There’s lots of newness right now. New year, new POTUS, and new hope for the corporate dealmaking market.
The market for mergers and acquisitions should benefit from a Donald Trump presidency, if for no other reason than the election is settled, according to experts who spoke with CFO Brew.
Some executives celebrated Trump’s November win—and the promised deregulation and tax breaks that would likely come with it. But regardless of which party won the White House, dealmakers are glad to have some predictability in their valuation models, according to Mitch Berlin, EY Americas vice chair of strategy and transactions.
“People were waiting on the election [results] so they knew where the risk was going to be,” Berlin told CFO Brew. With the election settled, businesses “can predict better what the risk is in front of us, we can build better models, and we can go to market with the right valuations,” he said.
Berlin explained that if Democrats had won, the risks would be a continuation of the last four years: lengthy review timeframes and heightened regulatory scrutiny by officials in agencies like the DOJ and FTC. With Republicans at the helm, the risk calculus shifts to potential impacts of tariffs and trade wars, according to Berlin.
Great expectations. In EY’s December M&A market update, the firm predicted dealmaking activity would increase 10% in 2025, with expected volume increases of 16% in private equity deals and 8% in corporate deals. In 2024, US M&A activity grew 13%, deal value increased 7%, and deal volume increased 17% YoY, according to data EY provided to CFO Brew.
Other studies have reached similar findings. Nearly nine in 10 (87%) of the 419 global dealmakers that SS&C surveyed said they expect M&A and financing activity to increase this year. Nearly half of the respondents who worked at private equity firms said they expect to work on deals valued at $10+ billion this year.
Kevin Desai, private equity sector and deputy deals leader at PwC, told CFO Brew that over the last few decades, there’s been a roughly 10% YoY spike in M&A activity after a presidential election.
A settled election gives “clarity” around regulatory regimes for the coming four years, allowing businesses “to build their strategic plan for the business and how M&A can support that growth plan,” Desai added.
Lighten up. Pete Stavros, KKR’s co-head of global private equity, told Bloomberg that US dealmaking is gaining momentum at the prospect of a more business-friendly climate under Trump.
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“There is a real pick up in activity in the US going into this year,” he told the news organization, noting that it’s been particularly busy in the industrial, healthcare, and tech sectors.
But continued regulation wouldn’t have stopped businesses from striking deals altogether, EY’s Berlin made clear.
“There always are people who maybe weren’t going to try to do big deals because they were afraid they wouldn’t pass FTC and DOJ scrutiny,” he said. “But overall, people need to do deals to reshape their portfolios [or] transform their organizations. So you have to do M&A to survive and move your business where you want it.”
New boss. Many of Trump’s cabinet picks are considered outsiders because their backgrounds and experiences differ from more traditional regulatory heads.
Because of that, it’s hard to use precedent to gather how they’d run their respective departments, Desai said. “But we do know that there’s a general desire to drive economic growth, [and] general desire to streamline regulations,” he said.
Promised deregulation is just one part of the equation for expected strength in M&A, Desai said. Other forces at work include a steadily growing GDP and recent interest rate cuts. Another is a shift in consumer spending behavior from goods to services and subscriptions, which he said is “going to really drive a lot of deal activity” as companies adjust their business models in response.
Scenario planning. There’s a lot more for organizations to consider with a new administration, beyond regulation.
For one, there’s the future of international trade to think about. Last week, Trump announced 25% tariffs on Canadian and Mexican imports, and an additional 10% tariff on Chinese products starting in February. The three countries are responsible for more than one-third of US imports and exports, the New York Times reported.
“I think it will impact M&A in the sense that if [companies are] looking to acquire a business that has significant operations in an area where there are high tariffs, it’s either going to make them think twice about doing the deal, or they’re going to build in the cost of that risk into [their] overall valuation, and you’ll get probably less today than you would have a year ago,” Berlin said.