UK M&A value jumped 107% in the first half of 2026 despite the number of deals falling by 13%
Ten transactions accounted for almost two-thirds of total UK deal value
PwC identifies a ‘concentration premium’ as investors compete for a smaller pool of highly sought-after assets
The value of UK M&A more than doubled to £124.2bn in the first half of 2026, even as the number of announced deals fell 13% to 1,301, according to PwC’s latest UK M&A Mid-Year Outlook.
The rise was heavily concentrated in a handful of large transactions, with just ten deals accounting for almost two-thirds of total value. The figures point not to a broad-based recovery, but to a market in which investors are deploying significantly more capital into businesses they believe are best positioned for long-term structural change.
Nicola Preedy, Head of Deals at PwC UK, said:
“While capital may be abundant, conviction is scarce.
"Investors are deploying larger amounts of capital into a smaller number of businesses they believe are best placed to benefit from structural change and long-term growth trends.
"For boards and management teams, the question is increasingly simple: are we positioned where future value is being created?”
The concentration premium
The ‘concentration premium’ reflects intense competition for a relatively small group of businesses with strong market positions, specialist expertise and clear opportunities for future growth. These assets are attracting a disproportionate share of investment even as overall deal volumes remain subdued.
The pattern echoes a trend PwC is seeing globally but is particularly pronounced in the UK, where premium assets continue to attract strong competition despite a softer deal market overall.
Four sectors attracted the largest concentrations of UK deal value in the first half:
Consumer Markets: £39.2bn
Financial Services: £35.6bn
Technology, Media and Telecommunications (TMT): £14.8bn
Health Industries: £13.0bn
The drivers vary across each sector.
Financial services activity is increasingly being driven by technology modernisation, more efficient use of capital and changing customer expectations. TMT investment continues to focus on AI-enabled software, data and digital infrastructure, while healthcare is benefiting from competition for innovation, intellectual property and future growth.
Consumer markets present a different picture; much of its increase was driven by a small number of major strategic transactions and portfolio actions rather than a broad recovery in consumer-facing M&A.
AI creates a new valuation divide
The analysis suggests AI is beginning to create a new divide in how businesses are valued.
Buyers increasingly need to understand whether AI could create new revenues, improve margins and strengthen a target’s competitive position or disrupt its products and put existing profit pools under pressure.
That is particularly visible in technology, where TMT deal value increased 43% to £14.8bn, with capital continuing to target AI-enabled software, digital infrastructure and data platforms.
But investors are becoming more selective. Businesses with proprietary data, embedded workflows and high switching costs are giving buyers greater confidence, while those more exposed to AI-driven substitution face greater scrutiny.
Andrew McKechnie, Deals Clients and Markets Officer at PwC UK, said:
“The highest bidder doesn’t always win anymore. Certainty has become a currency in M&A.
“Buyers that can move quickly, reduce execution risk and demonstrate how they will create value from day one are putting themselves in the strongest position.
“Preparation is becoming part of the price. As a result, we expect concentration in UK M&A to persist, with deal values remaining high relative to volumes as investors continue to deploy capital selectively. A broader recovery in activity may come, but competition for the most sought-after assets is likely to remain intense.”
Outlook
The report says that AI is likely to widen the gap between businesses positioned to benefit from disruption and those more exposed to it, while specialist investors and strategic corporates with deep sector expertise are expected to retain an advantage.
Ends
Notes
PwC’s Global M&A Industry Trends is a bi-annual analysis of global deals activity across eight industries — consumer markets; energy, utilities and resources; financial services; health industries; industrials and services; private equity and principal investors; real estate and real assets; and technology, media and telecommunications. Read more here; https://www.pwc.co.uk/services/value-creation/insights/mergers-and-acquisitions-trends.html
About the data: Our commentary on M&A trends is based on data from industry-recognised sources and our own independent research. Specifically, deal volumes and values referenced in this publication are based on officially announced transactions, excluding rumoured and withdrawn transactions, as provided by the London Stock Exchange Group (LSEG) as of 30 June 2026.
About PwC
At PwC, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We are a tech-forward, people empowered network with more than 370,000 people in 149 countries. Across audit and assurance, tax and legal, deals and consulting, we help build, accelerate and sustain momentum. Find out more at www.pwc.com.
About PwC
At PwC, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We’re a tech-forward, people-empowered network with more than 364,000 people in 136 countries and 137 territories. Across audit and assurance, tax and legal, deals and consulting, we help clients build, accelerate, and sustain momentum. Find out more at pwc.com.
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