The commercial aerospace sector is showing positive signs of renewed merger and acquisition (M&A) activity as market conditions evolve. Analysts from Alderman & Company highlight that 2026 may bring relief to the previously stalled M&A pipeline, driven by shifting economic and regulatory trends.
M&A Market Transformation in Recent Years
The M&A environment underwent significant changes in 2025. Policy shifts encouraged domestic consolidation and stronger internal investment, while the regulatory environment became more favorable for large transactions.
Despite initial challenges and uncertainty, the second half of 2025 showed improvement. Strategic buyers with strong financial resources expanded their presence, while smaller financial investors faced liquidity constraints and longer holding periods.
This dynamic created a K-shaped recovery, where well-capitalized companies advanced while smaller players struggled. As a result, high-premium deals became more common in the aerospace market.
Rising Deal Activity in Aerospace and Defence
M&A activity in the aerospace and defence sector reflected broader economic adjustments. In 2025, a total of 398 transactions were completed. Although this represents a decline of 14% compared to 2024, it signals continued market engagement.
Deal volume also remained below the 2021 peak, highlighting the ongoing recovery process. However, activity increased in the latter half of 2025, particularly in aerospace-related transactions.
Industry experts note that aging aircraft fleets and strong demand for maintenance services are driving investment in the aftermarket and MRO segments. Companies providing long-term support and operational efficiency solutions are attracting premium valuations.
Strategic Buyers Lead Market Momentum
A notable trend in 2025 was the growing influence of strategic buyers. These companies accounted for 53% of total transactions, demonstrating increased confidence in the sector.
Financial buyers faced challenges in exiting investments and raising new capital, which limited their participation. As liquidity tightened, strategic firms with stronger balance sheets expanded their acquisitions.
Examples of major transactions included acquisitions in the aerospace services and supply chain sectors, reflecting a broader shift toward consolidation and operational efficiency.
Major Transactions Highlight Industry Confidence
High-profile acquisitions demonstrated renewed confidence in aerospace investments. Key deals included:
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Expansion initiatives by industry participants seeking supply chain advantages.
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Strategic investments aimed at supporting aircraft life extensions and aftermarket services.
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Transactions reflecting premium valuations for companies with specialized capabilities.
These developments suggest that businesses focused on maintenance, repair, and operational support remain attractive to investors.
Outlook for M&A Activity in 2026
Analysts expect continued growth in aerospace M&A activity in 2026. If economic conditions remain stable and tariff policies are predictable, investment momentum is likely to strengthen.
Travel demand continues to rise, and airlines require solutions to maintain aging fleets. This creates opportunities for companies specializing in operational support and efficiency enhancements.
While external risks such as geopolitical events or economic disruptions could impact growth, industry experts remain optimistic about the long-term potential of aerospace M&A.
