Activist hedge funds are increasingly challenging proposed mergers and acquisitions, using litigation, proxy campaigns and public pressure to influence deal terms and outcomes as M&A activity accelerates globally.

While activists have traditionally pushed companies to pursue sales, breakups or strategic reviews, a growing number are now taking positions against transactions they view as undervaluing targets, carrying excessive execution risk or failing to maximise shareholder returns.

The trend reflects the growing sophistication of event-driven and activist investors, who are deploying capital both in support of and opposition to transactions depending on where they see the greatest opportunity for value creation.

The heightened scrutiny comes amid a resurgence in global dealmaking and follows a broader increase in activist activity tied to M&A situations. More than half of activist campaigns launched in the second half of 2025 included demands related to mergers, acquisitions or corporate transactions, according to Barclays data.

Market participants expect merger arbitrage and activist funds to remain active across contested transactions throughout 2026 as investors seek to influence deal outcomes and capture event-driven returns.