The report below gives a good overview of the Winter 2026 M&A activity in the Aerospace, Defense & Government Industry Sector. The A&D industry ended 2025 in a global industrial renaissance, with the first-ever $1.01 trillion U.S. defense budget request. This breakthrough marks a wider shift from the peace dividend period to a security supercycle, where military expenditure is driven by exigency needs of autonomous systems and integrated missile defense. In the meantime, commercial aviation had entered into a high-volume execution strategy, trying to work through a decade-long backlog of 17,000 aircraft and struggling with a supply chain that was weak but recovering. The new defense priorities moved on to the next-generation capabilities, such as hypersonic weapons, team combat planes, and proliferated low-earth-orbital constellations as a resilient communications system. Resilience in supply chains became a paramount focus throughout the entire A&D sector. The investments in local production and dual-purpose technologies are hastened by the changes in the U.S. policies, such as the simplification of acquisition and surges of research and development. Greater digital transformation, including AI analytics, digital twins, model-based engineering, and predictive maintenance, redefined value chains. This accelerated the innovation process and realized cost efficiencies. Geopolitical rivalries increased the need to purchase missile defense devices, counter-drone tools, and sustainability efforts accelerated hybrid-electric propulsion and sustainable aviation fuel. The Global A&D market is expected to grow to $1.3 trillion by 2033 at 5.8% CAGR, with the U.S. as the leader in autonomous platforms and space domain awareness. This revival is an indication of a new chapter of strategic rivalry and technological supremacy.
Posted by Jim Gerberman.
Read the Entire Winter 2026 Aerospace, Defense & Government Report Here