The hot sub-sectors for industrial deals
Interview with KPMG’s Surinderpal Matharu on deal trends and his own challenges
Hello Rainmakers,
2026 has been off to a wild start, with war, geo-political and macroeconomic events across the globe, not least the US tariff regime implemented by US President Donald Trump has had a predictably chaotic effect on market conditions.
Amidst this chaos, Surinderpal Matharu, head of UK M&A for diversified industrials at KPMG has to advise clients. Afroze Zaidi caught up with him.
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Surinderpal Matharu is full of optimism. On the one hand, he acknowledges that geopolitical developments, and their impact on the UK market, remain unpredictable – but on the other, he’s adamant that there’s plenty of scope for growth.
“There’s a lot of opportunity out there,” he says. “Beyond all the negative press you see, there are very niche sub sectors with a lot of opportunity, lots of cross-border deals with companies seeking access to new markets and technologies, non-core disposal activity, and then larger scale mergers and acquisitions. Then because of rising tax rates, people are retiring earlier than perhaps they would have otherwise done, so that is also stimulating more deals activity.”
He paints a picture of a UK market in 2026 where it’s very much business as usual. And given the state of the world, that’s probably as positive an outlook as we can realistically hope to expect.
When we meet he is charming and exceptionally easy to speak to. He grew up in Birmingham and still lives there now and was encouraged to go into accounting by his father, an IT contractor who came to the UK from Kenya at the age of 17.
His story is one that will be familiar to all high-achieving children of immigrants: use formal qualifications as a means to success, and work twice as hard in order to be recognised. He returned to KPMG 11 years ago, having spent five years conducting international M&A for international group IMI plc.
“I saw the opportunity for KPMG to really step into and accelerate the industrials landscape of M&A,” he said, “and I wanted to lead that, build a team and implement a new growth strategy, which I’m now doing.”
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Hot spaces
He says the “hot sub-sectors” are: energy grids and infrastructure, aerospace and defence, industrial distribution, and safety.
He says there’s a huge shortfall in investment in the UK, Europe, and globally. Add renewable energy on top of that and there’s an even more significant need.
“So this is a real hot space,” he says, adding that the rising need for data centres as a result of increasing AI adoption directly links to demand. No pun intended here, given that the cooling required by AI data centres has now become fairly common knowledge.
“The UK is going to be stepping up investment in data centers and its grid infrastructure – so anything around that value chain, we’re really excited about.”
At a time of war, inevitably aerospace and defence have seen order books full, valuations rise, and corporate activity increasing too. He says that’s also spilled over into commercial aviation as well.
