The widespread uncertainty around the Trump administration’s emerging stance on antitrust has sent M&A professionals searching for a regulatory roadmap.
Though some sizable deals have been finalized since President Donald Trump took office, investors say many others have been put on hold. How Trump’s Federal Trade Commission and Department of Justice define a monopoly or unfair competitive advantage is still largely an open question.
The common Wall Street view as recently as the fourth quarter of 2024 boiled down to expectations that Trump’s appointees would approach antitrust enforcement far more lightly than their predecessors under former President Joe Biden and that deals would surge accordingly.
But that hypothesis has yet to be borne out, according to Zheng (Jonathan) Zhou, an M&A-focused partner at law firm Freshfields.
From venture-backed acquisitions to private equity purchases to public company transactions, dealmakers say they’re proceeding with caution until they have more clarity on antitrust enforcement. Still, prominent VCs including SoftBank have introduced new funds in the mold of Andreesen Horowitz’s “American Dynamism” model, targeting manufacturing, education, supply chain and military sectors.
But there are already some signs that the Trump administration will apply ample scrutiny to sizable deals.
The FTC, for example, sued to stop the $627 million purchase of healthcare startup Surmodics by GTCR, a private equity firm. Regulators are also looking at deals among public companies, like Hewlett Packard Enterprise’s $14 billion proposed acquisition of Juniper Networks, which the DOJ sued to block in January.
At the same time, there have been substantial staffing changes within the US regulatory agencies. Last week, Trump fired two Democratic FTC commissioners with no clear replacement. (Those individuals are suing Trump, accusing him of executive overreach.) And the Securities and Exchange Commission is reportedly moving to slash at least 10% of its workforce.
US M&A trailing, but other factors may explain why
Not everyone, however, is preoccupied with the new administration’s antitrust agenda.
“Anyone who was acting surprised wasn’t paying much attention to the current administration’s viewpoints,” said Justin Abelow, a managing director at Houlihan Lokey who works on PE deals.
There have been more than 1,500 US M&A deals struck this year to date as the first quarter comes to a close, according to PitchBook data. That’s not on pace with the 8,387 transactions recorded in Q1 2024.
Indeed, other factors may be bigger culprits when it comes to the sluggish M&A in 2025. Interest rates remain relatively high, and tariffs are roiling public and private markets. Geopolitical conflict isn’t stopping either.
“If you’re drawing a decision tree for the market, do you have a close nexus to the global supply chain?” Abelow said. “If the answer is yes, take a nice vacation.”
Still, he expects a possibly significant uptick in PE growth and rollup deals later this year, especially if market conditions improve and rates decline further. Even now, he said, private companies in hot sectors like healthcare are still primed for acquisitions.
Despite volatility in the stock market this year, both the S&P 500 and the Nasdaq remain in the green over a 12-month trailing period as an indicator of relative health in the markets, pointed out Abelow.
‘A ton of uncertainty’ around US deals
Nathan Viehl, a partner at law firm Thompson Coburn who advises PE clients, said he’s worked on very few deals this year in which antitrust has emerged as a potential sticking point—so far, at least.
The PE shops he works with are more preoccupied with interest rates remaining relatively high and the recent wave of US tariffs slowing deals down. That said, the Federal Reserve’s signal that rates could be cut even with inflation risks could create “more deal activity, even if the broader economy isn’t humming along,” he added.
The current slowdown is only intensifying two private market problems: “a massive backlog on exits and IPOs” and a “massive amount of dry powder,” according to Marcus Wolter, who heads M&A and venture capital for the law firm Caldwell.
But some sectors are likely to have a tougher time: Companies with prominent DEI policies, for one, aren’t likely to get deals done, he said. And big tech companies may also have to tread lightly on M&A, Zhou added, especially for transactions involving AI, which the government has indicated could be considered as a matter of national security, he said.
Featured image by Josie Doan/PitchBook News
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