M&A in the Trump 2.0 metaverse

March 2026 | SPOTLIGHT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

March 2026 Issue

For M&A practitioners, pursuing successful transactions has always been a combination of art and science. For the first 15 years of the 21st century, it appeared that science was the key driver of structuring transactions as most (but not all) transactions were pursued in a rules-oriented framework where politics generally took a backseat.

That fundamentally changed in 2016 when Donald Trump was elected the 45th president of the United States. Change was not limited to the US but was felt around the world as transactions not only needed to meet legal requirements but pass critical political scrutiny as well.

The transition to Joseph Biden’s presidency, combined with the impact of the pandemic, swung the pendulum in the other direction from a political perspective, with antitrust enforcement being the major (but not the only) hurdle transactions had to overcome to be completed successfully.

Importantly, this impact was largely for big transactions with smaller transactions (almost by definition) largely avoiding antitrust scrutiny, many led by private equity (PE). Following the US’ lead, many other jurisdictions similarly focused on antitrust issues, making it much more difficult around the world for larger strategic transactions to get across the finish line.

Then, in 2025, Donald Trump returned to the White House as the 47th president. Following his return to office, many prognosticators predicted that 2025 would see the return of M&A. There was $4.5 trillion worth of global deals in 2025 (the second best year ever), driven primarily by M&A involving large public companies, with a record 67 transactions involving $10bn-plus companies.

Importantly, M&A involving under-$100m companies dropped by approximately 8 percent, in part due to tariff and supply chain uncertainties having a significantly greater impact on smaller-cap companies. The rebound in global M&A has been driven by falling interest rates, equity markets at all-time highs, more regulatory clarity and robust capital markets. But with Trump’s return to office, M&A has again become quite political.

In a year of significant regulatory, geopolitical, technological and macroeconomic turbulence, companies have had to manage through an environment of significant uncertainty. Unpredictability caused by frequent policy shifts and evolving expectations and demands from governmental and market actors added complexity to the array of demands that public companies must be prepared to address.

Turbulent times in the Middle East, the ongoing war in Ukraine, the US military operation in Venezuela to arrest their president, an ever-changing mixture of tariffs and the growth in crypto, all need to be factored in when a company contemplates pursuing an acquisition.

On the regulatory front, antitrust enforcement in the M&A space appears to be easing. There has been a tectonic shift toward structural and behavioural remedies rather than outright efforts to stop transactions. These changes have created a more permissive environment for mergers as the new leadership at the Federal Trade Commission and the Department of Justice have signalled.

There is some concern by potential acquirers that if the midterm elections result in Democratic control of either (or both) of the Senate or House of Representatives, it may create a more difficult environment to complete transactions that raise potential antitrust or other regulatory issues. One potential response to the ease in the federal antitrust enforcement is that Democratic state attorneys general may become more active and oppositional in challenging transactions where they believe there may be harms to consumers in their particular state. Potential acquirers need to be prepared for this possibility.

There is also likely to be a continued uptick in PE transactions and investments by sovereign wealth funds in light of the easing of interest rates and a significant uptick in the availability of private lending. PE and sovereign wealth funds are expected to continue to target crypto and technology investments in 2026. We have seen a number of transactions in the energy space over the last few years and there is some expectation that energy-focused merger activity may decline in light of the recent significant consolidation.

M&A practitioners have made a number of changes to try to adjust to the new regime. With the increased emphasis on politics, firms contemplating transactions have increasingly turned to political operatives before announcing a transaction. In some industries (like defence), merging parties often retained political operatives after the transaction was announced in order to try to smooth the path for any required regulatory approvals.

In some cases, potential merger parties have approached the US government before the transaction was announced. For foreign acquirers contemplating cross-border acquisitions of US companies, representatives of the merger parties sometimes have held preliminary discussions with the Committee on Foreign Investment in the United States in an effort to determine if there was a realistic chance of having the potential transaction cleared.

In the current environment, in addition to carefully analysing myriad regulatory requirements both inside and outside the US with the proliferation of foreign direct investment restrictions, acquirers are tending to engage in significantly greater due diligence prior to entering into a definitive acquisition agreement than was previously the case. The differential impact of the US tariff scheme has wreaked havoc on many supply chains.

Acquirers expanding into new countries must determine if the regulatory or political environment will impact their current business model. For example, a US company expanding into Europe may face disclosure obligations that would require significantly greater reporting requirements for its global business operations than it would otherwise face in the US.

Geopolitical concerns are also driving strategic M&A as companies are forced to adjust supply chains to increase resilience, reduce dependency risks and relocate operations into the US. These trends are leading to transactions focused on regional or local operations as well as enhanced logistics and infrastructure as companies seek to protect their supply chains, lower transportation costs and avoid tariffs.

In various instances during 2025, the Trump administration has taken ownership stakes in public companies it deems to be integral to national security, and that trend is likely to continue and, perhaps, accelerate in 2026. Many of these investments – such as the US government’s $8.9bn investment in Intel and other investments in Lithium Americas, MP Materials, ReElement Technologies, Trilogy Metals and Vulcan Elements – primarily provide the US government with economic rights, rather than governance rights or other direct means to influence a company’s decision making.

However, in some circumstances, such as the US government’s ‘golden share’ in US Steel (which gives the government veto rights over a range of corporate decisions) or its agreement with Nvidia and AMD (which gives it a portion of revenues from chip sales to China in exchange for export licences to China for chips that were previously subject to restrictions) – the US government would appear to have the opportunity for more direct involvement in corporate decision making or the strategic trajectory of businesses.

This move by the US government is likely to be copied by other countries seeking to protect sensitive sectors of their economy. This ‘protectionism’ makes it more difficult to pursue acquisitions in certain industries around the world and may require giving the government a seat at the table in deal negotiations in order to ensure the successful completion of a transaction.

In an environment in which a wide range of industries, such as steel, minerals, nuclear energy and semiconductors, among others, could be considered integral to national security, an increasing number of companies may potentially be spotlighted for a potential governmental investment, especially in the context of a change of control transaction. In addition, companies in certain industries may be required to change return of capital policies in order to maintain their government contracts, as was recently indicated by the US government with respect to the defence industry.

M&A will continue to accelerate in 2026 as acquirers seek to take advantage of an improved regulatory environment, lower interest rates and improved equity markets. However, they need to be prepared to deal with political headwinds and protectionism, not just in the US but around the world. Advanced planning is more important than ever.

David A. Katz is a partner at Wachtell, Lipton, Rosen & Katz. He can be contacted on +1 (212) 403 1309 or by email: dakatz@wlrk.com.

David A. Katz

Wachtell, Lipton, Rosen & Katz