Navigating M&A Amidst Trump's Tariffs
Nixon Peabody LLP
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With the Trump administration’s tariff war now in full swing, the M&A market is beginning to see impacts.? Recent Bloomberg data for the first two months of 2025 show that global M&A volume dropped to $434.2 billion, down 21% relative to the same period in 2024, and its lowest point for the same period in at least five years.? Companies are scrambling to adjust to the new, rapidly shifting, and unpredictable environment and should expect more of the same in the near term, including:
? Increased uncertainty: Expect sudden tariff changes and potential retaliatory measures to cause dealmakers to delay or cancel transactions due to unpredictable market conditions.
? Sector-specific disruption: Industries like retail, automotive, and technology will be particularly affected by higher costs and squeezed margins, complicating valuations and deal flow.
? Shift in strategic focus: Companies are expected to prioritize addressing operational challenges over growth strategies, like acquisitions, which will reduce overall deal activity.
? Cross-border challenges: Expect tariffs on imports from Canada, Mexico, and China to deter cross-border deals and cause business to shift focus to reassessing global supply chains.
Nixon Peabody is monitoring all federal developments and providing insights to help our clients navigate these transitions through our New Administration Hub.
Our weekly newsletter is published to share updates and insights from part of our team of Private Equity and M&A legal talent. This edition is curated by Greg O'Shaughnessy .
Insights
M&A professionals must be prepared to adapt to navigate this changing global landscape. Technology is being seen by dealmakers as an essential tool to increase the efficiency and speed of due diligence, as well as regulatory and cybersecurity compliance. AI, in particular, is poised to transform M&A by streamlining existing due diligence processes and bringing significant cost and time efficiencies. ?
A weakening economy could pressure private equity and venture capital firms to sell assets they’ve been holding onto, as declining macro conditions provide a justification for lower valuations and easier loss absorption. While this may make future fundraising more difficult, it could also serve as a necessary reset for dealmakers who overpaid in previous years, ultimately helping to clear the backlog of unsold assets.
PE dealmaking in the food & beverage consumer-packaged goods sector has held relatively steady YoY since 2022, according to Pitchbook’s latest Emerging Tech Research. This demonstrates the sector’s resilience and overall balanced deal landscape despite a downturn in deal count in Q4 2024. Exit activity signaled investor confidence, with 161 exits across the food & beverage market in 2024. While outside pressure—including heightened inflation and US tariffs on foreign goods—could slow exit activity, the sector has generally been viewed as recession resistant. Particularly resilient areas such as essential food items, snacks, and private-label goods are most likely to stay on track for a favorable exit outlook.
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