Mergers and acquisitions transactions are expected to welcome a "harvest year"! JP Morgan's investment banking team is recruiting aggressively and expanding into the European market.

Wall Street giant JPMorgan Chase (JPM.US) is seeking to increase trading personnel in Europe as the bank expects 2026 to be a "bumper year" for mergers and acquisitions. Philipe Goris, Co-Head of Global Banking at JPMorgan Chase, stated, "We are recruiting in nearly every country in Europe." Doris Blessin, Head of Investment Banking at the bank, also mentioned that the bank has funds ready to deploy, the only question is where to deploy them most effectively. The two executives mentioned that clients across Europe have expressed optimism in the early weeks of this year. Investors in Southern Europe, in particular, are feeling confident, as the region is experiencing accelerated growth after years of adjustment and restructuring following the financial crisis. Goris noted that business leaders in Spain are focused on expansion and cross-border investments, while Italy's political and economic stability continues to attract foreign investments. The two executives anticipate that this year will be one of the best ever for mergers and acquisitions, with interest rates falling, credit conditions stable, and pent-up delayed transactions driving activity. Goris stated, "From a merger perspective, this year may be one of the best in history, both globally and in Europe. Relief in interest rates, tightening of credit spreads, and easy financing channels are key factors in facilitating transactions and helping to close the valuation gap between buyers and sellers." JPMorgan Chase's fourth-quarter earnings report this week showed that investment banking revenue was lower than expected. Chief Financial Officer Jeremy Barnum attributed this partly to some transactions being delayed until 2026. Blessin said, "We all thought that 2025 would be the year of asset realization, but only some of it materialized. There is a lot of 'dry powder' (investment capital) that needs to be deployed, and many exit transactions are still on the agenda." After years of market suppression due to high interest rates and valuation discrepancies, M&A activity experienced a rebound last year. Data shows that Europe completed around $903 billion in transactions last year, an increase of approximately 9% from 2024. However, this transaction volume still falls short of the levels exceeding $1 trillion seen in the region in 2021 and the years before the pandemic. The technology, energy, financial services, FinTech, and infrastructure industries, along with stable transaction flows in the mid-market segment, are likely to continue being active areas for mergers and acquisitions. Blessin remarked, "I won't forget the ecosystem of mid-sized enterprises. While there may not be massive deals happening there, they play a very important role in terms of the number of transactions, especially in Europe." It is worth noting that while Goris made the above statements, European banking executives are concerned that after a wave of regulatory easing in the United States, Bank of America Corp may deploy additional resources in continental Europe, potentially strengthening its longstanding dominance. JPMorgan executives stated that the flow of transactions is ongoing in both directions - with European companies seeking growth in the US and American companies making investments across Europe. However, they added that inflation and political tensions with GEO Group Inc could disrupt transaction activity, especially if the latter leads to higher costs. Productivity gains from artificial intelligence (AI) may also be achieved later than expected, potentially delaying transactions. They also pointed out that the unusually prolonged benign credit cycle may pose increased risks.