The mergers and acquisitions (M&A) market is one of many areas facing noteworthy changes due to the second Trump administration's economic policies and priorities. While the President's pro-business stance during his campaign signaled the potential for an increase in M&A activity, the reality reflects a more uncertain future.
This episode of In the Public Interest features a conversation between co-host Michael Dawson and Partner Keith Trammell exploring expectations for the future of M&A deals under the current administration. Drawing upon his extensive experience advising clients in M&A transactions, Trammell shares his insights into the effect of deregulation on deal activity, the long-term impact tariffs will have on the market and potential shifts in shareholder activism, among other topics.
Related Resources
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Felicia Ellsworth: Welcome to In the Public Interest, a podcast from WilmerHale. I'm Felicia Ellsworth.
Michael Dawson: And I'm Michael Dawson. Felicia and I are partners at WilmerHale, an international law firm that works at the intersection of government and business. This week, I'm thrilled to be joined by Keith Trammell: to discuss the impact the Trump administration is expected to have on mergers and acquisitions through 2025 and beyond.
Keith is a partner in our New York and Denver offices. He specializes in both public and private M&A deals. He advises private equity funds, strategic buyers, investors, and boards on a range of topics relevant to their businesses. With over 25 years of experience, Keith has been recognized as a leading lawyer for M&A/Corporate and Commercial by the Legal 500 U.S. He's also been recognized as the best private equity lawyer by Law Week Colorado for nine consecutive years and as a two-time Lawyer of the Year by Law Week Colorado.
Given the uncertainty rippling through markets in the first few months of Trump's second administration, this promises to be a very interesting episode for M&A lawyers, M&A professionals, business executives, and others. Hopefully, the topics we discuss today will help shed light on what to expect for the balance of 2025 and possibly beyond.
Michael Dawson: Keith, thank you so much for joining us. It should be an interesting conversation for those in our audience seeking to understand what's next for the M&A markets.
Keith Trammell: Thank you, Michael. It's good to be here.
Michael Dawson: In the months leading up to Trump's second inauguration, many anticipated that his administration would stimulate M&A activity and that improvements already taking place in the broader economic environment would continue to build and sustain this momentum—especially given Trump's pro-business rhetoric throughout the election. Were people waiting to transact with the idea that it would be more favorable to do so under a Trump administration? And now, several months into the administration, what's the outlook, and has it changed?
Keith Trammell: Good question. What I would say is that momentum was building. It is true that in late 2024, there was unquestionably a great deal of bottled-up eagerness to transact. I think the M&A markets in 2024 were starting to rebound modestly from low points in 2022 and 2023 but still hadn't gotten back to their previous levels.
At a macroeconomic level, interest rates were finally stabilizing. There were discussions about actual real rate reductions. Inflation was keeping in check. Fundamentals in the economy—like unemployment—were still signaling growth. Many believed that a change in the administration from Biden to Trump would mean a degree of regulatory relief, particularly on the antitrust and SEC fronts. I think it was some of the pro-business rhetoric and some of the pro-business supporters of the current president who did more to create the expectation among the business environment and among the economy more broadly that we were going to see a real recovery in M&A.
And while some of that optimism may have been well placed, some of it wasn't. A number of observers, including us, were cautioning clients about what we called the potential for unpredictable, or what I've referred to as idiosyncratic, regulations under the incoming administration. Given the recent upheaval from tariffs, I think uncertainty is perhaps the most notable feature of the current market environment, including the M&A environment.
Michael Dawson: Keith, on the campaign trail, Trump repeatedly called for deregulation of key industries—finance, technology, energy. If realized, many projected that this deregulation would positively affect deal activity. Can you help me understand this?
Keith Trammell: Yeah, in the abstract, I think it goes something like this: Deregulation can encourage M&A activity by reducing barriers to consolidation, lessening regulatory costs, possibly increasing corporate profits, which frees up more capital for investment and that takes the form of acquisitions a lot of times. This can be especially true in industries where deregulation leads to increased competition and opportunities for companies to consolidate and grow inorganically. However, because of the current volatility within U.S. domestic and global markets, I think we're all a little uncertain how much—if at all—deregulation that is happening can actually stimulate corporate profits. Perhaps it is reducing the blow to balance sheets and corporate revenues caused by the tariffs and the prospects of a burgeoning trade war, but, at the moment, it's a little hard to track.
Michael Dawson: What is the connection between deregulation of these sectors and the broader M&A environment?
Keith Trammell: It's a little early to prognosticate, but I think it's safe to assume that for companies in the financial sector, the health of that sector is going to reflect the broader macroeconomic environment, which is unfortunate, and bumpy, and uncertain. The real loser there may be crypto, which otherwise might have stood to gain—and may still gain—if markets are deregulated to the extent where crypto is given the opportunity to play a larger and more formal role. But right now, broader market volatility is hurting the crypto sector as much as the broader environment is being hurt.
In tech—especially big tech—I think many observers have actually forgotten that much of the Biden-era skepticism and hostility (some people have used that word; I don't know that I would use that word), but a lot of that began during the first Trump administration and only continued into the Biden years. This skepticism is arguably growing, I think, even more intense under Trump 2.0. What was notable was during the first week in office, Vice President Vance stated that the administration believes—and this is a quote—"fundamentally [that] big tech does have too much power." So I wouldn't expect to see a significant reduction in the government's regulatory posture towards technology, especially big tech companies.
Michael Dawson: I thought that quote from Vice President Vance on big tech was interesting. He almost sounds neo-Brandeisian with that quote.
Keith Trammell: Yeah, well, there is a streak of populism that has taken hold, I think, in both parties, and that's manifested itself in both administrations in different ways, but it's there and will be something that technology companies, as they grow, will have to continue to deal with.
One of the more interesting sectors that I'm watching is energy. U.S. domestic energy production, many believe, will expand in large part due to the Trump administration's eagerness to expand liquefied natural gas—which I'll refer to shorthand as LNG—and make the U.S. a net exporter of oil and gas. However, the United States does not have free trade agreements with some of the more logical LNG-importing countries, and the recent tariff announcements, plus threats of retaliation, will not only complicate the efforts to expand LNG exports, but may have cascading effects domestically—such as stalling long-awaited domestic investments in transportation and pipeline infrastructure that are needed to bring LNG to port so it can be put on ships and shipped internationally. The concern here is that deregulation of the energy markets, because of tariffs, may not actually be able to fulfill the mission that many in that industry had wanted it to fulfill for many years.
Michael Dawson: Interesting. And what are some examples of countries that are logical LNG importers with which the U.S. does not have a free trade agreement?
Keith Trammell: I think the most logical—and there's some geopolitical backdrop to this—is countries in Europe, where there is a low-tariff environment but not a free-trade tariff environment. And with the Ukraine war creating geopolitical concerns about Europe's reliance on Russian oil and gas, LNG exported from the U.S. was at least poised to be a stopgap measure, perhaps even more. There are other countries along the coastal perimeter surrounding China—Cambodia, Vietnam, Thailand, Korea—that would be logical trading partners for LNG exports, but they have unfortunately also been wrapped up in a lot of the trade posturing that, for now at least, is stifling those efforts.
Michael Dawson: And you mentioned the low-tariff environment in Europe. It's hard to discuss economic policy without talking about tariffs. You've mentioned them a few times. Some fear tariffs will stifle the M&A environment, which could outweigh any positive effects from deregulation. To what extent, if any, do you think those concerns are valid?
Keith Trammell: I think they're definitely valid, and I think in the last few weeks we've seen some of the systemic risks to the global financial system posed by U.S.-imposed tariffs and the threat of a broader trade war. Those risks are far more consequential in the negative than the prospective gains we might enjoy from deregulation on the other side of the ledger.
But to talk more specifically about it, I think it's important to step back and consider the role that mergers and acquisitions play in our economy. M&A helps economies by helping companies enter new geographies, enter new customer segments—it helps boost, in other words, overall economic activity. It also brings together companies with complementary technologies, accelerating innovation; creates synergies such as cost savings through streamlined processes, reduced overhead, increased purchasing power—in other words, market efficiencies that everyone gains from. It also creates larger, more financially stable companies who are better able to access capital markets and support further investment in growth. So, long story short, although M&A is not the only piston in the economic growth engine, if it breaks down, the engine won't perform and growth will stall.
Many M&A lawyers expected that 2025 would be a good year—not a great year, but a good year—for M&A and also IPOs. However, with uncertainty caused by tariffs, the level of activity that we expected is now, I think unfortunately, unlikely. There have been some notable deals in the market, including our deal with Nordstrom for the Nordstrom family and Liverpool to take the company private. Yet, the first quarter of this year saw fewer than 80 M&A deals announced, which was the lowest quarterly total since the second quarter of 2020. Not a great statistic, because again, we were coming out of 2022 and 2023, which were low years, and Q1 fell below even those. So, with continued market volatility and the ever-changing tariff picture on imported goods, I don't think things are going to change, at least not for Q2. If things settle down, there may be hope for recovery in Q3 and Q4.
Michael Dawson: Let's talk for a moment about shareholder activism and M&A. In the first Trump administration, there's a perception it was more company-friendly, making shareholder activism more difficult by, for example, tightening the holding requirements for smaller shareholders to submit shareholder proposals. But during the campaign, we had shareholder activists like Nelson Peltz and Bill Ackman coming out and supporting the president. What do you expect to see in the second Trump administration coming from the SEC and others that bear on shareholder activism?
Keith Trammell: The consensus so far is that the SEC will behave much like it did in Trump 1.0. But interestingly, we're in the midst still of the first annual reporting and proxy cycle since the Trump executive order entitled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." That executive order directs federal agencies to be very proactive in identifying non-compliant companies who don't comply with the DEI mandates from the Trump administration. Many companies, in response, have either substantially reduced or changed their DEI disclosure this cycle in anticipation of the Staff taking its charge under the executive orders seriously. However, a lot of the companies have kept their broader ESG disclosures and policies and practices in place, so it'll be interesting to see the Staff's response to that, and how much further it digs in—if at all—once the cycle is complete.
As far as activism goes, I think it's really a similar story in some respects to the M&A outlook. Broadly speaking, I think activists do stand to benefit some from Trump extending the corporate tax relief and possibly even lowering rates. Increased liquidity from a lower tax bill means more money is available for dividends and share repurchases to the extent that that helps in this environment. And activists do also have a tendency to leverage market disruption because it provides a greater degree of strategic optionality that more stable markets don't offer them. But even though some chaos is good for activists, I think there's an argument emerging that perhaps what we've seen in the recent weeks may be too much disruption and chaos—even for activists. In 2024, the number one objective for activists was to force companies to pursue M&A, and when M&A is being sidelined as a general matter, it's really hard for an activist to come in and make a compelling argument to a company that they've taken an interest in to divest of a non-core asset at below a favorable value or put themselves up for sale in a market where they may not be rewarded from a valuation perspective.
Michael Dawson: Interesting. Let me ask you a follow-up question on the DEI point. Now, there's a view that some of the corporate initiatives around DEI and the material and their disclosures was market-driven—that investors wanted it, and that companies were responding to that market force. That maybe part of it was Biden administration initiatives and other messaging, but there was this market demand for the initiatives and the disclosures. And I read recently that a major financial institution's shareholders recently beat back an anti-DEI proposal from an activist.
So my question for you is: What do you think about the argument that the DEI initiatives were, at least in part, market-driven, and some of those market forces are going to persist notwithstanding a change in the administration's articulated priorities around DEI?
Keith Trammell: Well, I would agree wholeheartedly that they were market-driven. They were market-driven by large financial institutions. They were market-driven by proxy advisory firms. They were market-driven by listing standards and changes that NASDAQ and the New York Stock Exchange, for example, also asked for. So yeah, I think they were market-driven. I think they were also company-driven. Employee stakeholders are important stakeholders in any company, to the extent that there is significant employee ownership of a public company, for example. Employee voice matters a lot too. So I think the picture is much more complicated, perhaps, than it's been made out to be. There have been very strong market forces in favor of DEI-related not only disclosures but programmatic changes into how companies operate.
Michael Dawson: And that brings us to the end of our discussion. I just wanted to say thanks a lot for sitting down with us to talk about these issues.
Keith Trammell: My pleasure. I guess I'd leave our audience with just one thought: There's a lot of uncertainty out there, and dealing with it is no small task. In talking with many of our clients, they all really appreciate knowing that they're not the only ones struggling with questions like this. And the great thing for our clients is we serve as sounding boards and advisors to lots of other companies and investors and board members wrestling with the same issues. And so we're able to share a lot of very current thinking, and in uncertain times, good advice is perhaps more important than ever and we're always happy to be a source of it.
Michael Dawson: Very good. Mr. Trammell, thank you very much.
Felicia Ellsworth: And thank you, everyone listening, for tuning in to this episode of In the Public Interest. We hope you'll join us for our next episode. If you enjoy this podcast, please take a minute to share with a friend and subscribe, rate, and review us wherever you listen to your podcasts. If you have any questions regarding this episode, please e-mail them to us at inthepublicinterest@wilmerhale.com.
Michael Dawson: For our WilmerHale alumni in the audience, thank you for listening. We are really proud of our extended community, including alumni in government, the nonprofit space, academia, other firms, and leadership positions in corporations around the world. If you haven't already, please join our alumni center at alumni.wilmerhale.com so we can stay better connected.
Special thanks to the producers of this episode, Shanelle Doher and Conor Gutierrez. Thanks for the sound engineering and editing by Bryan Benenati, marketing by Emily Freeman and her team all under the leadership of executive producers Jake Brownell, Kaylene Khosla, and Matt O'Malley. Thank you for listening.
Felicia Ellsworth: See you next time on In the Public Interest.
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