M&A activity gaining steam heading into 2026, Indiana attorneys say

Although the overall mergers and acquisitions market struggled to get going earlier in the year, it rebounded in the third and fourth quarters, and some attorneys think 2026 could be an even stronger year for making deals.

Josh Hollingsworth, a partner in Barnes & Thornburg’s Indianapolis office, said it’s been a solid year overall for M&A activity despite the slow start.

The Deloitte 2026 M&A Trends Survey reported the aggregate value of deals in the U.S. increased significantly in the third quarter, reaching $598 billion, the highest in nearly four years and a 56% jump from the second quarter.

Uncertainty surrounding President Donald Trump’s tariffs was one key factor that stalled some deals, especially earlier in the year.

But in the broader M&A market this year, there were a lot of “megadeals,” which Hollingsworth described as those totaling $10 billion or more in value.

Globally, deals greater than $5 billion represented more than 75% of incremental deal value for the year as infrequent acquirers came off the sidelines, according to Bain & Company. In Indiana, Allison Transmission announced a $2.7 billion deal to buy Dana’s off-highway business.

Hollingsworth said he also saw a lot of mid-market deals among HVAC, plumbing and landscaping companies—direct-to-consumer businesses that were relatively insulated from tariffs.

Indianapolis-based Hope Plumbing was acquired by Memphis, Tennessee-based Redwood Services this year. Westfield-based Sun Valley Landscape and Snow was acquired by Lockport, Illinois-based Beary Landscaping.

Merger activity also was prevalent among technology companies, mostly driven by an increased interest in artificial intelligence. The biggest tech megadeal of the year was Google’s $32 billion purchase of cloud security firm Wiz.

Overcoming midyear doldrums

David Barrett, an executive partner in Faegre Drinker Biddle & Reath LLP’s Indianapolis office, said most people also were optimistic about M&A heading into 2025, given the economic outlook at the time and expectations of a more relaxed regulatory environment.

“I don’t think people could have predicted tariffs,” Barrett said.

He said merger activity among manufacturing and industrial sectors were particularly dragged down by tariffs.

But Barrett said he saw a lot of M&A activity this year in the financial services industry, which he chalked up to a more lenient regulatory environment.

In September, Muncie-based First Merchants Corp. announced a $241 million deal to merge with First Savings Financial Group Inc. in Jeffersonville. Earlier this year, Jasper-based German American Bancorp Inc. announced a $330 million deal to merge with Heartland BancCorp, headquartered in Whitehall, Ohio.

In May, Evansville-based Old National Bancorp closed its $1.4 billion deal to merge with Minnesota-based Bremer Financial Corp. 

Hollingsworth said the primary issue with tariffs and M&A was the uncertainty it brought to potential dealmakers.

“If there’s uncertainty, the easiest thing to do is wait,” Hollingsworth said

He said the market has stabilized in the latter part of 2025, with interest rates dropping after being relatively high.

Ralph Caruso, a Taft Stettinius & Hollister partner and chair of the firm’s business group, said, overall, it had been a steady year for M&A, with him seeing a lot of interest in data centers and service industries.

He said nine months ago, there were some deals that weren’t getting done because of tariff-related concerns, but those fears have subsided.

“That kind of ‘we are not open for business’ atmosphere is not happening any more,” Caruso said.

What will 2026 bring?

Some attorneys and other market observers feel 2026 will shape up to be a strong year for M&A, based on recent upward trends driven by private equity activity and lower interest rates.

  “For both corporate and PE (private equity) dealmakers, significant majorities expect increases in both the number of deals and the aggregate value of deals they will transact in the next 12 months,” according to the Deloitte 2026 M&A Trends Survey of more than 1,500 dealmakers.

The survey shows that  90% of private equity respondents and 80% of corporate respondents expect their organizations to complete more deals next year.

Caruso said one of the biggest M&A drivers for his practice involves private equity, and he expects 2026 to be a robust year, if not a boom year.

Larry Tomlin, a partner at Amundsen Davis, said a large part of his practice deals with financial institutions. He saw overall activity start to pick up mid-year, something he hopes will carry over into 2026 for banks.

Tomlin said tariffs could have some impact next year,  but he noted he’s keeping a close eye on what happens with interest rates.

“I’m more optimistic going into 2026 than 2025,” Tomlin said.

Hollingsworth said that even though M&A activity has picked up in the last two quarters of 2025, there are still some long-term questions about the effects of tariffs.

Still, he said he thought 2026 would be a good year for M&A, possibly even comparable to the banner year of 2021.

Hollingsworth noted there is significant pent-up demand, with some private equity firms having holdings they needed to sell.

Barrett said he’s optimistic about 2026, although he doesn’t think it will be on the scale of 2021.

Like Hollingsworth, Barrett expects to see a lot of private equity divestitures next year.

But the Faegre Drinker attorney said he’s heard a lot of differing perspectives on AI as an investment, calling it a “wild card.”

Barrett said there are questions about whether anyone beyond the biggest tech companies will invest in AI, given how expensive the technology is, and whether investors are going to continue to pour money into that space.