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Mergers and acquisitions bankers got back on their feet in 2024 and are now waiting to see whether a second Donald Trump presidency will turbo-charge or temper their nascent recovery.
Global transaction values have risen 16 percent this year to hit US$3,1 trillion, according to data compiled by Bloomberg, as central banks have wrangled inflation and started to cut interest rates.
Cheaper borrowing costs and strong equity markets have given some companies the confidence and capital to pursue deals, and others have been using the return of a more normal post-pandemic environment to simplify their businesses via asset sales and spinoffs.
A flurry of multi-billion-dollar M&A in sectors like advertising, building materials and banking in recent weeks, along with private equity firms reopening their check books to hunt for bargains in public markets in the US and Europe, is helping deal-makers generate some strong momentum heading into the new year.
“You can feel the buzz around the office, deal conversations have picked up and the tone has changed.
” It’s been happening even in the last 10 days,” said Ehren Stenzler, co-founder and managing partner of advisory firm LionTree LLC.
“You’re also seeing some of the really large-cap conversations.
Deals that were not perceived to be actionable two months ago are back on the radar again.”
There is a strong belief among investment bankers that Trump’s business agenda will fan the flames of the M&A recovery by freeing up more cash for acquisitions via corporate tax cuts and by lowering regulatory barriers to big deals across sectors.
“The table is pretty much set for a robust 2025,” said Dan Grabos, who runs Americas M&A at Barclays Plc in New York.
“We’re past the US election and there’s underlying optimism that we’re going to be in a pro-growth, less-regulation environment.
I think we’re going to continue to see transactions across the spectrum — from transformational deals of $10 billion plus and more midcap activity.”
But there is also concern that the incoming president’s plans for tariffs could re-stoke US inflation and the need for rate hikes. And the risks and rewards extend beyond the US, according to bankers.
“The election of Donald Trump is a threat and an opportunity for M&A activity,” Matthieu Pigasse, Paris-based partner at Centerview Partners LLC.
“The very reason why he’s an opportunity is because he’s also a threat.”
In Europe, bankers say, companies may have to rethink operations to stay competitive, including by looking at acquiring US businesses to help mitigate the potential impact of any tariffs imposed on the EU.
“The decisiveness of the election of Donald Trump was a wake-up call for European companies,” said Benoit d’Angelin, founder and chief executive officer of London-based advisory firm d’Angelin & Co.
“Now they can’t say that Trump is a temporary phenomenon. Protectionism — as well as Trumpism — might be more structural than we initially thought.” — Bloomberg
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