In 2024, the total value of mergers and acquisitions was approximately $1.7 trillion US dollars. It is an undeniable fact that mergers and acquisitions bring in economic benefits.

As such, whenever there is a change of administration, interested parties are on the lookout to see how mergers and acquisitions will be impacted by the new administration. Therefore, the question is whether mergers and acquisitions will be affected under the new Trump administration.

Historical Context

During Trump’s first term (2017–2021), his approach to mergers and acquisitions (M&A) shifted from pro-business and lightly regulated to stricter enforcement, with 2020 seeing more merger challenges than any year under the Obama administration. Trump’s interventions often seem to have reflected personal and political motives, such as opposing the AT&T–Time Warner merger, which was linked to CNN. Meanwhile, he supported Disney’s purchase of 21st Century Fox, owned by ally Rupert Murdoch.

After his 2024 reelection, many expected renewed deregulation and the repeal of Biden’s 2023 Merger Guidelines. Yet, nearly a year into his second term, those guidelines remain, and M&A activity has seen little growth, as evidenced by the 4,535 deals recorded between January and May 2025, similar to the previous year. Analysts attribute the slowdown to economic and policy instability, particularly shifting tariffs. However, the passage of the One Big Beautiful Bill Act (OBBBA) is expected to revive the M&A market.

Changes During the Current Administration

The OBBBA is expected to help the M&A market, especially in the energy, financial and industrial sectors. Furthermore, the OBBA reinstates a “100% bonus depreciation for certain assets, generous interest deductibility and, crucially, no new carried-interest curb. This should mean there are more tax shields, more debt capacity, and a relative valuation boost for asset-heavy U.S. companies.”

Advantages Under the One Big Beautiful Bill Act

The OBBBA includes a 100% bonus depreciation, which essentially means that if a buyer acquires a business with many fixed-assets, they may deduct much of the cost faster. This would improve the after-tax cash flow for the buyer.

Furthermore, the OBBBA now includes an enhanced business interest deduction of 30% of EBITDA. Previously, the business interest deduction was capped at 30% of EBIT. With the inclusion of depreciation and amortization, taxpayers will now be able to deduct more interest. Also, this would mean that there is a greater tax benefit from using debt in an acquisition.

Finally, the OBBBA also included changes to the Qualified Small Business Stock (QSBS) regulated under Section 1202 of the Internal Revenue Code. C Corporations with less than $50 million of gross assets have historically qualified for this benefit. Under the OBBBA, the gross asset cap has been increased to $75 million, making more businesses eligible. Previously, taxpayers could exclude $10 million in gains, now that number has increased to $15 million.

Risks

The OBBBA notably addressed the international corporate tax regime, specifically the Base Erosion and Anti-Abuse Tax (BEAT). The countries that are subject to BEAT will see an increase of 0.5%, now paying 10.5% instead of 10%. Past drafts of the OBBBA, included the BEAT at 12% in the now discarded Section 899.

While the initial drafts of the OBBBA, specifically Section 899, included more tax increases for international corporations, this reflects an ongoing sentiment of promoting domestic growth at the sake of international corporations wishing to invest.

Practical Guidance

Any company considering a merger or acquisition of an American company must be aware of legislative changes that may occur within the Trump administration.

Anyone considering a merger must know that the provisions of the OBBBA favor acquisitions of business with fixed-assets and that the acquisitions be financed via debt. Opting for acquisitions in this way and those in Trump’s preferred sectors, are the best way to take advantage of the current administration’s stance on mergers and acquisitions.

Foreign investors and buyers, however, must be mindful of OBBA’s intent and potential future legislative changes negatively affecting their cross border transaction. While the original draft of the OBBBA only included, but did not pass, a proposed revenge tax on certain foreign persons who would be determined by the U.S. Treasury, it is important to remember that at its core, OBBBA is meant to favor domestic growth. As such, it is likely that any new laws will also follow suit which may negatively impact cross border transactions.