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Carve-outs are set to lead global mergers and acquisitions activity in 2026, as companies streamline portfolios amid geopolitical uncertainty and rapid technological disruption, particularly from artificial intelligence, according to KPMG’s Global M&A Outlook 2026. The survey of 700 dealmakers found that 57% of corporate executives and 71% of private equity firms are open to or actively pursuing portfolio rationalization this year. Over half of corporates expect carve-out activity to increase in the next 12 to 24 months as boards refocus on core businesses and reduce exposure to geopolitical and operational risks. Private equity firms are positioning themselves as key buyers of divested assets. About 55% are considering carve-out acquisitions, seeing opportunities to unlock value by injecting capital, new management, and sharper strategic focus. US private equity firms are especially optimistic, with 75% expecting higher deal volumes in 2026, compared with 57% of corporates. Technology, particularly AI, is another major driver shaping M&A strategy, with 43% of dealmakers targeting the tech sector. However, execution challenges remain significant. Corporates cite operational disentanglement (52%), valuation complexity (43%), and IT and data separation (40%) as major hurdles. Despite this, KPMG expects increased carve-out activity to fuel future IPOs, with private equity acting as an intermediary between corporate sellers and public markets.

 

Bloomberg

Target chief executive Michael Fiddelke is restructuring his leadership team shortly after taking the helm. Chief commercial officer Rick Gomez, a 23-year company veteran, will leave, while Jill Sando, chief merchandising officer, will retire. Lisa Roath will step into Mr Fiddelke's former role as chief operating officer, and Cara Sylvester will become the new chief merchandising officer. Mr Fiddelke said: "These leadership changes align the right talent and expertise with key roles, and simplify our structure so we can advance our strategy with greater speed, clarity and accountability". The company is also increasing store staffing while cutting about 500 jobs at distribution centers and regional offices, as it faces challenges in consumer spending and operational issues.

 

ABC News

Reuters

Minnesota Star Tribune

Estée Lauder has filed a lawsuit against Walmart in California federal court, accusing the retailer of facilitating the sale of counterfeit beauty products on its online marketplace and failing to adequately vet third-party sellers. The complaint alleges that fake versions of products from brands including La Mer, Le Labo, Clinique, Aveda, Tom Ford, and Estée Lauder were sold on Walmart.com. Items cited include counterfeit Advanced Night Repair serum, Clinique eye cream and La Mer lotion. Estée Lauder said it purchased and tested several products bearing its trademarks and determined they were not authentic. While the listings were operated by third-party sellers, Estée Lauder claims Walmart played an active role in promoting and facilitating the sales. In response to the suit, Walmart said it has “zero tolerance for counterfeit products” and will respond in court.

 

CNBC	Wall Street Journal

Coca-Cola said on Tuesday it is maintaining its current pricing strategy despite ongoing consumer affordability pressures, opting to offer a wider range of package sizes and price points rather than implement broad price cuts. Outgoing chief executive James Quincey said there is “no big reset” planned, emphasizing flexibility through varied bottle and can sizes to meet different budgets. The company reported fourth-quarter revenue of $11.8bn, up 2% year-on-year, driven by higher prices and improved sales volumes, though slightly below Wall Street expectations. Earnings rose 4% to 53 cents per share, with adjusted earnings of 58 cents per share beating forecasts. Coca-Cola noted that lower-income consumers remain under pressure, but said it continues to gain market share in North America. The company also expects limited impact from new restrictions in some U.S. states barring food stamp recipients from purchasing soda. Incoming CEO Henrique Braun said the company will look to back beverages that appeal to specific markets, adding: "We need to get closer to the consumer and improve our speed to market. Our innovation today is not where it needs to be".

 

Atlanta Journal-Constitution

Bloomberg

CNBC

Wall Street Journal

On Tuesday, Spotify reported a historic gain of 38m monthly active users, reaching a total of 751m by the end of 2025. The fourth-quarter earnings report revealed an 11% increase in users and a 10% rise in paid subscribers, totalling 290m. Revenues surpassed $5.3bn, up 7%. The company, which has raised premium prices to $12.99 a month, anticipates adding 8m more users in the first quarter of 2026.

 

CNBC

Los Angeles Times

Wall Street Journal

The House of Representatives has rejected a rule pushed by Republican leaders to prevent votes challenging US President Donald Trump’s tariffs. The move could pave the way for Democratic lawmakers to force a vote as soon as today on a resolution blocking Trump’s tariffs on Canada. The votes of three Republicans – GOP Reps. Thomas Massie, Don Bacon and Kevin Kiley – were enough to deal the blow to the administration. Bacon said: “Tariffs have been a ‘net negative’ for the economy and are a significant tax that American consumers, manufacturers, and farmers are paying. Article I of the Constitution places authority over taxes and tariffs with Congress for a reason, but for too long, we have handed that authority to the executive branch. It’s time for Congress to reclaim that responsibility.”

 

CNN

Financial Times

Reuters

U.S. business inventories increased by just 0.1% in November, undershooting expectations and marking a slowdown from October’s 0.2% gain, according to government data. Economists had forecast a 0.2% rise, while inventories were up 1.2% compared with a year earlier. The weaker growth reflected a decline in retail stocks, particularly motor vehicle inventories, which fell 0.9% during the month. Retail inventories excluding autos - a key input into GDP calculations - rose 0.2%, while wholesale inventories increased by the same amount and manufacturers’ stocks edged up 0.1%. Business inventories have now declined for two consecutive quarters, weighing on economic growth, though this has been partly offset by a narrowing trade deficit. Meanwhile, business sales rebounded 0.6% in November, reducing the time needed to clear inventories to 1.37 months from 1.38 months in October.

 

Nasdaq

Reuters

U.S. import prices were unchanged in December compared with a year earlier, following a 0.1% decline in November, according to data from the Labor Department. On a month-on-month basis, import prices edged up 0.1% in December. The Bureau of Labor Statistics said data disruptions from last year’s federal government shutdown prevented it from publishing monthly import price changes for October and November, and led to a shorter release for December. The agency noted, however, that a more recent brief shutdown did not affect the collection of price data.

 

Reuters

Growth in U.S. labor costs cooled unexpectedly in the fourth quarter, posting the smallest annual increase in four and a half years as easing demand for workers restrained wage gains. The Labor Department's Employment Cost Index rose 0.7% in the final three months of the year, down from 0.8% in the previous quarter and below economists’ expectations. On an annual basis, labor costs increased 3.4% through December, the weakest pace since mid-2021. Wages and salaries, which make up the bulk of labor costs, showed a similar slowdown, while a softer labor market was reflected in fewer job openings per unemployed worker. Despite the easing in wage pressures, higher import tariffs have continued to lift goods prices, keeping inflation elevated.

 

Reuters

The National Federation of Independent Business (NFIB) has published its Small Business Optimism Index for January, showing a 0.2 point drop to 99.3, below expectations of 99.8 but remaining above its 52-year average of 98. Of the 10 components in the index, three improved while seven weakened, with the most notable change being a six-point jump in expected real sales volumes. At the same time, uncertainty among small business owners increased, with the NFIB Uncertainty Index rising seven points to 91, driven largely by growing hesitation over whether it is a good time to expand. NFIB chief economist Bill Dunkelberg said that while GDP growth continues, many small businesses are still waiting to see stronger economic momentum, even as more owners report improved business conditions and higher sales expectations. A newly introduced Small Business Employment Index pointed to a balanced labor market, sitting about 1.5 points above its historical average.

 

Investing

AICPA has urged the U.S. Treasury and IRS to simplify or eliminate new documentation requirements tied to Section 951 dividend transition rules, warning they are unclear and overly burdensome. It stated that the “determine and document” requirement in IRS Notice 2025-75 fails to specify what level of analysis or evidence is needed to show that certain dividends increased a U.S. person’s taxable income. The rule affects U.S. shareholders of controlled foreign corporations who reduce Subpart F or tested income under a transition provision added by the One Big Beautiful Bill Act. AICPA recommends either scaling back the requirement where dividends are clearly taxable by law, or introducing a safe harbor that removes the documentation obligation for mandatory inclusions, such as those received by individuals or S corporations. The group warned that the requirement adds compliance costs without clear benefit and may be impractical for transactions that closed before the notice was issued.

 

The Tax Adviser

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has introduced a significant update to the global minimum tax regime, particularly regarding tax incentives. This new framework, developed at the request of the U.S., aims to align tax incentives with genuine economic activities while preventing profit shifting. Raffaele Russo, a partner at Chiomenti, emphasizes that the "substance-based tax incentives safe harbor represents a significant policy shift." Starting from fiscal years after January 1, 2026, multinational enterprises can elect to treat certain tax incentives as qualified, allowing for more favorable treatment in effective tax rate calculations. However, the new rules come with limitations, including a substance cap based on payroll costs and tangible assets. The effectiveness of these changes will depend on how countries adapt their tax policies to promote real economic activity.

 

Bloomberg Tax

The U.S. Treasury has issued a general license to support oil and gas exploration and production in Venezuela, allowing U.S. goods, technology, and services while restricting new joint ventures. The move could help expand output from nearly 1m barrels per day, with the U.S. Energy Information Administration projecting up to a 20% increase in coming months. The license also sets compliance and payment rules as companies seek clearer authorization to invest and export.

 

Reuters

The E.U. has approved Google’s $32bn acquisition of cybersecurity company Wiz without conditions, saying it would not harm competition. "Google stands behind Amazon and Microsoft in terms of market shares in cloud infrastructure, and our assessment confirmed that customers will continue to have credible alternatives and the ability to switch providers," E.U. antitrust chief Teresa Ribera said.

 

Reuters