United States

The United States M&A market has shown increased activity in 2024, but its recovery from 2023 levels has been more gradual than some had expected. Stabilizing inflation, stock market highs, stronger corporate profits and increased confidence have fueled a moderate recovery. At the same time, dealmakers remain cautious due to persistent high interest rates (see our article "Private credit market: latest trends and election forecast") and regulatory, legal (see our article "U.S. capital markets: 2024 and beyond") and geopolitical uncertainty. The upcoming U.S. election in November adds additional uncertainty that could slow the M&A market's further recovery in the short term until there is clarity on which party will hold the White House and Congress.

Impact of U.S. presidential elections on M&A

The 2024 U.S. presidential election is approaching quickly, and the M&A community is speculating on its impact on deal activity. Common wisdom among dealmakers is that U.S. presidential elections have more of an effect on deal timing than deal outcomes. Deal volumes in the third quarter of presidential election years are typically depressed relative to non-election years, while relative deal volumes in the first quarter of the year following presidential elections spike by approximately the same amount that they were depressed prior to the election. This "dip and recovery" pattern suggests that some deals are delayed to allow parties to adjust deals for election outcomes—but that most ultimately go through in some form, regardless of the election outcome.

Figure 1: Percent change in number of announced M&A transactions (by U.S. acquirors, 1992 – 2022, excluding 2008).

Source: "Election Uncertainty Leaves M&A, Activism in Limbo", The Deal. Data source: CapIQ, Harris Williams. Data includes U.S. M&A transactions.

The parties' different approaches to antitrust and national security enforcement could impact M&A meaningfully in the coming years (for more, read our article "The next four years of antitrust and foreign investment policies: a look ahead at the 2024 U.S. election"). Many expect a second Trump administration would roll back Biden's executive orders and guidelines that allow novel approaches to antitrust enforcement, particularly against big tech multiplatform companies and private equity roll-up platforms (for more on the private equity environment, read "Secondaries in a challenging fundraising environment" and "Recent trends in U.S. private funds"). And given his Silicon Valley venture capital background, Trump's running mate J.D. Vance (as well as the parade of Silicon Valley billionaires supporting Trump at the Republican National Convention) has sparked curiosity about what a Trump presidency might mean for the technology sector, particularly in light of the enhanced scrutiny of antitrust, privacy and issues in the technology companies during Biden's presidency.

Relatedly, some commentators blame tighter merger regulation under Biden for a drop in the relative proportion of M&A-fueled activist campaigns versus operations-driven activist campaigns during the Biden years. These observers wonder whether a looser antitrust and CFIUS environment under a Trump administration could encourage activists to return to more traditional M&A-fueled activism.

2024 H1 M&A market overview

In the first half of 2024, the global M&A market showed signs of recovery from 2023's troughs, with the global value of M&A activity reaching US$1.0 trillion, which represents a 4% increase compared to the same period last year but remains substantially below a ten-year average of US$1.5 trillion at the end of Q2¹.

U.S. domestic dealmaking has rebounded more aggressively from 2023, though still lower than the banner years of 2021 and 2022. On an annualized basis, the U.S. domestic M&A market is projecting 9,842 deals for 2024 (versus 9,233 for 2023) and $1.34 trillion aggregate deal value (versus US$1.02 trillion for 2023). See Figure 2.