Goldman Sachs predicts blockbuster 2026 for M&A mega-deals

Goldman Sachs is predicting a blockbuster 2026 for mega-deals across Wall Street as it and the other US banking giants unveiled a string of bumper financial results this week.

Goldman shared Thursday it raked in a company record $9.3 billion in investment banking fees for 2025, up 21% from $7.7 billion a year ago.

It and the five other major US lenders — Morgan Stanley, Citi, Wells Fargo, JP Morgan, and Bank of America — picked up a combined revenue of $593 billion in 2025, a 6% increase from the previous year, and some $157 billion in profits, up 8%.

Morgan Stanley said Thursday that it saw investment banking revenue rise to $7.6 billion in 2025 from $6.1 billion a year earlier — setting the scene for fat-cat bonuses that will be announced over the coming days.

Goldman CEO David Solomon shared his rivals’ optimism about the coming year, saying “a likely scenario” is that 2026 will be “a very, very good” year for Wall Street’s investment bankers and M&A advisors.

“The world is set up at the moment to be incredibly constructive in 2026 for M&A and capital markets,” he said on a call with analysts.

“I think over the next few years, barring some sort of exogenous event that slows it down, we are going to have a pretty constructive environment for those activities,” the Wall Street veteran added.

He also took a thinly veiled swipe at the Biden administration, which some industry insiders blame for taking an overzealous approach to red tape and policing mega mergers.

“We had a very, very different environment from a regulatory perspective for M&A for the last four years,” Solomon explained.

Global M&A volumes swelled to $5.1 trillion in 2025, up 42% from 2024, according to data from Dealogic.

“CEOs definitely believe that ‘The Art of the Deal’ – scaled consolidation – is possible now,” the 63-year-old said in an apparent reference to President Trump’s book on business negotiations.

“CEOs and boards are looking and saying: ‘We’ve got a window here of a handful of years where the opportunity to consider big strategic, transformative things is certainly possible.'”

The Post understands the company’s deal pipeline, financial jargon for the number of potential transactions booked by a firm that are yet to close, is at its highest level for four years.

Solomon’s remarks came amid the Trump administration’s moves to slash regulations, Fed Reserve rate cuts, and spare cash on company books that can be deployed for possible takeover targets, sparking a flurry of deal activity.

That is despite the longest-ever US government shutdown, which ran from October to mid-November, and ongoing investor concern over Trump’s see-sawing tariff policy.

Goldman bankers worked on some of the biggest mergers of 2025, including the $56.5 billion leveraged buyout of Electronic Arts and Alphabet’s $32 billion acquisition of cloud security firm Wiz.

Those outsized deals helped Goldman secure the top spot once again for global M&A in 2025, with the bank advising on $1.48 trillion in total volume of deals and raking in $4.6 billion in fees.

The success at 200 West Street, Goldman’s main headquarters, was mirrored at crosstown rivals Morgan Stanley, Citigroup, and JPMorgan, which posted on Wednesday full-year investment banking fees of $9.7 billion, compared with $9.1 billion a year ago

Morgan Stanley’s chief financial officer, Sharon Yeshaya, shared the upbeat mood on Wall Street.

“We are seeing an accelerating pipeline in M&A and IPOs,” she said, adding that the bank expects more deals in the healthcare and industrial sectors.

But CEO Ted Pick also warned of the “complicated” economic environment, as well as “geopolitical swirl” that could upend any of the bank’s forecasts for new transactions.

“We are keeping full watch on potential M&A,” said the Harvard Business School alum. “But we will continue to be patient.”

Jane Fraser-led Citigroup said its investment banking fees rose 22% in 2025 to $4.4 billion, up from $3.6 billion the previous year.

Citigroup, which has long lagged behind its Wall Street rivals, poached Vis Raghavan from JPMorgan to boost its investment banking team.

It is part of Fraser’s reorganization of the company. She presented a plan in late 2023 to increase earnings, streamline operations, and address long-standing deficiencies in the bank’s data governance and risk management.

The overhaul has triggered a wave of exits in the wealth and technology units of the bank, with the latest shuffle elevating Gonzalo Luchetti to succeed Mark Mason as chief finance officer.

Fraser is also aiming for even bigger profits in 2026, with goals like a 10% return on key investments and cutting costs, including headcount, to run the business more efficiently.