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Aileen Chuang

The mergers and acquisitions (M&A) market is expected to have its best year ever, with artificial intelligence dominating activity despite recent volatility in technology stocks and broader jitters across assets, according to senior investment bankers at Citigroup.
Market participants worldwide faced a repricing in the digital economy and a wave of sell-offs across tech stocks, commodities and cryptocurrencies last week as investors grappled with the implications of AI. However, the turmoil could lead to winners and losers across sectors, with both investors and companies asking fundamental questions, said the bank’s global co-head of M&A, Guillermo Baygual.
“We’re seeing a general correction that doesn’t fully distinguish winners from losers these last few days,” he said on Friday during a visit to Hong Kong. “You still have valuations that are healthy, and you have a market that is still constructive.”
“Deals are still getting done and will continue to get done,” said Colin Banfield, Citigroup’s head of Asia-Pacific M&A, citing several AI-related infrastructure mandates in the bank’s pipeline. “While valuations might have adjusted in the short term, the long-term relevance of AI is unquestionable.”
Last week, private equity giant KKR and telecommunications firm Singtel agreed to buy the remaining 82 per cent stake they did not already own in Singapore’s ST Telemedia Global Data Centres, valuing the digital infrastructure operator at S$13.8 billion (US$10.9 billion). Citigroup was the lead financial adviser to KKR and Singtel in the transaction, which was Singapore’s largest M&A deal in four years.
The AI theme would dominate the M&A market and continue to drive the M&A agenda over the next few years, said Baygual, who joined the US bank in September after a more than 25-year career with JPMorgan Chase.
“We expect 2026 to be the strongest year ever for M&A, as everything is firing on all cylinders,” Baygual said. He cited high corporate and investor confidence, supported by solid economic growth, low inflation, ample private equity capital and relatively cheap debt, despite some geopolitical uncertainties.
“It is a perfect environment to deliver a record year in M&A,” Baygual said. “But all of these will be subject to what happens with AI. AI can disrupt the sentiment [in the] short term.”
“Understanding how to differentiate between [winners and losers], where to deploy capital, and how to pre-empt the consequences will become increasingly important and will start to shape M&A dynamics.”
M&A deal activity in 2025 rose 40 per cent to around US$4.9 trillion globally, just behind the US$5.6 trillion record in 2021, according to a Bain & Co report.
“The tech sell-off is weeding out speculation, leaving serious capital focused on tangible assets and technologies with clear paths to value,” said Federico Bazzoni, chairman and CEO of Eight Capital Partners. “It is sharpening the focus and creating a multi-speed market where specific sectors directly tied to AI capabilities, infrastructure and strategic transformation are poised to benefit significantly in 2026.”

Technology and digital infrastructure were set to gain the most from M&A activity in 2026, led by strategic megadeals in data centres, semiconductors, cybersecurity and AI software platforms, Bazzoni said.
Energy, utilities and resources should also benefit as surging power demand from AI and data centres fuelled acquisitions in power utilities and renewables, he said. Industrials, manufacturing and healthcare were also likely to be active, as companies sought AI-enabled capabilities in operations, supply chains and drug discovery, he added.
M&A pipelines would be structurally different from past hype cycles, with AI “no longer just a valuation multiplier” but “a core strategic driver forcing CEOs to acquire capabilities”, said Bazzoni.
“Like most super-cycles, all that glistens is not AI gold, and investors are increasingly aware of the need to identify what are high-value opportunities, and what is overblown AI hype,” said Edward Freeman, partner and Asia head of global transactions at law firm Freshfields. “Some dampening of the hype is likely to reveal the genuinely high-value targets, and demand will remain strong for those.”
The US and China would be the key markets to watch as technological acceleration played to the strengths of both economies in terms of capital, including intellectual capital, and in how they supported growth, Citigroup’s Baygual said.
“We see many different aspects of Chinese M&A taking momentum over time,” he said. Key developments included increased activity between China and the Middle East, as well as renewed confidence among private equity firms driven by the reopening of the Chinese and Hong Kong capital markets.
“We expect greater international PE activity in China, and likewise more Chinese PEs investing abroad, particularly in Europe, where they bring sector expertise and synergies,” Baygual said. Chinese PEs could help European consumer, healthcare and tech firms tap China’s market and leverage their AI and tech expertise, he added.


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Mergers & Acquisitions

M&A market ‘firing on all cylinders’, headed for record year, Citigroup says

Guillermo Baygual, Citigroup’s global co-head of mergers and acquisitions, pictured in Hong Kong on February 6, 2026. Photo: Jonathan Wong

Data centres – like this one in Vernon, California, pictured on October 20, 2025 – will be driver of M&A megadeals in 2026, according to Eight Capital Partners CEO Federico Bazzoni. Photo: Getty Images

Tech sell-off rattles investors with cross-asset volatility set to linger

Analysts are warning that  heightened volatility across asset classes could persist for months. Photo: Getty

Investors have moved beyond AI hype and are now rigorously testing business models, analyst say. Photo: Reuters

Fosun Pharma’s US$1.55 billion Eisai deal signals shift to long-term partnerships

A view of the Shanghai facility of Fosun Pharma’s biopharma unit Henlius. Photo: Handout

The Fosun Pharma pavilion at the China International Import Expo, November 6, 2026. Photo: Daniel Ren

China’s Anta snags Puma from France’s Pinault family in US$1.8 billion deal

The acquisition of Puma will accelerate Anta’s multi-brand globalisation strategy, according to the Chinese sportswear brand. Photo: Reuters

The deal adds to Anta’s string of acquisitions since 2018. Photo: Getty Images

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Confident companies and investors, solid economic growth, low inflation and ample capital drive outlook, bank’s global M&A co-head says


Confident companies and investors, solid economic growth, low inflation and ample capital drive outlook, bank’s global M&A co-head says.


M&A market ‘firing on all cylinders’, headed for record year, Citigroup says

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Confident companies and investors, solid economic growth, low inflation and ample capital drive outlook, bank’s global M&A co-head says

Confident companies and investors, solid economic growth, low inflation and ample capital drive outlook, bank’s global M&A co-head says