The U.S. is expected to see a significant rise in mergers and acquisitions (M&A) activity this year, according to industry experts. This surge comes amid a global increase in dealmaking, as many businesses look to expand and adapt in a changing economic landscape.
President Donald Trump’s policies, particularly his pro-business approach and “America First” philosophy, are believed to play a crucial role in this trend. Some analysts suggest that these policies could boost U.S. company profits, which might lead to higher valuations. However, there are concerns that economic uncertainty caused by tariffs and trade policies could cause investors to hesitate, leading to a slowdown in M&A activity.
Rowan Bamford, president of Liberty Global Transaction Solutions, emphasized that while the potential for greater profitability exists, it may not outweigh the costs of borrowing. He noted that if sellers expect to see a significant increase in their business value but buyers struggle with financing, it may lead to mismatched expectations that could hinder deals.
Trump’s “America First” strategy has reinforced a focus on domestic transactions within the U.S. M&A market, as businesses are more inclined to engage in deals that do not involve foreign investment. Bamford pointed out that, due to this domestic focus, a large influx of foreign investment is unlikely.
One of the key factors driving larger deals is the availability of bank funding. Bamford explained that when interest rates stabilize, private equity firms feel more confident in pursuing bigger acquisitions. He stated that private equity decisions are based on predictable borrowing costs, which encourage them to act.
Looking ahead to 2025, experts predict that M&A activity in the U.S. will accelerate, although it may not be concentrated in any single sector. Technology and healthcare are expected to remain active areas, but smaller deals across various industries will also contribute to the overall market.
Last year saw an uptick in deal activity, primarily driven by smaller transactions as businesses sought to rebound from the stagnation caused by the COVID-19 pandemic. These deals often involved small and medium-sized enterprises (SMEs) and were typically initiated by founders looking to sell their businesses.
Despite the increase in activity, smaller deals did not yield significant profits for those involved in the transactions, as they often resulted in lower insurance limits. However, larger deals began to re-emerge towards the end of 2024, indicating a shift in market dynamics.
The beginning of 2025 has seen a slower pace in M&A activity as the market assesses the potential impacts of Trump’s trade policies. While these policies have introduced some uncertainty, they could also lead to a more stable environment for deal-making if their long-term effects become clearer.
Stability and predictability in the economy are essential for encouraging private equity investment. Bamford highlighted that when buyers and sellers can anticipate market conditions, they are more likely to engage in transactions. If uncertainty prevails, deal-making will likely stall.
As the M&A landscape continues to evolve, many are watching closely to see how these factors will shape the future of business transactions in the U.S.