Companies are Holding Off on M&A Amid Trump Policy Uncertainty

Second-quarter deal volumes in the U.S. have slumped to a four-year low, as the market awaits progress on the president's agenda.

The value of global M&A increased by 8.4% in the first half, though the rise was driven by a series of mega-deals that masked a fall in transaction numbers likely owing to political uncertainty.

It appears that many CEOs and corporate boards, particularly in the U.S., are awaiting more clarity on big government policy initiatives before executing on deal plans, despite signs the economy is in good stead. According to an analysis by Mergermarket, 8,052 deals were completed in the six months through June worth a combined $1.49 trillion, down from 9,169 deals in the same period last year.

Caution was clearly on display in the U.S, where executives are patiently awaiting progress on Donald Trump’s plans to slash corporate tax rates, relax regulations and invest more in national infrastructure.

In the three months through June, for example, U.S. deal value fell by 6.9% year-over-year to $290.6 billion, it’s lowest second-quarter level since 2013. Deal value for the entire first half, however, rose 2.4% in the wake of several monster transactions, including health care group Becton, Dickinson and Co.’s $23.6 billion bid for rival C.R. Bard and Amazon’s $13.5 billion bid for Whole Foods Market.

Other big global deals executed in the first half included British American Tobacco’s $60.6 billion bid for Reynolds American.

“Companies have been future-proofing in the wake of rapid changes to technology and politics to keep ahead of rivals.”

“Companies have been looking at ‘future-proofing’ in the wake of rapid changes to technology and politics to keep ahead of rivals,” Mergermarket said.

Indeed, a recent analysis by EY showed that non-tech companies accounted for 23% of the combined value of deals completed in the tech sector in 2016, rising from 15% in 2015, as the distinction between tech and some non-tech industries blurs.

An ongoing desire to stay competitive in an increasingly digitized world could lead to an uptick in deal activity, should the Trump administration successfully achieve key policy goals, such as tax reform.

“With more activity expected in the pipeline, what has given dealmakers pause is the increasing unpredictability of the administration’s policy agenda, as well as its political future,” Mergermarket said.

In contrast, signs of political stability in Europe helped inspire a 30.1% jump in first-half deal value. European economies also are showing promising signs of recovery amid the recent election failures of populist political parties in France and The Netherlands.

On a sectoral basis, executives in the energy and mining sectors should be on high alert, with deal volumes jumping in the first half by 51.9%, as companies seek scale to increase efficiencies amid a continued drag on commodity prices.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    We are in a period of rapid change. Customer needs, technologies, competitors and internal capabilities require companies to review and update their strategies for the new realities. In this workshop, strategy experts Steve Rutan and Denise Harrison will show you a systematic approach to strategic planning to help you refine or redefine your business strategy and approach including:

    • Learn what you need to know to develop an effective strategic plan. Put the right players on the strategic planning team.
    • Develop strategies that leverage your company’s unique position in the marketplace. Lift your management team beyond “business as usual” thought processes and activities.
    • Translate your strategies into action. Achieve your vision for success and generate superior financial results.
    • Identify exactly what you need to do now to position your company for future success.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.