1. Fewer operations, but higher value and greater accuracy

In the mergers and acquisitions market, large megadeals are giving way to smaller, more focused operations. In foreign direct investment, the number of new projects falls for the first time since 2020 (-6.6%), but total capital mobilized rises by 2.2%.

What explains this apparent contradiction is a change in investment logic: companies no longer invest to gain size or generic geographic presence. They invest to acquire specific capabilities they do not have, or to reinforce positions where they are already strong. The result is larger investments, but fewer of them. Capital is concentrated, and concentrated with intent.

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2. Geopolitics has become the main determinant of capital flow.

Until a few years ago, capital primarily followed profitability and efficiency criteria. Today, capital flows mainly within blocs of politically related countries. The bloc led by the United States accounts for two-thirds of the world’s total foreign direct investment, and 83% of this capital circulates internally among its own members.

The China-linked bloc, on the other hand, is on a downward trajectory. Its intra-bloc investment is volatile and the proportion of capital directed to strategically sensitive sectors has fallen to historic lows. The fragmentation of the international system into two distinct investment orbits is now a consolidated reality that conditions any decision to expand geographically.

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3. The sectors that attract capital are intensive in technology and physical capital.

Investment is concentrated in a few areas that share two characteristics: they require massive amounts of capital to be built, and they are considered strategically critical by governments.

The three sectors that have attracted the most FDI capital in 2025 are communications, renewable energy and semiconductors. Data centers, chip factories and energy infrastructure absorb most of the available capital. The sector with the highest growth in number of projects is space and defense, with an increase of 63%.

In M&A, the most active acquisitions are those that allow companies to incorporate technological capabilities that they could not develop internally in time. The logic is not to buy market share, but to buy knowledge and time.

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4. Europe invests more, but loses competitiveness as an industrial destination.

Capital invested on the continent grew by 15% in 2025, placing it among the most dynamic regions, but this growth is highly concentrated geographically (France captured almost a quarter of the European total) and sectorally, driven almost exclusively by large data center projects.

Europe’s structural problem is the cost of energy. Industrial electricity in Europe costs twice as much as in the United States. For energy-intensive sectors, this cost difference is influencing location decisions. Companies are beginning to choose North America or the Middle East to install new production capacity that they would previously have located in Europe.

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5. India and the United States lead in attracting investment with different profiles.

In the FDI arena, India has established itself as the world’s third largest destination, capturing 20.6% of all Asia-Pacific investment. Its attractiveness combines a huge and expanding domestic market, a rapidly growing manufacturing class and a geopolitical position that keeps it within the Western bloc without the regulatory costs of more mature economies.

The United States dominates the M&A market. American companies show the highest level of confidence to acquire or be acquired, supported by a solid financial and legal infrastructure and industrial policies that actively encourage investment in strategic sectors.

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6. Large companies sell assets: the carve-out market is consolidating.

One of the most marked trends in the M&A market in 2026 is the multiplication of so-called carve-outs: transactions in which a large company sells or spins off a business unit that no longer fits in with its core strategy. These are not distress sales or signs of crisis: they are deliberate decisions to simplify the portfolio.

Managing very different businesses consumes management resources and capital that could be concentrated in areas where there is a competitive advantage. Selling the peripheral is not a sign of weakness, but a tool for strategic acceleration.

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7. International expansion is done more cautiously and with more prior knowledge of the destination.

In both M&A and FDI, companies are becoming much more selective in their choice of markets. Cross-border expansion is done in markets where the company already operates, already has relationships, or where the regulatory and cultural environment is familiar.

This caution is not only a response to macroeconomic uncertainty. It is also a response to increased international tax and regulatory complexity: corporate tax frameworks have changed, regulatory compliance requirements have tightened, and tariff volatility makes long-term financial projections difficult in unfamiliar markets.

The resulting pattern is one of slower and stronger internationalization: less risky bets on new markets, more deepening in markets where there is already a presence.