Funding bankers say Trump mergers and acquisitions growth already underway

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President-elect Trump doesn’t formally take workplace for one more week, however funding bankers say a growth in Trump-related deal-making is already underway—transactional exercise that was stymied by the regulation-heavy Biden administration is poised to blow up.

This was the conclusion of a panel of funding bankers and personal fairness executives who mentioned the return of company deal-making on the Frontiers of Digital Finance Convention in Miami on Tuesday.

“We’ll have more deals coming to market in 2025 than we’ve had in the last two years,” stated Jeffrey Levine, Managing Director at funding banking big Houlihan Lokey, who spoke on the panel. “More capital has been raised in the last three years than in the history of private equity, but it hasn’t been deployed.” 

The convention, sponsored by a personal lending firm known as Biz2X, which offers on-line lending options to small companies, featured some main gamers in finance and the intersection of finance and politics. Patrick McHenry, the previous North Carolina Congressman and Chairman of the Home Monetary Companies Committee, acknowledged in a keynote speech that Trump’s victory, mixed with Republicans sustaining Home management and gaining a majority within the Senate, will usher in a brand new period of deregulation that can encourage capital formation.

HOW COULD THE INCOMING TRUMP ADMIN IMPACT THE M&A MARKET?

Consultant Patrick McHenry, a Republican of North Carolina and rating member of the Home Monetary Companies Committee, speaks throughout a listening to in Washington, D.C., U.S., on Thursday, June 23, 2022. Federal Reserve chair gave his most express a (Photographer: Eric Lee/Bloomberg by way of Getty Pictures / Getty Pictures)

“Washington is open, and the United States economy is open, McHenry said. “The period of post-financial disaster regulation, lawmaking, and politics is useless and gone.”

During a panel discussion on mergers and acquisitions, David MacGown, Managing Director of Barclays’ Financial Institutions Group, noted that he is seeing a surge in deal appetite, anticipating a lighter regulatory approach from the incoming Trump administration’s Federal Trade Commission, Federal Communications Commission, and the Justice Department’s Antitrust Division.

Biden appointees leading those three agencies have halted almost all M&A activity in recent years; those who chose to defy the regulatory restrictions have faced prolonged legal battles with the Biden deal police.

That said, Trump isn’t expected to provide carte blanche for all deal-making. His regulators are still skeptical about the power of Big Tech and may view Google, Apple, Amazon, Facebook, and other tech giants with suspicion as they continue to grow in size.

LESS REGULATION POWERING US STOCKS AHEAD, SAYS BNY WEALTH CIO

Once Trump finalizes leadership appointments at key agencies, other businesses such as banking, are likely to face less regulatory scrutiny than Big Tech.

MacGown stated that Barclays is currently involved in several transactions that are a direct result of a post-election thaw in deal-making. 

During the panel discussion, Avi Mehrotra, Goldman Sachs’s Global Head of Activism, Shareholder Advisory, and Takeover Defense Practices, said he anticipates consolidation in regional banks—smaller to mid-size banks with under $100 billion in assets. 

MERGERS AND ACQUISITIONS THAT WERE BLOCKED OR CHALLENGED BY THE BIDEN ADMIN IN 2024

Due to their size, regional banks benefit from mergers because of so-called scale synergies. These refer to cost savings and revenue enhancements resulting from the increased size and scale that comes with merging two entities.

MacGown noted that the top four investment banks—Goldman Sachs, Morgan Stanley, JPMorgan, and Bank of America—each have over a trillion dollars in assets, and last year, they made over half of the banking industry’s profit combined.

A Wall Street sign in front of an American flag (Reuters/Mike Segar / Reuters Photos)

McGown views this as a potential concentration risk, observing that relaxing regulations might introduce smaller boutique firms to help lower that risk.

“A part of the worth of consolidating is discovering methods to develop additional, and a part of it’s being much less concentrated on the prime,” he said.

In addition to the regional banks, other areas of expected accelerated M&A activity are in fintech, industrials, and consumer sectors, according to Mehrotra. 

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“The very fact of the matter is that Biden thought he was serving to customers by stopping deal making and all he was doing was making these corporations weaker and fewer capable of compete,” one media government who wished to stay unnamed instructed Fox Enterprise.