Will M&A Activity Ever Turn Around This Year?

The 37th Annual Tulane Corporate Law Institute conference — a.k.a., the “Davos for Dealmaking,” as Andrew Ross Sorkin once dubbed it — begins today.

Only this year, there’s not much dealmaking to talk about down in New Orleans. Which means there’s a lot for the industry’s top bankers, lawyers, advisers, and other practitioners to talk about. The big question of the conference: Why isn’t 2025 seeing the mergers and acquisitions revival everyone expected?

The Not-So Big Easy Economy

Call it a vibe shift. Or maybe even vibe schizophrenia. Back in December, Wall Street was ecstatic about the deal-friendly environment that the Trump 2.0 administration was expected to usher in. Bankers expected deal volume to reach $4 trillion this year, up from around $3.45 trillion in 2024, per Dealogic data, and a return to the pre-President Biden, pre-Lina Khan era of much more relaxed antitrust enforcement at the FTC and DoJ. The Las Vegas Elvis Wedding Chapel for rainmakers would soon be open for business, they thought. 

But two months into the Trump administration, the excitement has fizzled. This year has seen the quietest January and February for dealmaking since the financial crisis. Last week, analysts at Keefe, Bruyette & Woods even downgraded their assessment of Goldman Sachs shares, noting the dearth of deals could hurt the investment bank’s bottom line. If anything, uncertainty has surpassed excitement as the buzzword among dealmakers:

• With the tumultuous arrival of tariffs and a trade war, dealmaking has been forced to take a backseat as business leaders prioritize navigating a rocky new landscape, EY noted in its latest M&A activity insights report.
• There are real, tangible examples of the trade war’s chilling effect, too: According to a Reuters report on Wednesday, one private equity firm backed off plans to acquire a snack-maker and merge it with a Canadian rival in light of the trade war. Another source told Reuters that a $1 billion aerospace conglomerate cooled on plans to sell itself amid the new tariffs.

According to Dealogic, just 1,603 deals have been signed this year through Friday, down 19% year-over-year, while total deal volume has fallen to $248.78 billion, down 29% year-over-year.

Private Practice: There is one bright spot in the dealmaking ecosystem: private equity, which is still sitting on some $1.2 trillion in dry powder. In a report on the PE industry published Monday, Bain & Company analysts said “dealmaking appears to have turned the corner,” pointing to a strong bounceback in both investments and exit values in 2024 that could spur momentum through the rest of this year. The downside risks this year, according to Bain? “[T]he dreaded U word (uncertainty) continues to keep markets on edge.” Yeah, we expect they’re pouring some pretty strong Sazeracs down at Tulane this year.