Corporate M&A - Mid Year 2026 opportunities and challenges
Following on from our original overview highlighting the challenges and opportunities that mergers and acquisition face in 2026, the Stephenson Harwood London Corporate M&A team share their insights and reflections in their latest market update.
From horizon-scanning for H2 2026, to a snapshot of the team's deal activity so far this year, the update is a helpful read for any corporates considering their next six to twelve months, you can download the latest highlights here.
Doing deals in uncertain times
Market uncertainty continues to shape deal activity, with investors becoming more selective and prioritising quality and resilience. UK equity valuations remain discounted compared to the US and, in some sectors, to parts of Europe, continuing to attract significant overseas investment. Despite concerns about the broader economic outlook, successful fundraises - such as the £137 million Seraphim Space Investment Trust deal - signal renewed confidence and a positive outlook for the second half of 2026.
Unfair Dismissal – Employment Law Risks
With significant changes in unfair dismissal rights coming into effect on 1 January 2027, the increased risks around senior hires and exits remains a significant concern for investors and employers. The evolving landscape continues to affect business operations and risk strategy. Proactive management is essential. For practical guidance, connect with our employment experts for tailored advice.
Future-Proofing Investments - AI & Rising Rates
The era of cheap credit is over and AI is disrupting several sectors previously favoured for PE investors.
Investors are now prioritising businesses with unique, proprietary data or which are otherwise resilient to AI. Building a “moat” around investments is essential to protect value.
Growth Sectors: Defence, Aerospace, Energy, Infrastructure
Investment focus is continuing to shift towards sectors with strong growth prospects and resilience against technological disruption. Defence, aerospace, energy, and infrastructure are attracting significant capital, with deals like the All Space acquisition and Seraphim Space Investment Trust fundraise underscoring market optimism. These sectors offer positive growth stories and opportunities for clients looking to diversify and strengthen their portfolios.
