By Dawn Kopecki
NEW YORK, Jan 9 (Reuters) - Dealmakers are set for another banner year in 2026 with a record number of deals in the pipeline, as CEOs seek out the safety of scale to weather mounting economic and geopolitical risks, JPMorgan's Global Head of Advisory and M&A, Anu Aiyengar, told Reuters in an interview.
Last year was the second-best on record for M&A activity, worth $5.1 trillion, despite stomach-churning market gyrations that followed U.S. President Donald Trump's shifting trade policies
and a government shutdown that halted U.S. IPOs for more than six weeks.
"We are in a world where the level of shocks to the system and the sources of shocks to the system are very broad," Aiyengar said.
"It's technology disruption, it's AI, supply chain, it's geopolitical risk, it's oil, it's energy, it's all of it."
Trump's second term has ushered in an era when once unprecedented policy changes now pose near-daily challenges for corporate CEOs. U.S. relations with China and Russia remain volatile as the Trump administration launches dramatic and risky military operations, including an attack on Iran's nuclear facilities last year and a military operation in Venezuela that ousted the country's president.
At home, Trump has clashed with state and local officials and faces increasing protests after ICE agents killed a 37-year-old Minneapolis woman in her car on Wednesday – the same day on which he vowed to block defense contractors from buying back stock if they did not speed up weapons production.
"If you are running a company, that amount of information that you have to process and deal with is enormous ... no one can actually deal with all of it and come up with the perfect answers," Aiyengar said, without referencing specific policy issues.
"Companies who have the scale are able to withstand that level of volatility better because you have more levers to pull," she added.
The economic and political uncertainty is giving rise to bigger and bigger deals. There were a record 68 deals worth $10 billion or more last year, twice the number in 2024, according to data compiled by LSEG.
JPMorgan, which ranked No. 2 in global M&A last year, advised on 27 of those, most recently as Warner Bros Discovery's banker in its $82.7 billion sale to Netflix - or to Paramount Skydance - and Kimberly-Clark's $50.6 billion purchase of Tylenol maker Kenvue.
Glencore confirmed Thursday that it is in early talks to be acquired by Rio Tinto, potentially creating the world's largest metals miner.
Rio Tinto is the world's biggest iron ore miner and is worth about $142 billion, while Glencore is valued at $65 billion as of the last stock market close.
Commodities will continue to be a hot sector to watch this year, along with technology and energy, she said. Consumer and healthcare companies are also looking at various tie-ups, she added.
In the past, M&A activity was largely driven by optimism about the economy or excess capital, but this time boardrooms are looking at ever larger combinations to help survive rising political turmoil, AI disruption, economic uncertainty and market volatility, she said.
"It reflects the mood. You don't want to get left behind. You know there are going to be all these shots that come at you, and all this volatility that's going to come at you."
(Reporting by Dawn Kopecki and Edmund Klamann)
