M&A flattened in February under the deals-friendly Trump administration

In the aftermath of President Trump’s election, a common Wall Street refrain was that the incoming administration would be great for dealmaking.

Stocks of soon-to-merge companies like Capital One and Discover popped after the election as investors got giddy about the coming mergers and acquisition revival. Goldman Sachs predicted a 20% spike in mergers in Trump’s first year in office. Through softer regulations and a friendlier approach to consolidation, Trump, analysts said, would resuscitate the M&A market that had been put on life support by the Biden administration’s strict antitrust policy led by former FTC Chair Lina Khan.

In January, those predictions appeared prescient. The number of billion-dollar-plus deals in the US surged 29% that month, according to consulting firm EY. Since then, in the face of Trump administration tariffs that have investors and boardrooms spooked, things have turned sour.

According to Bank of America analysts, North American M&A announcement volumes fell to $130 billion last month, the lowest level in two years and down a whopping $50 billion from the month prior. Per S&P Global, four deals valued over $10 billion took place worldwide in January. In February, there were none — the first time since July.

Speaking to Business Insider, Eric Li, the head of competitor analytics at research firm Crisil Coalition Greenwich, said that dealmaking is “frozen” and that the current market is “almost as bad as Covid.”

As noted in the Business Insider report, hiring at investment banks has now slowed and some firms, including Goldman and Bank of America, have recently slashed investment banker head counts (though that trend may have started before Trump’s second term).

Even if the current tariffs, delays, more tariffs monthly cycle dissipates, the Trump admin may not be as easy to predict as past Republican administrations. Last month, current FTC Chair Andrew Ferguson said the agency would maintain the stricter merger guidelines from Khan’s FTC. Still, experts expect Ferguson to be largely partisan, picking fights with Trump’s corporate enemies and less likely than Khan to take on legal battles with long-shot victory odds.

In an interview with CNBC this week, Ferguson appeared to slightly rein in the “M&A floodgates are open” theory, saying:

“If we’ve got a merger or conduct that violates the antitrust laws, and I think I can prove it in court, I’m going to take you to court. And if we don’t, I’m going to get the hell out of the way.”