Dealmaking Hits 10-Year Low Due to Uncertainty

When Donald Trump retook the White House last year, parts of the banking world celebrated.

Wall Street dealmakers saw his presidency ushering in a new era of “megamergers,” with the Republican administration providing a more friendly regulatory environment.

But as the Financial Times (FT) reported Monday (March 24), those predictions have so far not come to pass, with a rocking stock market and uncertainty from the Trump administration curbing mergers and acquisitions (M&A) and initial public offerings (IPOs).

With the first quarter coming to an end, the volume of takeovers globally has climbed more slowly than many advisers anticipated at the end of 2024 when investment banking stocks reached record levels in expectation of a “Trump bump.”

Dealmaking since the start of the year has fallen to its lowest number in more than a decade, the FT said, citing data from Dealogic. There have been about 6,600 transactions announced worldwide thus far for the first quarter, an almost 30% drop since last year and 44% below the peak recorded in 2021.

“There is always uncertainty when a new administration comes to power, but the uncertainty today is well beyond whatever I’ve experienced before,” Jonathan Corsico, head of law firm Simpson Thacher’s M&A practice in Washington, told the FT.

The report adds that while the value of takeover deals has risen 14% since last year — to nearly $812 billion — this uptick has been partially driven by a handful of major deals. Among them is Google’s $32 billion acquisition of cloud security firm Wiz, and private equity group Sycamore Partners’ plan to purchase Walgreens.

Meanwhile, uncertainty coming out of Washington continues to affect smaller businesses and consumers as well, particularly where Trump’s tariffs are concerned.

Research by PYMNTS Intelligence shows that 72% of small and medium-sized businesses (SMBs) see the tariffs bringing in higher prices. That share climbs to 78% among SMB owners who called themselves “very knowledgeable” about the tariff situation.

Around a third of companies project that product quality deteriorates, while 74% of firms that are very knowledgeable about tariffs are worried about shortages.

“In other words, it will be harder to produce goods, there will be fewer of them to offer end customers, and what is on offer will be of relatively poor quality,” PYMNTS wrote last week.

“And that poses the question as to whether consumers will open their wallets. The same report shows that roughly 45% of consumers see a negative impact on their personal finances from tariffs, and 35% see an equally positive/negative scenario.”