The record-breaking deal spree that defined the first half of 2026 has lost its momentum. Global mergers and acquisitions totaled $993 billion in the third quarter, a 41% plunge from the second quarter and the first time quarterly deal value has fallen below $1 trillion since the second quarter of 2025, according to data compiled by LSEG.

Just 10 megadeals worth more than $10 billion were announced in the quarter — the lowest count since the fourth quarter of 2024 — as acquirers and their bankers confronted a tougher borrowing environment. The 10-year U.S. Treasury yield has been pinned near its highest levels since 2007, and that higher cost of capital is squeezing the math behind even well-financed takeovers, according to a report from The Globe and Mail.

"At the margins, [higher yields] make valuations sometimes a little tougher to quantify," said John Collins, global head of M&A at Morgan Stanley.

Still a record year — just a slower back half

The slowdown doesn't mean dealmaking has died. Year-to-date global M&A still stands at $3.9 trillion, up 28% from the same period in 2025 and the highest nine-month total since 2001. Private equity-backed buyouts are running at their strongest year-to-date pace since records began in 1980, and initial public offerings have raised roughly $215 billion so far this year, excluding SPACs — the best IPO haul since 2021.

Geography told its own story in the third quarter. Dealmaking in the United States and Europe fell sharply, while Asia-Pacific M&A climbed to $242 billion, up 8% from the prior quarter and 36% from a year earlier, as regional conglomerates and sovereign funds kept writing checks even as Western boards grew more cautious.

Two of the period's biggest live deals illustrate the mood: Banca Monte dei Paschi's roughly $32 billion pursuit of rival Italian lender Banco BPM, and Gold Fields' $25.7 billion bid for Australia's Northern Star Resources — both sprawling, all-stock-heavy combinations of the kind that get easier to justify when a target's own currency, not fresh borrowed cash, is doing the heavy lifting.

Dealmakers insist the pullback is a pause, not a reversal. "Boards feel a greater urgency to pull the trigger on strategic deals," said Carsten Woehrn, Goldman Sachs' co-head of M&A for Europe, the Middle East and Africa. Sarah Jones, global head of corporate at law firm Clifford Chance, framed the third-quarter dip as "a normalisation rather than an end of a cycle," while Charlie Bouckaert, JPMorgan's global head of M&A, pointed to artificial intelligence spending as a structural tailwind heading into next year, predicting 2027 would be "another robust year" for dealmaking regardless of where rates settle.

For now, though, the math is straightforward for any corporate board weighing a takeover: borrowing costs near their highest in nearly two decades mean every billion-dollar deal has to clear a higher bar to pencil out — and in the third quarter, fewer of them did.