Trump administration’s “merger friendly” tariffs result in 20-year low for M&A deals

In a surprising turn of events, the Trump administration, which was anticipated to ease antitrust regulations and usher in a wave of mergers, has instead seen a significant decrease in global dealmaking. Recent data from Dealogic, as reported by Reuters, reveals that only 555 M&A deals were sealed in the US during April, marking the lowest level since May 2009.

The impact of April’s “Liberation Day” tariffs has been profound, with worldwide M&A values plummeting by 54% compared to the previous month. The total number of global deals signed in April stood at 2,330, the lowest figure recorded since February 2005.

Among the notable deals that took place during the month was Boeing’s $10.6 billion sale of its digital unit to a private equity firm, underscoring the subdued M&A activity that characterized the period. The overall decline in dealmaking activity has been a stark contrast to the initial expectations of a merger boom under the Trump administration’s purportedly lenient antitrust stance.

The unexpected dip in M&A deals has raised questions about the factors contributing to the current slowdown in global dealmaking. Analysts and industry experts have pointed to various reasons, including geopolitical uncertainties, trade tensions, and economic instability, as potential drivers of the decline. The implementation of tariffs in April has further exacerbated the situation, leading to a significant decrease in deal values and overall activity.

Despite the initial optimism surrounding the Trump administration’s approach to antitrust regulations, the current landscape of M&A activity reflects a more cautious and subdued environment. Companies and investors appear to be exercising greater prudence and restraint in pursuing large-scale mergers and acquisitions, potentially in response to the prevailing economic and political uncertainties.

As the global economy navigates through a period of volatility and uncertainty, the future trajectory of M&A activity remains uncertain. The recent downturn in dealmaking, as evidenced by the data for April, suggests a more cautious and restrained approach among companies and investors alike. It remains to be seen how the broader economic and geopolitical landscape will shape the M&A environment in the coming months and whether the current slowdown is indicative of a more prolonged trend in global dealmaking.