Trump's admin could spark a surge in mergers and acquisitions

In the aftermath of the recent elections in the United States, there is a significant shift anticipated in the mergers and acquisitions landscape. Following President Joe Biden's administration, which took a stringent stance against several high-profile mergers, market experts now foresee a more favorable environment under the returning Trump administration. This change is predicated on the expectation of tax reforms and a less aggressive regulatory approach towards mergers and acquisitions, as indicated by a year-end survey conducted by KPMG. The survey revealed that 76% of corporate and private equity dealmakers positively anticipate an increase in M&A activity. As the Biden administration previously challenged several major deals, including the $25 billion acquisition of Albertsons by Kroger, the prevailing sentiment among business leaders is that the Trump presidency will lead to a permissive stance towards M&A. This is further supported by reports highlighting that 80% of dealmakers believe the election results will enhance their interest in pursuing transactions. Moreover, the environment for M&A is expected to be buoyed by potential tax policy changes and an anticipated easing of regulatory scrutiny that has characterized the previous administration's approach. CEOs and investors alike show optimism regarding the prospects for M&A activity, with 86% of CEOs and investors expecting an accelerated pace under Trump. The sentiment aligns with a rising expectation that regulatory bodies such as the Federal Trade Commission and the Department of Justice's antitrust division will adopt a more lenient approach to reviewing mergers and acquisitions. Instances of prior mergers that faced legal challenges signal a contrast to what is expected moving forward. This optimism is not unfounded, as 79% of respondents in the KPMG survey also noted that they foresee a more accommodating regulatory environment for deal-making. The anticipated leadership changes in key regulatory agencies are thought to foster a climate conducive to completing mergers. Additionally, economic factors such as easing inflation and lower interest rates are projected to further amplify M&A activities. Lastly, with the appointment of Andrew Ferguson as the FTC chair and other imminent shifts in regulatory leadership, the groundwork appears laid for a new era of deal-making. Industry experts are optimistic that Trump's second term will mirror past approaches to M&A in sectors like financial services, energy, and industrials, although they caution that he may maintain a critical view of the influence of big tech on the market. Overall, the combination of regulatory changes, favorable tax policies, and an improved economic backdrop presents a hopeful scenario for mergers and acquisitions in the dawning era of the Trump administration.