The recovery of M&A activity is just beginning, and there are several compelling reasons to be optimistic about what’s ahead. With the Federal Reserve continuing to ease its restrictive monetary policies, the cost of capital is declining, which will provide more favorable conditions for deal-making. Coupled with a resilient economy and a historic backlog of transactions following nearly three years of subdued deal flow, the stage is set for a strong recovery in M&A.

According to strategists, the results of the US presidential election add another layer of optimism, as federal regulators had imposed more restrictive policies on M&A under the outgoing administration. This created hurdles for business combinations and further complicated an already difficult market. In contrast, projections indicate that a pro-business agenda, which includes tax cuts and regulatory reforms, will likely create a more favorable environment for corporate consolidation in the years ahead. These changes are likely to drive further momentum in a deal-making market that is already poised for recovery in 2025.

As we look ahead, the best time to start preparing for a potential transaction is now. With a more crowded and competitive market expected in the near future, companies that invest in thorough preparation today—whether by optimizing financials, addressing regulatory concerns, or refining strategic goals—will be best positioned to capitalize on the opportunities ahead in this rapidly recovering M&A landscape.

After several years of reduced activity and blocked deals, watchers believe Trump’s second term in office will lead to a flurry of new deals. Trump campaigned on a business-friendly agenda that promised ample deregulation.  “The regulatory posture of the Federal Trade Commission and the Department of Justice Antitrust Division that during the past four years challenged many proposed business combinations will likely be more relaxed under the incoming administration,” Goldman Sachs chief U.S. equity strategist David Kostin wrote in an analyst note published Wednesday.  Goldman Sachs projects a 20% increase in M&A activity in 2025, according to the same note. Over the last couple of years, M&A activity had fallen significantly. Goldman estimates in 2024 it dropped 15% compared to the year prior.

https://fortune.com/2024/11/07/donald-trump-ma-mergers-acquisition-doj-ftc-lina-khan/