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The
number of deals and their value are both below pre-pandemic
levels. In the U.S. deal values fell 23% in 2023 from just
before the pandemic, while the number of deals slumped 20%. The
current year is on track for and even deeper slump, according to
Dealogic.
That could change thanks to the Federal Reserve loosening its
interest rate policy and returning President Donald Trump vowing
to slash regulations. Trump's planned cuts to the Federal Trade
Commission could also mean less staff scrutinizing antitrust
concerns.
“President Trump’s administration is set to continue its push
for deregulation across various sectors and existing
governmental agencies, aiming to lighten the regulatory load on
both the economy and businesses,” said EY chief economist
Gregory Daco.
The Fed has cut interest rates twice since September and Wall
Street expects another rate cut next month.
The central bank had held rates at historic highs through much
of 2023 and 2024. That made mergers and acquisitions more
expensive and less attractive.
At the same time, U.S. regulators were closely scrutinizing more
proposed deals over antitrust issues, resulting in the delay or
scrapping of potentially big deals over the years.
Kroger’s proposed $24.6 billion purchase of rival Albertsons has
been stalled since late in 2022. The Federal Trade Commission
alleges the deal would eliminate competition and lead to higher
food prices.
Amazon walked away from its planned buyout of robot vacuum maker
iRobot following scrutiny from U.S. and European regulators.
WillScot Holdings, which makes portable classrooms and mobile
offices, also scrapped a proposed deal under pressure from
regulators.
The White House released updated merger guidelines in late 2023
meant to solidify the Biden administration’s tighter regulatory
regime. Officials said consolidation had long run unchecked,
diminishing competition and hurting consumers.
U.S. regulators' efforts to break up Google had also raised
caution in the industry over entering into deals.
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