How could the incoming Trump admin impact the mergers and acquisitions market?

President-elect Donald Trump's return to the White House could bring a change in the market for mergers and acquisitions after President Biden's administration successfully challenged several high-profile mergers in the last four years.

The Biden administration's Federal Trade Commission (FTC) and the Department of Justice's antitrust division intervened in a number of proposed mergers and acquisitions to challenge deals they viewed as undermining competition and potentially hurting consumers.

Among the deals that were ultimately blocked by federal courts or abandoned by the parties to the deal were the $25 billion acquisition of Albertsons by Kroger, while the mergers between airlines JetBlue and Spirit, as well as luxury fashion companies Capri and Tapestry, were also blocked by court rulings.

With FTC Chair Lina Khan set to depart the agency later this month and the leadership of the DOJ's antitrust division also set to turn over with the new administration, market participants are expecting the second Trump administration to take a lighter approach to deals in the next four years.

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KPMG conducted an annual year-end survey of corporate and private equity dealmakers which found that 76% of respondents said the election results would increase U.S. M&A activity, while 80% said it increased their own appetite for deals. Potential tax policy changes were seen as boosting M&A activity by 811% of dealmakers, while 79% said the election will lead to an easier regulatory or antitrust environment for deals.

Similar sentiments were found in a recent survey conducted by Teneo that found 83% of CEOs and 87% of investors expect that the market for mergers and acquisitions will experience a major return in 2025, up from 68% last year. The share of respondents who expect "significantly more" M&A activity rose from 17% to 37% among CEOs and from 26% to 34% for investors.

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The survey also found that 86% of both CEOs and investors anticipate there will be an accelerated pace of M&A activity under the Trump administration, while 80% of CEOs and 74% of investors are predicting the administration will have a positive impact on deals being completed.

Ted Jenkin, president of Exit Stage Left Advisors, told FOX Business that Trump's selection of Andrew Ferguson to serve as FTC chair, a $35 billion "Merger Monday" in early December and potential tax changes in 2025 mean that "the writing is on the wall that the next four years should be extremely robust for Mergers and Acquisition activity."

Raj Sharma, director of strategic business development and M&A at Itochu, said that inflation subsiding and lower interest rates are likely to boost dealmaking during the Trump administration, along with a new approach to scrutinizing such deals.

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"President Trump was generally quite permissive of M&A in the financial services, energy and industrials sectors during his term," Sharma added. "It is expected that he will be permissive again in his second term, although he has been critical of the influence of big tech and will not be as supportive of M&A in that space."