Dealmakers bet that Trump will fuel mega-deal rebound

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Dealmakers are betting that a pick-up in megamergers will gather pace under Donald Trump’s presidency, after a rebound in larger deals helped push the value of takeovers back over the $3tn mark this year.

The value of mergers and acquisitions globally is up 11 per cent so far this year, an improvement from the doldrums of 2022 when dealmaking fell short of the $3tn threshold for the first time in a decade.

The value of so-called megadeals, worth more than $5bn, was up 19 per cent year to date, boosting the figures, even as the total number of deals fell by a fifth to a nine-year low, according to data from the London Stock Exchange Group.

“Especially for large-deal M&A, it’s mostly about CEO and board
confidence levels and — putting your politics aside for a minute — there is a lot of optimism among CEOs for their businesses with the new administration,” said Tony Kim, co-president of investment banking at the boutique Centerview Partners.

“I don’t think you can make a call on [it being] a gangbuster year in 2025
but certainly there are a lot of signs that point to that,” he added.

Dealmakers hope that Trump’s return to the White House will mean less regulatory scrutiny of big mergers, after the sceptical stance taken by watchdogs during Joe Biden’s administration.

“There’s an expectation that the regulatory framework will be less burdensome,” said Anu Aiyengar, global head of advisory and M&A for JPMorgan Chase.

The largest mooted deal this year was the proposed $47bn purchase of Japan’s Seven & i, the company that owns 7-Eleven, by Canadian retailer Alimentation Couche-Tard. No deal has been reached, with the Japanese group also receiving a rival buyout offer from members of the founding family.

Other top transactions include US lender Capital One’s agreement to buy rival Discover Financial for $35.3bn and the consumer giant Mars’s deal to acquire the Pringles and Pop-Tarts maker Kellanova for $35.9bn.

While activity slowed in the final three months of the year compared with the third quarter, a flurry of deals followed the US election in November.

“The rumours of the demise of the M&A market were, to a degree, exaggerated,” said Stephan Feldgoise, global co-head of M&A for Goldman Sachs. “There’s been a notable increase in activity since the election.”

The US has accounted for 46 per cent of global activity this year, though dealmaking there was up just 8 per cent. Asia Pacific M&A was down 2 per cent, though activity in Japan jumped 45 per cent to a 19-year high.

The UK again proved a popular place to buy, given beaten-down valuations for London-listed stocks, with deals involving a UK target company up 46 per cent. Europe bounced back, with M&A in the region rising 20 per cent compared with the previous year.

Some of the largest European deals this year were the result of corporate streamlining, such as the sale of Deutsche Bahn’s logistics unit Schenker to Danish group DSV for €14.3bn and private equity group Clayton Dubilier & Rice’s purchase of a controlling stake in Sanofi’s consumer healthcare business at a €16bn valuation.

Jan Weber, who leads M&A for Morgan Stanley across Europe, the Middle East and Africa, said he expects the region’s dealmakers to continue pursuing long-discussed transactions in the new year. “[These ideas] have been on the shelf for some time and now they’re being dusted off again,” he said.

Private equity-backed takeovers rose 25 per cent to $670bn. But the industry faces a multi-trillion-dollar backlog of investments to be sold.

Higher interest rates weighed on deal volumes and there is still a “gap on value between buyer and seller expectations,” said Raphael Bejarano, co-head of global investment banking at Jefferies.

Global investment banking fees are up 12 per cent so far this year to $111bn, above the 10-year average. Goldman Sachs retained its billing as the top global financial adviser for M&A transactions. Morgan Stanley edged out JPMorgan for the second-place ranking.