Following two weak years of mergers and acquisitions activity, 2024 saw an uptick in M&A dealmaking. According to Pitchbook, Global M&A activity increased by 14% in count and 19% in value year on year in 2024. Deal activity in the United States saw a rebound during the year. Anecdotally, some deal professionals indicate that certain deals may have slowed as participants waited out the presidential election results.
Now optimism is high that 2025 will see a proper rebound in M&A activity in the United States.
Private equity activity has been hampered in recent years by high interest rates. However, a downward trend in interest rates and reports of lower multiples may indicate that private equity activity will accelerate.
Although corporate deal-making somewhat rebounded last year, some prominent deals were withdrawn due to the chilling effect of the Federal Trade Commission’s aggressive opposition to proposed high-profile deals. While there are mixed signals about the Trump administration’s approach to antitrust enforcement, the expectation is that it will be a more M&A-friendly administration. If so, this will be a boon for corporate M&A dealmakers.
The current optimism about the Trump Administration goes beyond the honeymoon phase of new presidential administrations. Expectations are high for a buoyant stock market and a concerted effort at deregulation. However, this optimism is tempered by concerns about threats of tariffs and fears of trade wars as new tariffs on Canada, Mexico, and China just went into effect. At this juncture, one upshot of these concerns is an apparent increased interest by foreign buyers in the potential acquisition of US facilities and American operating companies.
Another anecdotal sign about the market expectations for this year’s deal activity is the recent restructuring of Goldman Sachs. In January, the investment banker restructured three divisions in a bet that its deal financing activities would be robust in 2025.
Deal activity for 2025 promises to be dynamic. Potential sellers and corporate buyers should take steps early to prepare for the opportunities.
Doug McCullough, Partner