American companies delay merger and acquisition plans due to economic uncertainty.
US businesses are hitting the pause button on their merger and acquisition (M&A) plans amidst uncertain economic conditions. While global M&A activity has been on the rise, the United States is experiencing a slowdown in deal-making due to economic and regulatory uncertainties.
Data from the London Stock Exchange Group (LSEG) reported by The Wall Street Journal shows that overall deal activity in the first quarter of this year increased by 3.9% year-over-year. However, this growth is being primarily driven by Europe, which saw an 8.4% increase, and the Asia-Pacific region, where deal activity was up by 5.2%. In comparison, M&A activity in the US has taken a significant hit, with Dealogic reporting that the country saw its lowest level of deal-making in over two decades during the first two months of 2025. Companies in the US completed only 1,172 deals worth $226.8 billion, a decrease of about one-third in both volume and size compared to the previous year.
Many had anticipated a resurgence in M&A activity under a potentially more favorable business environment with the Trump administration. The removal of Lina Khan as chair of the Federal Trade Commission (FTC) was also expected to spur deal-making. However, the current economic landscape, characterized by fluctuating tariff policies, widespread government layoffs, and a downturn in consumer confidence, has led companies to put their M&A plans on hold.
The uncertainty surrounding economic conditions and regulatory policies has created a cautious approach among US companies. Many are choosing to wait and see how the landscape evolves before committing to significant deals. The lack of clarity on issues such as trade agreements, tax policies, and overall market stability is making it challenging for companies to move forward with confidence in their M&A strategies.
Despite the overall optimism about the potential for increased deal-making activity, the current environment in the US is causing a sense of hesitation and delay. Until there is more clarity and stability in economic and regulatory conditions, businesses in the US are likely to continue holding off on their M&A plans. This uncertainty is not only impacting the companies directly involved in deal-making but also sending ripples throughout the broader business landscape, affecting investors, consumers, and overall market sentiment.