The regulatory landscape of mergers and acquisitions (M&A) has evolved significantly under the contrasting leadership of Biden and Trump. While Biden's administration emphasized antitrust enforcement and sustainability, Trump's past presidency fostered deregulation and corporate consolidation. As Trump prepares for a return to the presidency, his proposed policies and prior approaches offer a glimpse into how M&A activity might shift in the coming years. This article explores the impact of Biden's regulatory policies on M&A trends and analyses the potential effects of Trump's proposed future agenda, drawing on insights from his previous term to predict how his leadership could reshape corporate strategies and market dynamics.
M&A Transactions During Biden’s Administration
During Joe Biden's presidency, there has been a notable shift in the approach to enforcing antitrust laws, especially in restraining excessive industry consolidation. Regulators such as the Department of Justice (DOJ) and the Federal Trade Commission (FTC) imposed stricter rules on M&A, requiring more elaborated assessments of proposed transactions. This increased scrutiny primarily applied to deals that would result in a company having more than 30% market share of any particular industry. While this increased regulation indicates a harder line being taken against the concentration of markets, it is ironic that the number of M&A deals flagged for antitrust scrutiny during Biden's term has been consistent with historical norms experienced under both Democratic and Republican administrations. The only difference, however, is in the way these transactions have been dealt with by the regulators.
Under Biden, the increased prospect of regulatory intervention has indeed persuaded companies to abandon planned mergers or acquisitions in favor of probable antitrust opposition. What it does reveal, however, is that the administration's regulatory approach has discouraged M&A that would likely have been challenged by the government. Yet, this impact has not slowed down the total number of reported mergers under Biden's presidency. Between 2017 and 2022, the number of reported M&A transactions surged by a remarkable 53%, reflecting higher activity relative to Donald Trump's administration.
Exhibit 1: Merger Transactions Reported
In 2023, the number of merger challenges that had been resolved through either structural or behavioral remedies decreased sharply. Historically, structural remedies like divestitures of specific business units and behavioral remedies placing conditions on company conduct have been used as ways to address competitive concerns without outright blocking deals. Yet, with Biden, the regulators seem less likely to send settlements along with these measures, signaling a move toward more enforcement and less negotiation. Similarly, the number of abandoned transactions has increased considerably as firms pull proposals in advance in expectation of regulatory problems.
Another emerging trend under the Biden administration is the decrease in criminal antitrust case fillings. According to the 2023 data, significant decreases are noted in corporations and individuals charged with criminal antitrust violations. This reduction runs contrary to the very vocal stance that Biden has considered the need to confront anticompetitive practices. How that reduction comes to be remains uncertain, but for at least this area, it represents a divergence between policy rhetoric and enforcement outcomes.
Another emerging trend under the Biden administration is the decrease in criminal antitrust case fillings. According to the 2023 data, significant decreases are noted in corporations and individuals charged with criminal antitrust violations. This reduction runs contrary to the very vocal stance that Biden has considered the need to confront anticompetitive practices. How that reduction comes to be remains uncertain, but for at least this area, it represents a divergence between policy rhetoric and enforcement outcomes.
Exhibit 2: Corporations and Individuals Charged
Nevertheless, the antitrust agencies have been very active in prosecuting Sherman Act violations involving anticompetitive conduct, such as price-fixing, monopolization, and attempted monopolization. These efforts illustrate a broader emphasis on the part of the administration to confront injurious practices throughout numerous sectors. Nonetheless, despite Biden's more outspoken disapproval against anticompetitive deals, the data indicate little difference in the antitrust enforcement results for the Biden administration compared to Trump. While stricter regulatory policies and their deterrent effects have reshaped the M&A landscape, the overall enforcement outcomes remain aligned with historical norms. The shift, therefore, appears to be more in perception and approach rather than measurable action.
Donald Trump’s Policies: A Snapshot of His Past Agenda
Trade Policies
Donald Trump’s trade policies are centered around protectionism, characterized by high tariffs aimed at promoting domestic industries. These include substantial tariffs of over 60% on imports from China, baseline tariffs of 10–20% on all imports, and penalties of up to 200% for companies relocating production abroad. While these measures are intended to boost U.S. manufacturing and reduce reliance on foreign supply chains, they may provoke retaliatory actions from trade partners, potentially disrupting global trade networks. On the positive side, such policies could stimulate growth in domestic industries by encouraging investment and creating local jobs, albeit with the trade-off of higher consumer prices.
However, an analysis by Lombard Odier suggests that the inflationary effects of such tariffs might be more subdued than anticipated. Exhibit 3 illustrates the realized inflation rates during Trump’s first term (2017–2020) compared to the broader 2005–2024 period. The data indicate that while import prices rose by an average of 0.4% annually during Trump’s first term, the Consumer Price Index (CPI) increased by 1.8% annually, remaining below the long-term average inflation rate of 2.3%. This muted inflation can be attributed to domestic distributors absorbing higher import costs and the appreciating U.S. dollar reducing the relative price impact of tariffs.
Exhibit 3: Realized Inflation during the 2005-2024 and 2017-2020 periods
Additionally, simulations of a 10% tariff increase, reveal that the immediate impact on inflation could be around 1%. However, these effects are projected to diminish over time as the U.S. dollar appreciates and offsets some of the price increases. The simulations suggest a long-term inflationary effect closer to 0.7%, demonstrating that the broader economic system adjusts to mitigate some of the shocks introduced by tariff hikes.
Energy Policies
Trump’s energy agenda prioritizes "energy security" over renewable initiatives, with plans to boost fossil fuel production by expanding drilling and rolling back environmental regulations. These actions could stabilize energy prices domestically and reduce reliance on foreign oil imports, fostering energy independence. However, critics argue that this approach may hinder progress toward renewable energy goals and exacerbate environmental concerns. The withdrawal from international climate agreements and reduced incentives for green energy projects could diminish U.S. leadership in sustainable technology development, although traditional energy sectors may see a resurgence in growth and employment opportunities.
Climate Policies
Trump’s climate policies emphasize deregulation, reducing restrictions on carbon emissions and supporting traditional energy industries like oil and gas. This approach could lower operational costs for businesses in these sectors, potentially boosting their profitability and creating jobs. However, reduced focus on renewable energy and environmental protections may slow progress toward sustainability goals. Over time, the economic costs of climate change—including mitigation and adaptation—could outweigh the short-term benefits of deregulation. While the traditional energy sector may benefit, the lack of investment in green technologies could leave the U.S. less competitive in global markets prioritizing sustainability.
Healthcare Policies
Trump’s healthcare initiatives aim to preserve Medicare while introducing new programs like taxpayer-funded fertility treatments. These policies could improve access to specialized healthcare for certain groups, such as retirees and families seeking fertility support. However, his continued opposition to the Affordable Care Act (ACA) may result in higher uninsured rates and increased medical costs for many Americans, potentially reducing consumer spending in other areas. Balancing these initiatives would require addressing the funding gaps created by new programs and ensuring broader access to affordable healthcare.
Immigration Policies
Trump’s immigration policies focus on stricter enforcement, including plans for large-scale deportations. These measures are intended to address illegal immigration and open up job opportunities for American workers. Positively, this could reduce competition in the labor market and potentially improve wages for some domestic workers. However, the downside includes potential labor shortages in industries like agriculture, construction, and food production, which heavily depend on immigrant labor. These shortages could lead to rising costs in these sectors, contributing to inflation. The displacement of immigrant populations may also create challenges for housing and service industries that rely on affordable labor.
Taxation Policies
Trump’s taxation proposals include extending the Tax Cuts and Jobs Act (TCJA) and introducing new measures like eliminating taxes on tips and Social Security income for seniors. These changes aim to stimulate economic growth by reducing the tax burden on businesses and individuals. For instance, extending the TCJA could attract more investment and enhance corporate competitiveness, while eliminating Social Security taxes may benefit retirees’ disposable income. However, these policies are projected to create a significant revenue gap, estimated at $4 trillion over a decade, which could strain public services and increase the national deficit. Balancing these benefits and drawbacks would require careful fiscal management.
Geopolitical Policies
Trump’s foreign policy seeks to reduce U.S. involvement in prolonged conflicts while prioritizing economic pressure on adversaries. In Ukraine, his approach to negotiating a resolution could decrease military expenditures and potentially lower energy prices in Europe. Similarly, his support for Israel and a firm stance against Iran aim to stabilize key geopolitical regions, which may benefit global energy markets. However, these policies carry risks of emboldening adversaries and creating regional instability. For instance, reduced U.S. involvement in NATO and other alliances could weaken collective security, though it may allow for reallocation of resources to domestic priorities.
Energy Policies
Trump’s energy agenda prioritizes "energy security" over renewable initiatives, with plans to boost fossil fuel production by expanding drilling and rolling back environmental regulations. These actions could stabilize energy prices domestically and reduce reliance on foreign oil imports, fostering energy independence. However, critics argue that this approach may hinder progress toward renewable energy goals and exacerbate environmental concerns. The withdrawal from international climate agreements and reduced incentives for green energy projects could diminish U.S. leadership in sustainable technology development, although traditional energy sectors may see a resurgence in growth and employment opportunities.
Climate Policies
Trump’s climate policies emphasize deregulation, reducing restrictions on carbon emissions and supporting traditional energy industries like oil and gas. This approach could lower operational costs for businesses in these sectors, potentially boosting their profitability and creating jobs. However, reduced focus on renewable energy and environmental protections may slow progress toward sustainability goals. Over time, the economic costs of climate change—including mitigation and adaptation—could outweigh the short-term benefits of deregulation. While the traditional energy sector may benefit, the lack of investment in green technologies could leave the U.S. less competitive in global markets prioritizing sustainability.
Healthcare Policies
Trump’s healthcare initiatives aim to preserve Medicare while introducing new programs like taxpayer-funded fertility treatments. These policies could improve access to specialized healthcare for certain groups, such as retirees and families seeking fertility support. However, his continued opposition to the Affordable Care Act (ACA) may result in higher uninsured rates and increased medical costs for many Americans, potentially reducing consumer spending in other areas. Balancing these initiatives would require addressing the funding gaps created by new programs and ensuring broader access to affordable healthcare.
Immigration Policies
Trump’s immigration policies focus on stricter enforcement, including plans for large-scale deportations. These measures are intended to address illegal immigration and open up job opportunities for American workers. Positively, this could reduce competition in the labor market and potentially improve wages for some domestic workers. However, the downside includes potential labor shortages in industries like agriculture, construction, and food production, which heavily depend on immigrant labor. These shortages could lead to rising costs in these sectors, contributing to inflation. The displacement of immigrant populations may also create challenges for housing and service industries that rely on affordable labor.
Taxation Policies
Trump’s taxation proposals include extending the Tax Cuts and Jobs Act (TCJA) and introducing new measures like eliminating taxes on tips and Social Security income for seniors. These changes aim to stimulate economic growth by reducing the tax burden on businesses and individuals. For instance, extending the TCJA could attract more investment and enhance corporate competitiveness, while eliminating Social Security taxes may benefit retirees’ disposable income. However, these policies are projected to create a significant revenue gap, estimated at $4 trillion over a decade, which could strain public services and increase the national deficit. Balancing these benefits and drawbacks would require careful fiscal management.
Geopolitical Policies
Trump’s foreign policy seeks to reduce U.S. involvement in prolonged conflicts while prioritizing economic pressure on adversaries. In Ukraine, his approach to negotiating a resolution could decrease military expenditures and potentially lower energy prices in Europe. Similarly, his support for Israel and a firm stance against Iran aim to stabilize key geopolitical regions, which may benefit global energy markets. However, these policies carry risks of emboldening adversaries and creating regional instability. For instance, reduced U.S. involvement in NATO and other alliances could weaken collective security, though it may allow for reallocation of resources to domestic priorities.
Trump’s Impact on Future M&As in the U.S.
Post Biden, drastic changes within the cabinet are expected across all positions. As mentioned, Biden’s administration imposed strict antitrust regulation, limiting M&A activity. Some notable deals stopped by antitrust regulation include Amgen’s acquisition of Horizon Therapeutics, which had to make several concessions to go through, or Microsoft’s acquisition of Activision Blizzard, that is still a pending decision for the FTC, the only remaining country to approve the deal. This policy has been harshly pursued by the FTC’s chair Lina Khan and current DOJ Assistant Attorney General Jonathan Kanter.
With Trump incoming, it is almost certain that he will be firing Lina Khan and other members of DOJ and appointing so-called “business-friendly” individuals. Shares of companies whose mergers and acquisitions were blocked under Biden rose sharply with Trump’s election win, including Kroger and Albertsons. David Kostin, Goldman Sachs’ chief US equity strategist went so far as to say that M&A activity should rebound by 20% in 2025, compared with the 15% decline in 2024. This is partly due to the improving economic conditions but also the expected more relaxed stance taken by Trump’s administration.
Though specific names have not been provided for the FTC chair, the DOJ is expected to be appointed with Trump’s personal lawyers who helped him through the criminal prosecutions. The current nominee for DOJ AG is Pam Bondi, a change from previous nominee Matt Gaetz, who stepped down and was known to back strict antitrust policy as that introduced by Khan and Kanter. However, Bondi, a long-time Trump loyalist, has no clear past stance on M&A. Trump has expressed skepticism over some high-profile antitrust cases, such as the breakup of Alphabet, showing the potential power the incoming president may have over how the cases are run. Attorneys expect Trump to pull back on policies, such as the unwillingness to settle with merging companies and others. Nevertheless, the president-elect is not expected to drastically change the route of antitrust policy, given many merger cases were also brought under his first term, and incoming Vice President JD Vance has previously praised Khan’s efforts. We are still yet to see the concrete stance Trump will take with his appointees, but it is clear that Trump will try to steer towards a more M&A friendly environment than that of Biden’s.
M&A in Various Industries: The Winners and the Losers
One of the big winners from this election is the oil and gas industry, with increasing support for gas exports and oil drilling under his administration. Trump has clearly opposed the current Inflation Reduction Act and promised to revoke it when he returns to office. Reports are showing that Trump and his team are devising a package to support liquified natural gas projects and oil drillings, proving to be one of Trump’s key issues he wants to address when he takes office from day one. Increased activity within the oil and gas industry is expected to help M&A within the sector to flourish: companies will aim to consolidate and take advantage of Trump’s lenient policies through economies of scales.
As for renewables, the image is the complete opposite. Trump has clearly voiced his disapproval for the renewable sector, promising to even ban offshore wind power. Under the Biden administration, significant growth within renewables M&A could have been observed – the IRA gave companies the ability to invest substantially in clean energy, creating a multitude of new renewable assets. Though it is virtually impossible for Trump to reverse the 4-year long subsidy program (IRA) impacts, the progress within the industry is expected to slow down. Hence, we can assume that M&A for the sector is expected to decline under the Trump administration as the creation of new renewable assets significantly slows down, a key driver of past M&A activity within the sector.
Regarding the healthcare industry, the future of dealmaking is mixed. A Trump administration with lower corporate taxes and deregulation could amplify public market optimism and encourage healthcare companies to go public via IPO, an especially important event for many startups in the healthcare industry such as biotech. Plus, if Lina Khan is to be replaced with a more M&A friendly FTC head, then we could see the continuation of more large-cap M&A transactions. For example, there was a lot of public market optimism over the potential combination of health insurance giants Humana and Cigna that were in talks last year but fell apart over price and then resumed efforts again this October. After the recent election results, Humana shares rose as a result due to expectations of less antitrust scrutiny. However, as of November 11, Cigna recently reported that it will not be pursuing a combination with Humana. Beyond health insurance, a change in FTC leadership may encourage more M&A deals in the biopharma industry as well, and create a more encouraging environment for small biotech companies to exit via M&A and engage in licensing deals. However, it is important to note that even under a Biden appointed Lina Khan to FTC chair, the agency still received bipartisan support in antitrust enforcement and investigating large profile mergers such as Amgen’s $28 billion acquisition of Horizon Therapeutics. In turn, even if the chair to the FTC is replaced, it is likely that the friendliness of the agency to M&A will be more of a marginal improvement. Additionally, targeting the PBM industry has also received broad bipartisan support so it’s likely the next administration will also be continuing to support vertical merger enforcement when it comes to the major PBMs of Caremark, Express Scripts and Optum.
Other Factors Influencing Future U.S. M&As
One of the largest factors influencing acquisition activity is interest rates. When it comes to interest rates, there are 2 points of influence: the Federal Reserve and the bond market. The Federal Reserve’s direct influence on interest rates largely only plays a role in setting the amount banks must pay in the short term to borrow money from each other for daily operations, i.e. the federal funds rate. The federal funds rate is then often a baseline for how much lenders can charge for loans, but not always. For example, mortgage rates in the US rose after the Federal Reserve cut rates in September since the start of the pandemic due to the trends in the overall bond market. Even now, after the Federal Reserve cut rates on November 7, mortgage rates are expected to continue rising due to trends in the bond market. What this means is that, even though the short-term interest rate is coming down, the investors believe the long-term environment is still risky which means they will sell longer maturity bonds which pushes down on prices and yields rise. This long-term yield on government bonds is what has a larger influence on the actual long-term interest rate applied to loans such as mortgages. Coming to the Trump administration, Trump has proposed policies such as sweeping tariffs on goods imported to the US, especially towards China which could have an inflationary effect on the US economy. If inflation rises, not only will the Federal Reserve be forced to keep rates higher, but the bond market will also likely push long-term yields higher. However, as of now, it appears the Fed will continue to be “gradual” in their pursuit of future rate cuts. As they carefully monitor inflation and the labor market, the Federal Reserve is ready to pause rates if inflation elevates and continue cuts if the labor market falters. What this means is that while more interest rate cuts are expected in 2025, the future Trump administration may cause the Federal Reserve to be cautious in their path of future cuts as the Trump administration’s policies come to light. Thus, as rates come down, then it is expected to be a tailwind on debt-financed transactions such as private equity and M&A.
When it comes to global dealmaking, a Trump administration will likely pursue a swath of tariff measures and regions like the European Union (EU) and China will likely apply tariffs back in retaliation as well. In turn, there could be a rise in “defensive M&A” where companies aim to maintain their global market access by acquiring operations or manufacturing capabilities in other tariff-levying countries. For example, there was commentary by panelists at IPEM China 2024 discussing that they were hopeful for cross-border deals between Europe and China could return as China plans to improve their economic growth with a $1.4 trillion investment plan which will likely also flow into Europe.
Conclusion
Contrasting M&A policies by the Biden and Trump administrations epitomize how regulatory philosophy impacts corporate strategy and sectoral dynamics. Biden's tough antitrust enforcement made market competition a priority, forestalling consolidation in key sectors and thereby giving a fillip to the growth of clean energy. On the other hand, the expected leniency under Trump could ensure a rebound in M&A activity, mainly in traditional energy, and dampen investments in renewable energy. Both approaches epitomize different priorities: one that Biden has for fairness and sustainability, while another for economic growth and deregulation by Trump. In conclusion, the changing policy landscape reflects the strong impact of presidential leadership on corporate decision-making and market trends.
Contrasting M&A policies by the Biden and Trump administrations epitomize how regulatory philosophy impacts corporate strategy and sectoral dynamics. Biden's tough antitrust enforcement made market competition a priority, forestalling consolidation in key sectors and thereby giving a fillip to the growth of clean energy. On the other hand, the expected leniency under Trump could ensure a rebound in M&A activity, mainly in traditional energy, and dampen investments in renewable energy. Both approaches epitomize different priorities: one that Biden has for fairness and sustainability, while another for economic growth and deregulation by Trump. In conclusion, the changing policy landscape reflects the strong impact of presidential leadership on corporate decision-making and market trends.
Written by: Alessandro Cera, Rishav Kumar, Thomas Agosti, Vasara Silininkaite
Sources:
- Bain & Company
- BBC
- CNN
- Financial Times
- Lombard Odier
- PWC
- Reuters
- The New York Times