Global M&A nears record as mega deals dominate

Global M&A value reached US$3.19 trillion in the first seven months of 2026, up 36% year on year and close to the January-to-July record set in 2021, according to LSEG. An update authored by Lucille Jones, senior manager, deals intelligence at LSEG, shows record values have coincided with fewer transactions. The pattern continues trends identified in LSEG’s recent H1 2026 M&A report.

More than 28,000 deals were announced worldwide between January and July, 10% fewer than a year earlier. Yet 48 transactions worth more than US$10bn each accounted for US$1.29 trillion, around 40% of total M&A value. The number of mega deals already exceeds the comparable 2025 total and is the highest recorded for the first seven months of any year.

Regional performance is similarly uneven. M&A involving targets in the Americas reached a record US$1.84 trillion, up 51%, while US targets alone attracted US$1.69 trillion, the strongest January-to-July total on record.

European activity rose even faster. Announced deals involving European targets reached US$773bn, 78% higher than a year earlier and the strongest first seven months in nearly two decades. UK targets accounted for 35% of European activity.

Asia-Pacific moved in the opposite direction, with announced value down 8% despite a rise in deal count. Japan recorded a 43% decline.

Cross-border M&A reached US$1.05 trillion, its highest January-to-July level since 2007. Almost half of cross-border target activity was concentrated in the US and UK, reinforcing the importance of those markets to this year’s rebound.

At sector level, technology remains the largest area for M&A, accounting for 23% of announced activity. Industrials and energy and power follow, with LSEG linking activity across all three areas to investment in artificial intelligence infrastructure, energy generation, industrial capacity and digital connectivity.

Bigger transactions place different demands on corporate balance sheets. Acquirers pursuing transformational deals need greater certainty over funding, liquidity and integration costs, while finance teams must weigh the strategic case for deploying capital against refinancing conditions and the impact on leverage. Companies with stronger balance sheets may therefore have more room to pursue large acquisitions than those operating with tighter funding capacity.

July activity moderated from the exceptional volumes recorded in May and June, but LSEG said the broader trajectory remains constructive as financing conditions improve and companies regain confidence in deploying capital. Advisers and financing banks are therefore seeing larger mandates even as volumes lag.

Attention now turns to whether strong deal values can be sustained through the remainder of 2026 and whether transaction volumes begin to recover. Financing conditions and corporate confidence remain supportive, but announced deal count is still running below last year despite the surge in capital being deployed.

Jones said: “The headline numbers point to a healthy M&A market, but the deeper story is one of concentration. Capital is flowing decisively back into M&A, yet increasingly towards a smaller group of companies, sectors and geographies that are shaping the next phase of global corporate strategy.”

 

Late B2B payments squeeze UAE working capital

Delayed B2B payments are increasing financing needs and reducing liquidity headroom for companies in the UAE, even as businesses extend more trade credit to support sales, according to Atradius. Its 2026 Payment Practices Barometer found that companies conduct an average 47% of B2B sales on credit, with nearly half reporting an increase in credit-based sales in recent months. Around three in five offer payment terms of up to one month, while roughly one in three allow between one and two months. 

Payment behaviour is deteriorating alongside that greater flexibility. Almost all companies surveyed reported late payments, with roughly two in five invoices settled after their due date. More than twice as many businesses saw delays increase as decrease, while bad debt write-offs now account for just over 2% of B2B receivables. 

Customer cash flow problems were the most frequently cited reason for late payment, selected by 49% of respondents. Banking delays followed at 27%, while internal approval delays and disputes over goods or services were each cited by 17%. 

Once invoices become overdue, collections can stretch well beyond the original terms. Some 43% of past-due payments were less than 30 days late, 26% were 31 to 60 days overdue, 17% were 61 to 90 days late and 15% had been outstanding for more than 90 days. 

Bad debt exposure also varies sharply. Some 59% of respondents reported bad debts below 1% of receivables, while 14% put the figure between 1% and 2%. Another 12% reported losses of 2% to 5%, while 15% said bad debts exceeded 5%. 

Working capital consequences are already visible. Some 47% of companies said customer payment risk had increased their financing needs, 46% reported reduced liquidity headroom and 38% said it made cash flow planning more difficult. Another 29% had delayed payments to their own suppliers. 

Businesses are responding with bad debt reserves, tighter credit management, credit insurance, upfront payment requests and early-payment incentives. Receivables finance and customer diversification are also being used to protect cash flow, although building reserves can itself tie up liquidity. 

Risk remains elevated despite some expectations of faster customer payments. Looking ahead 12 months, 46% expect default risk to rise further and 39% expect it to remain elevated, while 15% are unsure. Economic slowdown ranks as the leading threat to B2B payment behaviour, followed by inflation and cost pressures and higher interest rates. 

UAE companies therefore face an awkward trade-off: extending credit can support growth and customer relationships, but longer terms and worsening delays leave more cash trapped in receivables. Pressure can then travel through the supply chain as businesses borrow more, hold larger buffers or postpone payments elsewhere.

 

Global supply chain pressure eases before Hormuz disruption

Global supply chain pressures eased in July as manufacturers cut precautionary stockpiling and transport costs moderated, but shortages and production backlogs left businesses exposed to renewed disruption in the Strait of Hormuz, according to GEP.

Based on a monthly survey of 27,000 businesses, the Global Supply Chain Volatility Index showed a broad reduction in pressure before the latest escalation in the Middle East. Most responses were collected before shipping through the Strait of Hormuz was disrupted again and oil prices rose towards the end of the month.

Manufacturers reduced safety-stock building after inventories reached a three-and-a-half-year peak in the second quarter. Reports of stockpiling raw materials and intermediate goods because of price or supply concerns fell for the first time since January, while transportation costs dropped to their lowest level since March.

Demand also weakened. Factory purchasing volumes recorded their softest reading of 2026 so far, driven mainly by China and, to a lesser extent, the US. GEP said the boost from precautionary inventory building appeared to have faded as the third quarter began. Asia and North America nevertheless remained the strongest regions for purchases of raw materials and commodities.

Regional data showed Asia’s index falling to 1.37 from 1.95, its lowest since March, as Chinese purchasing slowed sharply. North America declined to 0.76 from 1.17, signalling a further easing in supply chain pressure.

Europe remained weaker. Its index dropped to 0.68 from 1.13, also the lowest since March, as demand for manufacturing inputs contracted further. UK pressure fell more sharply, with the index sliding to 0.30 from 1.05 as manufacturers reduced procurement and ran down stocks.

Lower headline pressure did not mean supply constraints had disappeared. Reports of critical materials and components in short supply fell only fractionally and remained high by historical standards. Manufacturers also continued to report rising production backlogs caused by missing inputs, leaving factories vulnerable if geopolitical disruption persists.

Labour was less of a constraint. Reports of backlogs caused by staff shortages remained broadly unchanged, suggesting workforce availability was not limiting capacity during July.

Survey timing gives the results particular significance for procurement and treasury planning. Companies entered the latest Strait of Hormuz disruption with less inventory building and lower transport-cost pressure than earlier in the year, but with unresolved shortages still running through manufacturing networks.

Renewed energy and shipping disruption could quickly reverse some of July’s improvement. Higher freight and fuel costs would feed into working capital, inventory decisions and cash forecasts, while persistent material shortages could force manufacturers to rebuild buffers they had only just started to unwind.

July therefore looks less like a clean return to normal than a brief easing in pressure before the next geopolitical test.

 

FinCEN ends beneficial ownership reporting for US companies

FinCEN has permanently removed beneficial ownership reporting requirements for US companies and US persons under the Corporate Transparency Act, formalising exemptions introduced last year. Effective from 14 August 2026, the final rule means millions of US businesses no longer have to submit beneficial ownership information to the Financial Crimes Enforcement Network. FinCEN will also delete information previously reported by individuals it reasonably believes are US persons.

Companies and individuals that obtained FinCEN identification numbers are no longer required to update or correct the information originally supplied to obtain those IDs. Separate changes remove the requirement for foreign companies to report US person “company applicants”, such as individuals who helped register the business to operate in the US.

Foreign pooled investment vehicles registered in the US will also be exempt from reporting beneficial ownership information for US persons who control the vehicle.

Reporting obligations have not disappeared entirely. Foreign entities that remain reporting companies must still provide beneficial ownership information for foreign individuals.

In practice, the change removes a compliance process that many US businesses had been preparing for or had already implemented. Companies can now reassess workflows for gathering, validating and updating ownership data where those processes were created specifically to satisfy FinCEN reporting requirements.

Finance, legal and compliance teams will also need to identify any internal records or procedures that were built around the Corporate Transparency Act and determine what can be retired or simplified. Businesses that previously filed information will not need to take action to remove US-person data from FinCEN’s database, as the agency says it will delete those records itself.

Foreign companies remain the main group with continuing obligations, although their reporting scope has narrowed. They will still need to identify and report relevant foreign beneficial owners while US persons and US company applicants are carved out of the regime.

 

Goldman sees policy shift as key to stronger yen

Japan’s yen could strengthen structurally over the coming years if domestic policy changes encourage investors to bring more capital back into Japanese assets, Goldman Sachs says. The currency has weakened 45% against the US dollar over the past five years and is around 25% undervalued on a long-term basis, Praneet Shah, global head of FX options trading at Goldman Sachs Global Banking & Markets, said on an episode of the Goldman Sachs Exchanges podcast.

Japanese investors have increasingly favoured foreign assets, attracted by higher returns and a stronger store of value. Goldman argues that reversing those flows will be central to any lasting recovery in the currency.

Recent US-Japan coordination produced the largest currency-market intervention in 15 years, helping stabilise the yen by forcing investors out of positions betting on further weakness.

Karen Fishman, senior FX strategist at Goldman Sachs Research, said the intervention had provided short-term support but warned: “If there's no subsequent policy shift, those existing pressures on the currency tend to reemerge.”

Shah described the intervention as a way to buy time while policymakers address the forces driving capital abroad. “If policymakers get the decisions right, I think they can reverse this trend and actually create some structural yen strengthening in the next few years,” he said.

Currency direction matters well beyond financial markets. A stronger yen would alter the value of overseas revenues for Japanese exporters, affect import costs and reshape FX exposures for multinational companies trading with Japan. Treasury teams may need to revisit hedge ratios and forecast assumptions if policy changes begin to shift the currency away from its current valuation.

Goldman’s longer-term case depends on policymakers making domestic assets more attractive to Japanese investors. Without that shift, Fishman’s warning suggests the same pressures that weakened the yen could return once the immediate effect of intervention fades.

 

Deutsche Bank gains European RMB clearing role

Deutsche Bank has been appointed by the People’s Bank of China as a renminbi clearing bank for Europe in Frankfurt, becoming the first foreign bank to receive the designation. The appointment allows Deutsche Bank to provide direct processing, clearing and settlement for cross-border RMB transactions involving European financial institutions and businesses. It will also connect local clients more directly with China’s payment infrastructure.

European corporates trading with China could gain a simpler route for moving RMB between Europe and mainland China, alongside improved access to offshore liquidity. Direct clearing may also reduce the number of intermediaries involved in payments, shortening settlement chains and making cash positions easier to track.

Frankfurt will become another offshore RMB clearing location within Deutsche Bank’s network, alongside centres including London, Singapore and Hong Kong. The bank said the new role will support payments, liquidity management, trade finance and investment flows denominated in the Chinese currency.

RMB clearing infrastructure matters as companies seek more flexibility over how cross-border trade is invoiced and settled. Businesses with suppliers, customers or subsidiaries in China may be able to hold and use RMB more efficiently, while avoiding unnecessary conversion into another currency before settlement.

Deutsche Bank has participated directly in China’s Cross-border Interbank Payment System since 2015. The latest designation extends that access by giving the bank a formal clearing role in Europe rather than relying solely on existing correspondent arrangements.

Operational benefits will depend on how widely European corporates use RMB in trade and treasury activity. Companies will still need to assess currency exposure, liquidity availability and internal controls before increasing the share of transactions settled in RMB.

Frankfurt’s role in China-Europe financial flows could also deepen as trade and investment links become more complex. A locally based clearing bank gives European institutions another route into RMB settlement while providing Chinese companies operating in Europe with closer access to euro-area banking infrastructure.

 

SSE raises £520m with Australian green bond debut

UK energy company SSE has entered the Australian bond market for the first time, raising A$1bn (£520m) through two green bond tranches. Issuance comprised A$600m of five-year bonds maturing in August 2031 with a fixed coupon of 5.6%, alongside A$400m of 10-year bonds due in August 2036 carrying a 6.3% coupon.

Demand reached 2.5 times the amount issued, creating what SSE said was the third-largest senior Kangaroo corporate orderbook on record. Kangaroo bonds are Australian dollar-denominated bonds issued in the local market by overseas borrowers.

Both tranches have been swapped back into sterling, giving SSE a weighted average funding cost of 5.7% across approximately £520m of debt with an average life of seven years.

SSE said the transaction broadens its access to international capital. Entering the Australian market gives the company another source of long-term funding as it continues to finance investment through a mix of senior and hybrid debt.

Its latest deal is SSE’s 12th green bond since 2017, taking outstanding green bonds issued by the company and its subsidiaries to £5.9bn.

During its 2027 financial year, SSE has now raised £1.1bn of hybrid bonds at an average cost of 4.6% and with an average life of 6.6 years. It has also issued £1.9bn of new senior debt at an average cost of 5.3% and an average tenor of 8.2 years.

Currency swaps allow the group to tap investor demand in another market while ultimately retaining sterling funding, adding another source of capital without leaving the company exposed to Australian dollar debt.

 

American Express expands virtual card controls for businesses

American Express is expanding access to virtual cards for US commercial customers, adding new ways to create and manage them through its corporate programme software and business travel payments. Eligible Corporate Program customers can now create, manage and use virtual cards through American Express @ Work, the platform used to administer corporate card programmes. The cards can be issued to employees, contractors and other authorised users for expenses including travel, office supplies and event vendors.

Businesses can set spending limits, timeframes, country restrictions and merchant category controls, giving finance teams more control over where and when cards are used. The @ Work platform can also integrate with ERP and expense management systems.

Eva Reda, executive vice president, Global Commercial Services Products at American Express, said: “Businesses want to simplify how they pay for things while maintaining control and visibility into spending across employee expenses, supplier payments and business travel. Virtual cards can help solve many of these challenges.”

American Express is also extending virtual card capabilities for US customers using its Business Travel Account through Conferma. Eligible users can create cards in the Conferma mobile app for expenses such as meals, retail purchases, car hire and rideshares during business trips.

Companies can apply spending and time limits, route card requests through approval workflows and capture transaction data and digital receipts for reconciliation. The arrangement also allows businesses to issue cards to infrequent travellers or employees without a traditional corporate card.

Greater use of virtual cards could help companies shift more expenditure onto approved payment methods while reducing personal card reimbursements and manual expense handling. Value will depend on how effectively transaction data flows into existing ERP and expense systems, and whether additional controls translate into cleaner reconciliation and better visibility over business spending.