A new report from Alvarez & Marsal (A&M) predicts a heightened environment for shareholder activism in 2026, driven by a rebound in mergers and acquisitions, rising foreign investment, and intense pressure on companies to streamline their operations.

Why it matters: The trend puts boards and management teams on notice that activists are increasingly targeting companies with "unrealized potential," not just those in obvious distress. A favorable M&A market provides activists with more pathways to force sales, breakups, or other strategic changes to generate returns.

The big picture: The report identifies three interconnected themes shaping the landscape for the remainder of the year:

  • Increased M&A: Pent-up dealmaking is being released as pressures like high interest rates ease, giving activists a faster alternative to long-term operational turnarounds. A strong M&A environment provides an "out" for activists looking to realize value from an investment.
  • Portfolio optimization: A liquid M&A market emboldens investors to demand companies divest non-strategic assets or break up complex structures. This focus is shifting from separating unrelated businesses to questioning complexity even within a single industry.
  • Margin discipline: With more deals happening, investors are scrutinizing whether companies can deliver on promised cost savings and synergies. Even without M&A, there is a persistent push for cost cuts and profit improvement.
Zoom in: The industrials sector—specifically companies in building products, construction and engineering—is expected to be a primary target for activists.
A&M's analysis suggests these companies are overrepresented among the most vulnerable to activism, reflecting cyclical pressures that have weighed on performance.

The report points to a convergence of factors that could create an "inflection point," including increased infrastructure spending, stronger foreign direct investment (FDI) in asset-heavy industries, and potential interest rate cuts that could unlock demand.

By the numbers:

  • 54: Number of "megadeals" (transactions over $10 billion) announced by U.S. companies since the beginning of 2025, several of which involved activist pressure.
  • 37: Number of industrial companies ranked in the top 10% of A&M's activism vulnerability model, which screens roughly 2,500 public companies.
  • Top 3 most vulnerable sectors: According to the report's model, Information Technology (53 companies), Health Care/Life Sciences (44), and Industrials (37) are most at risk of activist campaigns.
Between the lines: The playbook for activism is expanding beyond the traditional conglomerate breakup.

  • The report cites Elliott Management's campaigns against Honeywell (pushing for a separation of its aerospace and automation units) and PepsiCo (urging it to refranchise its bottling operations) as key examples.
  • The PepsiCo campaign in particular shows how activists now scrutinize operational complexity even within a coherent business, targeting assets that may have different growth profiles or capital needs.
What to watch: Companies should expect increased scrutiny of their corporate structure, capital allocation and M&A rationale. The report suggests that boards must be prepared to defend how each business unit contributes to the company's overall value, as proactively simplifying operations will be key to deterring an activist campaign.

Download the Alvarez & Marsal Activist Alert here.

SOURCE: Alvarez & Marsal

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