UK chief executives boost M&A as AI drives dealmaking rise

UK chief executives are increasing merger and acquisition activity to support AI transformation, according to EY-Parthenon, with 87% expecting their appetite for deals to rise over the next 12 months.

Among UK respondents, 69% said they are actively pursuing M&A, 63% are considering strategic alliances, and 42% are looking at joint ventures. The findings suggest that dealmaking is being used less for scale alone and more to meet specific strategic goals.

Technology and AI featured prominently in acquisition thinking. When assessing acquisitions or divestments, 46% of UK CEOs cited enhancing technology or AI as a leading consideration, just ahead of strategic fit with long-term growth priorities at 45%.

The survey also found domestic growth was the top market priority for UK leaders. After the UK, respondents identified the United States, Germany, France and India as their main growth markets.

That domestic focus sits alongside a broader view of Britain as an investment destination. In the global results, CEOs ranked the United States as the leading destination for planned M&A activity, followed by India and the UK.

Silvia Rindone, EY UK&I Managing Partner for EY-Parthenon, said the latest responses pointed to more confident use of transactions despite a difficult backdrop. “Despite global turbulence, UK CEOs are approaching M&A with renewed confidence and clear strategic intent, using targeted deals to accelerate technology transformation, strengthen AI capabilities and build long-term value.”

“As activity gathers pace, the UK continues to stand out as a priority for growth, supported by a clear and efficient regulatory environment and strong sector appeal across consumer, energy, life sciences, defence and wealth management. This momentum reinforces the UK’s position as a leading global destination for capital, placing M&A at the heart of the next phase of business growth,” Rindone said.

Confidence holds

The poll found that 87% of UK CEOs are confident about the outlook for the year, while 78% remain optimistic about their organisation’s profitability. That confidence appears to be feeding into spending plans, with 85% saying they feel positive about their ability to invest in emerging technologies.

Executives are still navigating a range of pressures. More than half (54%) ranked geopolitical tensions, instability, and conflict as their first- or second-priority risk over the next 12 months.

Cybersecurity was the next most frequently cited risk at 37%, followed by macroeconomic volatility at 26% and talent shortages at 21%. In response, leaders said they are strengthening financial resilience through cost discipline and capital reallocation, which 23% of respondents cited, while 19% said they are accelerating digital and AI investment.

A large majority, 88%, said disciplined growth and a clear path to profitability matter more than rapid market expansion in the current environment. That helps explain why targeted transactions, rather than broader expansion for its own sake, are moving higher up the agenda.

AI spending

Separate findings suggest AI is becoming more central to corporate planning. Nearly three-quarters of UK CEOs (74%) said they plan to increase AI investment this year compared with 2025.

Respondents said the most measurable effects of AI so far have been in strategy and decision-making (43%) and customer service and experience (37%). This points to a shift away from limited trials towards wider use in core business functions.

The workforce implications are also becoming clearer. Over the next three years, 43% of UK CEOs said they expect to redesign roles to combine human and AI work, while 42% plan large-scale reskilling and upskilling, and 38% expect to increase hiring for AI, data and digital roles.

Rindone said those changes are pushing leaders to think beyond technology spending alone. “Alongside continued investment in technology, UK CEOs are increasingly focused on how human skills can be combined with technology to unlock the full value of AI. The emphasis is now shifting towards redesigning roles, building new capabilities, and developing operating models in which human and AI strengths work together effectively.”

“This is not simply a reskilling challenge, but a strategic one. Organisations that invest early in talent, culture and leadership, while using M&A activity to access technical expertise, will be better placed to drive productivity gains, manage change and sustain long-term growth in an AI-enabled economy,” she said.

The research was based on an anonymous online survey of 1,200 CEOs globally, including 100 in the UK, drawn from large companies across 21 countries and five industry groups. In the UK sample, 69% of respondents were from publicly listed companies, and 45% represented businesses with annual revenue exceeding USD 1 billion.