As President Donald Trump returned to the White House, Wall Street dealmakers expected a sudden recovery in American mergers and acquisitions. A business friendly administration, lower regulations, and quicker approvals were likely to release pent-up demand after years of scrutiny during the Biden administration.
Rather, 2025 provided a discontinuous deal landscape characterised by tariffs, high-cost of borrowing, and policy-related uncertainty. While a handful of blockbuster transactions dominated headlines, overall deal activity fell short of expectations, leaving bankers recalibrating what a “pro-business” climate really looks like.
Megadeals Mask a Softer Market
By the numbers, 2025 seems impressive. PitchBook reported that U.S. deal value surged to about $2.4 trillion by mid-December, up from $1.83 trillion during the same period last year. That growth was, in large part, fueled by growth in megadeals as opposed to widespread activity.
Among the year’s largest proposed transactions were Union Pacific’s $85 billion bid for Norfolk Southern, Netflix’s $72 billion agreement to acquire Warner Bros. Discovery’s streaming and studio assets, and the roughly $50 billion take-private deal involving Electronic Arts.
However, under those headline-grabbing transactions, a different story was being told by deal volume. The U.S. transactions dropped to approximately 13,900, less than the almost 15,940 transactions over the year 2024. Middle-market activity was particularly weak, according to analysts.
“When you look past the front-page deals, you see a market that’s less active than it appears,” said Benjamin Sibbett, co-head of the Americas M&A practice at Clifford Chance.
Early Optimism Gives Way to Uncertainty
At the beginning of the year, bankers in industries anticipated easier dealmaking after the years of antitrust aggressiveness. Several high-profile consumer mergers had been blocked under President Joe Biden, fueling hopes that Trump’s return would usher in a more permissive regulatory environment.
Trump’s sweeping tariff announcements — including the so-called “Liberation Day” reciprocal tariffs unveiled in April — injected fresh uncertainty into corporate planning. Executives struggled to assess costs, supply chains and pricing strategies, prompting many to delay strategic decisions.
“Macroeconomic uncertainty became the dominant theme,” said KPMG partner Lenny LaRocca. “Companies didn’t know where tariffs would land, and that uncertainty alone was enough to pause M&A discussions.”
The uncertainty was at the highest point during the first half of the year, especially in the areas that tend to be consumer sensitive and global trade.
Consumer and Retail Deals Slow
The slowdown affected retail and consumer-facing firms. Boston Consulting Group states that the value of consumer deals decreased by 17 percent in the first three quarters of 2025 compared to the same figure of the previous year.
According to PitchBook data, there have been 227 retail deals in the U.S. as of mid-December, compared to 296 a year before. Meanwhile, firms were facing increased investment requirements in artificial intelligence, and Federal Reserve interest rates were high throughout much of the year, making debt-financed transactions less appealing.
Media Deals Navigate a Political Maze
The same happened to the media industry: intense desire of consolidation, complicated by regulatory and political barriers.
The acquisition proposal by Nexstar Media Group to acquire Tegna, worth 6.2 billion was at a standstill as broadcasters sought new amendments to the old Federal Communications Commission ownership regulations.
FCC Chairman Brendan Carr has signaled a willingness to reform the rules, but regulators have taken little action so far, and Trump has voiced doubts about large broadcast mergers.
There was also a political factor in deal approvals. Several companies adjusted diversity, equity and inclusion policies amid pressure from the administration, moves that appeared to ease regulatory paths in some cases.
The long-delayed merger between Paramount and Skydance closed over the summer after nearly a year of regulatory uncertainty. The deal received approval shortly after Paramount settled a lawsuit with Trump related to a CBS “60 Minutes” interview, drawing scrutiny from critics.
Since then Paramount Skydance has sought an alternative high-value deal a hostile takeover bid of Warner Bros. Discovery, emphasizing the competitive and politically sensitive nature of the media landscape.
Momentum Builds Late in the Year
By the second half of 2025, deal activity began to stabilize as markets adjusted to the administration’s policy approach. Executives appeared more willing to treat uncertainty as a constant rather than an obstacle.
Biotech and pharmaceutical companies, after a turbulent start to the year, showed renewed deal interest. Large drugmakers stepped up acquisitions of smaller biotechs to fill looming revenue gaps from expiring patents.
Pfizer’s multibillion-dollar licensing deal with China-based 3SBio highlighted growing cross-border interest, even as broader U.S. policy remained protectionist in areas like technology and semiconductors.
Analysts also pointed to strong corporate balance sheets and renewed confidence in innovation — particularly in obesity treatments and oncology — as drivers of late-year activity.
Banking Sector Sees a Breakout
One of the clearest signs of renewed momentum came from the banking sector.
According to S&P Global Market Intelligence data cited by Stephens, announced bank deals surged 88% in the second half of the year, while total transaction value nearly quadrupled to $39 billion.
Regional banks led the charge, often under pressure from activist investors. Comerica’s $10.9 billion sale to Fifth Third marked the largest bank merger of the year and underscored the speed at which deals are now moving.
“The time it takes to get approvals has been cut dramatically,” said Stephens banker Frank Sorrentino. “Deals that wouldn’t have passed under the last administration are moving forward quickly.”
Looking Ahead to 2026
As 2025 draws to a close, Wall Street sees a cautiously optimistic outlook for dealmaking in the year ahead. While uncertainty around tariffs, rates and geopolitics remains, many executives believe the major unknowns are now priced into markets.
If interest rates continue to ease and policy signals stabilize, bankers expect M&A activity to broaden beyond megadeals and return to healthier levels across the middle market.
For now, 2025 stands as a reminder that political alignment alone does not guarantee dealmaking success — and that even on Wall Street, optimism must contend with reality.