What a New Administration Means for M&A

The arrival of a new administration often signals a wave of changes in business dynamics, and the Mergers and Acquisitions (M&A) market is no exception. As political leadership shifts, companies and investors are keenly observing how these transitions will affect deal-making, particularly in terms of economic policy, regulatory shifts, and talent acquisition. At Selby Jennings, we have explored the multifaceted impact of the new administration on M&A activity and what it means for talent management efforts.

Economic and regulatory environment

One of the most immediate impacts of the new administration has been the shift in economic and regulatory policies, highlighted by efforts to lower corporate taxes, reduce regulatory burdens, and encourage domestic investment, potentially signalling a fertile environment for M&A. According to Deloitte, business-friendly tax policies and regulatory streamlining are expected to significantly boost deal-making activity by improving corporate profitability and reducing operational friction.

Additionally, the administration’s push to onshore manufacturing and strengthen local supply chains has potential implications for acquisitions. Companies are more likely to target domestic firms that can help fortify operations against global supply chain disruptions, while also capitalising on emerging tax incentives. This focus on reshoring aligns with a broader national strategy of creating more resilient, self-sustaining industries.

Recent data supports this: a 2024 M&A survey by PwC revealed that dealmakers expect a significant uptick in activity due to tax cuts and deregulation. These reforms are driving greater confidence in M&A activity as companies position themselves for growth and consolidation.

Interest rates and financing

Interest rates continue to play a pivotal role in M&A decision-making, as they directly impact borrowing costs and capital availability. In a low-interest-rate environment, businesses are typically more inclined to pursue acquisitions due to more affordable financing options. However, economic conditions—such as inflationary pressures and geopolitical uncertainties—can introduce variability into the interest rate landscape. Central banks may adjust their monetary policies in response to these factors, which can lead to fluctuating borrowing costs. As a result, businesses may need to reassess their M&A strategies based on the prevailing rate environment and broader economic conditions.

While the administration's focus on economic growth through tax cuts and deregulation initially created expectations of a favorable environment, the evolving situation suggests that M&A activity could be impacted by these changing conditions. Companies will need to carefully assess financing options and the broader economic environment when considering acquisitions. 

Talent acquisition and retention in M&A

A frequently overlooked but critical factor in the success of M&A deals is talent acquisition and retention. Changes in immigration policy, labor laws, and education funding can significantly influence the talent pool, especially for specialised roles in the M&A space. For example, tighter immigration restrictions could result in a 24% reduction in H-1B visa approvals—up from 6% in FY2015—potentially limiting access to global talent.

This trend is directly relevant for M&A firms and corporate acquirers, as access to skilled professionals, particularly in the legal, financial, and regulatory sectors, becomes more competitive. To thrive in this environment, businesses will need to focus on talent development, enhance employer branding, and foster workplace diversity. By implementing targeted recruitment strategies and investing in employee retention, companies can stay competitive, particularly in industries dependent on high-level strategic expertise.

There has been a noticeable increase in recruitment efforts, as businesses and M&A firms scramble to secure top talent before the competition intensifies. Proactive talent management will be a significant differentiator in driving M&A success under the new administration.

Leveraging technology in M&A

The role of technology in M&A cannot be overstated. The new administration’s policies supporting innovation and research and development (R&D) could accelerate M&A in the tech sector. Emerging technologies, including artificial intelligence (AI), machine learning, and advanced analytics, are now essential tools for identifying and evaluating potential acquisition targets.

Executives are increasing their use of AI in M&A processes, primarily for streamlining due diligence and enhancing decision-making. AI tools can analyse vast amounts of financial data, identify market trends, and assess operational efficiencies, providing businesses with actionable insights to make informed, strategic acquisition choices.

Moreover, digital tools are transforming the integration process. Software platforms for project management, collaboration, and performance tracking are helping streamline post-merger integration (PMI), reducing the time and cost typically associated with these efforts. This technological advancement ensures that companies can capture the full value of acquisitions, enhancing post-deal outcomes.

Post-merger integration

Post-merger integration (PMI) is a critical success factor in realising the full value of an acquisition. The new administration’s labor and employment policies could affect workforce restructuring, compensation alignment, and integration of organisational cultures. To ensure successful post-merger integration, businesses must prioritise effective communication, change management, and a tailored integration strategy. In addition, leveraging technology for integration planning and monitoring can help businesses navigate challenges such as workforce transitions and system consolidation.

Low interest rates are expected to drive increased deal-making activity, while evolving regulatory frameworks will continue to shape the strategic priorities of businesses. However, to maximise the success of M&A deals, companies must also focus on talent acquisition and retention, integrate technology into the M&A process, and prioritise ESG considerations. By adapting to these changes and staying ahead of emerging trends, businesses can position themselves for success in this new era of M&A.

At Selby Jennings, we specialise in connecting organizations with the best M&A talent. Whether you're looking for senior executives, analysts, or specialists, our team has the experience and networks to find the right professionals who can drive your M&A initiatives forward.

By partnering with us, you gain access to a tailored recruitment strategy, deep industry expertise, and an extensive network of candidates, ensuring you stay ahead of your competitors. Request a call back today to learn more about our business solutions.