Despite much change and uncertainty introduced by the Trump Administration, the regulatory environment impacting U.S. M&A and private equity has been an area of relative stability. Remarkably, President Trump has permitted several new regulations adopted late in the Biden Administration to be implemented as intended, including overhauled Merger Guidelines and Hart-Scott-Rodino (HSR) antitrust premerger notifications, as well as the Treasury Department's Outbound Investment Security Program. And, in an instance where there has been a meaningful pivot, few dealmakers are lamenting a substantial rollback of the Financial Crimes Enforcement Network's (FinCEN) beneficial ownership reporting requirements.
Antitrust and competition
The Federal Trade Commission (FTC) and Antitrust Division of the U.S. Department of Justice (DOJ) published new Merger Guidelines in December 2023 that materially revised the agencies' previous guidance on how they analyze the effects of M&A on competition. In many ways, the 2023 Guidelines memorialized the Biden Administration's aggressive approach to business combinations that saw a significant uptick in enforcement to block mergers and a refusal to negotiate with transaction parties. The 2023 Guidelines incorporate the prior administration's points of emphasis on private equity "roll-up" strategies, novel concerns with vertical integration and impacts on labor markets, among others.
We observed on the eve of President Trump's second inauguration that the 2023 Guidelines' survival was uncertain but noted incoming FTC Chairman Andrew Ferguson's warning that the agencies' guidance would be useless if rescinded with each new administration. In keeping with that view, Chairman Ferguson announced in February that the 2023 Guidelines are here to stay for the foreseeable future, stating, "let me be clear: the FTC's and DOJ's joint 2023 Merger Guidelines are in effect and are the framework for this agency's merger-review analysis". The DOJ's antitrust head, Gail Slater, concurred with the FTC in remarks she gave during her confirmation hearing.
Also in February, a new HSR form took effect without any delay or reassessment by the Trump Administration despite reworked document and information requirements that many have characterized as onerous and time-consuming. The revisions have prompted M&A counsel to substitute tried and true one-to-two-week deadlines to submit HSR filings with open-ended covenants to file "as soon as reasonably practicable" or timeframes of 30 days or more.
Although continuity in U.S. antitrust regulation largely has been the order of the day, an important and welcome shift has occurred in one respect: as we predicted, the FTC and DOJ have restored the practice—discontinued during the previous administration—of negotiating settlements to head off litigation by mitigating the anticompetitive effects of proposed deals through asset divestitures and other remedies.
Outbound investments
President Biden declared a national emergency in August 2023 to address the threat to the U.S. posed by "countries of concern" that seek to develop and exploit sensitive or advanced technologies deemed critical to military, intelligence and cybersecurity capabilities. In doing so, he directed the Secretary of the Treasury to establish a program to prohibit or require notification of certain "outbound" investments by U.S. persons into businesses affiliated with China, Hong Kong or Macau that develop semiconductors and microelectronics, quantum information technologies or artificial intelligence.
As we predicted, the FTC and DOJ have restored the practice of negotiating settlements to head off litigation by mitigating the anticompetitive effects of proposed deals.
Just a few weeks before President Trump returned to the White House, the Treasury Department's Outbound Investment rules took effect on January 2, 2025, reflecting a commitment by the prior administration "to protecting America's national security and keeping critical advanced technologies out of the hands of those who may use them to threaten our national security". Shortly after taking office, President Trump issued his "America First Investment Policy", which reinforced the Outbound Investment rules as part of a broader initiative to "reduce the exploitation of public and private sector capital, technology and technical knowledge by foreign adversaries", particularly China.
Because the Outbound Investment rules reach indirect investments by U.S. persons—and by non-U.S. persons located within the U.S.—private equity funds and their investors are taking specific precautions to ensure compliance with the new U.S. regulatory regime. For example, U.S. investors that are not permitted to participate in investments covered by the rules or that do not wish to make an investment requiring notification are increasingly negotiating an "excuse right" with non-U.S. funds that are not themselves bound by the U.S. restrictions.
Beneficial ownership reporting
Leading up to a January 1, 2025 filing deadline, several million companies prepared to comply with the beneficial ownership reporting requirements mandated by the Corporate Transparency Act (CTA) enacted in the waning days of the first Trump presidency.
All entities formed in the U.S. (domestic reporting companies) and any non-U.S. companies registered to do business in one or more U.S. states (foreign reporting companies) would be required to identify and supply personal information for each of their beneficial owners, broadly defined to include each individual equityholder of 25% or more, as well as each and every individual exercising "substantial control" over the entity, directly or indirectly.
Many non-U.S. businesses with U.S. holding company subsidiaries and investment vehicles were acutely susceptible to the additional burden of the CTA's requirements without recourse to a number of exemptions largely reserved for wholly U.S. corporate families.
A series of court decisions in December 2024 and January 2025 that alternately enjoined enforcement of the CTA and then lifted the injunctions left many with whiplash. The confusion was ultimately resolved when FinCEN, in March 2025, issued an interim final rule exempting all entities created in the U.S. from the CTA's reporting requirements. Therefore, pending further developments, only entities previously defined as foreign reporting companies must continue to file beneficial owner reports.
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