and entertainment.

– Hostile and unsolicited takeovers and over-bids made headlines in 2025, including offers launched by Paramount Skydance for Warner Bros. Discovery, QXO for Beacon Roofing and Novo Nordisk for Metsera. These transactions are part of a modest increase in hostile and unsolicited M&A activity over the prior year, both in the U.S. and globally, in part driven by valuation fluctuations, sympathetic shareholders looking for exit opportunities and efforts to scale or secure “crown jewel” assets.

Wachtell also discusses several notable 2025 developments, including the reemergence of mega deals, the rise in PE deal volume, the growth in bank M&A, the evolving regulatory environment and the emergence of the federal government as a dealmaker.

– John Jenkins