Legal Alert: 2025 Forecast: A Flurry of Deals
As the world anticipates President-elect Donald Trump’s return to the White House in January, analysts expect Trump’s second term to spark a surge in mergers and acquisitions (M&A). In 2023, deal activity took a downward turn as the Federal Reserve raised interest rates four times, ending the year at a 23-year high. After years of fewer deals and increased blockages from the Department of Justice (DOJ) & Federal Trade Commission (FTC), Trump campaigned on a pro-business platform, promising significant deregulation and to pave the way for more deals to go through than under the prior administration.
Between fiscal years 2017 and 2019, during Trump’s first term, the DOJ and FTC filed 118 merger challenges, outpacing the 108 challenges made from 2021 to 2023 under Biden. However, Biden’s administration set a single-year record in 2022 with 50 merger challenges, the highest in over two decades. Trump has appointed Andrew Ferguson, a current Republican member of the FTC, as the new chair, replacing Biden-appointed Lina Khan. As FTC Chair, Khan focused her efforts at limiting high-profile mergers and taking a tough stance against major U.S. corporations. During her tenure, alongside DOJ Antitrust Division head Jonathan Kanter, regulators overhauled merger reviews to assess more than just consumer prices. Their approach emphasized evaluating the broader market impact, including potential effects on industry power dynamics, suppliers, competitors, and overall competition. Ferguson is anticipated to adopt a more lenient approach to regulating large corporate mergers.
The day after Trump’s election victory over Vice President Kamala Harris, stocks of several companies positioned for mergers and acquisitions surged, fueled by expectations that these deals might now gain regulatory approval. During the Biden administration, high-profile mergers and acquisitions, such as Kroger’s $25 billion acquisition of Albertsons and the merger between JetBlue and Spirit Airlines, were blocked by court rulings. In contrast, Disney recently announced a major agreement to merge Hulu + Live TV with its competitor Fubo TV, combining two leading players in the streaming television industry. Goldman Sachs has issued projections of a 20% increase in M&A activity in 2025.
With a Republican-controlled Congress and Senate, Trump is expected to advance his deregulation agenda, implement measures to lower interest rates, focus on controlling inflation, and to generally aim to establish and foster a more favorable stance from regulators toward mergers and acquisitions. For further insights on the upcoming deal market and projected 2025 deal activity and how a second Trump administration may impact your business, please contact Kessler Collins.
