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Defense Spending Surge May Fuel Middle-Market M&A

September 18, 2026

2 min read

Key Takeaways

Global defense spending is projected to exceed $3 trillion by the end of the year.
The US defense budget is up 11% from last year, with a potential increase to $1.5 trillion.
Aerospace and defense M&A activity is rising, with annual deal value up 61% in 2025.
The sector is seeing increased focus on next-generation technologies and asymmetric warfare.

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Strategic Implications

The surge in defense spending may indicate a shift in global priorities, with potential implications for the aerospace and defense sector. This could lead to increased M&A activity, as companies seek to acquire proven technologies and integrate them into their platforms. However, challenges such as supply chain capacity and the aging workforce may impact the sector's ability to respond to emerging threats.

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What Happened

Aerospace and Defense Sector Sees Increased Investment and Deal Activity

The aerospace and defense sector is experiencing a surge in investment and deal activity, driven by rising global defense spending and a focus on next-generation technologies. According to Merit Investment Bank’s Chris Abato and Leonid Capital Partners’ James Parker, the sector is seeing increased M&A activity, with annual deal value up 61% in 2025. The US defense budget is up 11% from last year, with a potential increase to $1.5 trillion, and European defense spending rose 14% in 2025. This growth is expected to continue, with a focus on autonomous vehicles, drones, and counter-drone technologies. The article was first reported by ACG Insights.

Source | Originally Published: September 18, 2026

Companies Mentioned

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Technology & Systems

Defense Spending Surge May Fuel Middle-Market M&A

September 18, 2026

2 min read

Key Takeaways

Global defense spending is projected to exceed $3 trillion by the end of the year.
The US defense budget is up 11% from last year, with a potential increase to $1.5 trillion.
Aerospace and defense M&A activity is rising, with annual deal value up 61% in 2025.
The sector is seeing increased focus on next-generation technologies and asymmetric warfare.

Silver membership required Upgrade to Silver to access Key Takeaways.

Upgrade

Strategic Implications

Silver membership required Upgrade to Silver to access Strategic Implications.

Upgrade

What Happened

Aerospace and Defense Sector Sees Increased Investment and Deal Activity

Source | Originally Published: September 18, 2026

Companies Mentioned

Merit Investment Bank Leonid Capital Partners Lockheed Martin Raytheon SpaceX Anduril