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Dealmakers see pickup in M&A activity in second half of

2025

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Potential buyers and sellers worried about market

volatility

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Dealmakers blame policy uncertainty for M&A slowdown

By Abigail Summerville, Milana Vinn and Svea Herbst-Bayliss

NEW ORLEANS, March 6 (Reuters) - Facing unexpected

market volatility and geopolitical uncertainties, normally

optimistic dealmakers are sounding a more cautious note for the

coming weeks and months but are confident the pace of mergers

and acquisitions will pick up later this year.

"Our clients are waiting and seeing to see how things work

out," said Paul Weiss partner Scott Barshay, one of Wall

Street's most prominent dealmakers.

"We are busy ... It's hard to see the year ending on a slow

note," he said, adding that large deal announcements should

start popping up within the next few months.

Top M&A lawyers, bankers, proxy advisors and proxy

solicitors as well as public relations executives gathered on

Thursday and Friday in New Orleans for the 37th annual Tulane

Corporate Law Institute conference to discuss trends in the

industry and highlight upcoming concerns.

More than 1,000 people flew to the Crescent City from

Amsterdam, Mumbai, New York, San Francisco, Toronto, Chicago,

Washington D.C. and Wilmington, Delaware to hear about trends,

new regulations and the mood some 60 days into the new Trump

administration.

Attendees described a current chill on dealmaking,

attributing it to a lack of predictability coming from

Washington.

M&A activity in the U.S. during the first two months of this

year was the slowest in more than two decades, with only 1,172

deals worth $226.8 billion through Friday, according to data

compiled by Dealogic. That was down by about a third from the

same time last year by both volume and size and the slowest open

by volume since 2003.

Jennifer Muller, managing director and co-head of investment

bank Houlihan Lokey's ( HLI ) board advisory and opinions practice, said

that a few months ago, consensus estimates pegged M&A deal

volume in 2025 at $3.5 trillion versus $3 trillion last year.

"Given the rocky start, that may be harder to achieve. And

in this case, when I say may, I actually mean will," Muller said

during a panel.

Potential sellers have become increasingly nervous,

especially as the VIX CBOE Volatility Index, known as

Wall Street's fear gauge, reached 24.41 on Thursday, which is

considered elevated.

Muller still sees deal opportunities in certain sectors like

technology, energy and financials.

Other speakers at the conference said the current situation,

where the main U.S. S&P stock index drifted into negative

territory for the year, feels more like a pause versus a severe

drop off in activity.

Lawyers said they remained busy in laying the groundwork for

mergers and said companies were still interested in hiving off

units that no longer fit and that there was plenty of money

available to finance dealmaking.

Private equity firms and demands from activist investors

are expected to provide a good dose of fuel for dealmaking at a

time more corporations are bracing for costly and noisy fights

with shareholders who are pushing for changes.

Private equity funds, which currently own around 12,000

companies, are facing mounting pressure to exit their portfolio

companies and return capital to investors.

However, progress is continually interrupted by a deluge of

news. On Tuesday, President Donald Trump's 25% tariffs on goods

from Canada and Mexico went into effect.

"You don't know where the curve ball is coming from," said

Leo Strine, of counsel at Wachtell, Lipton, Rosen and Katz and a

former chief justice of the Delaware Supreme Court.

A new dynamic, for example, is that political leaders are

now getting involved in deals. Earlier this year, Trump

announced that Nippon Steel, which had made a bid to buy U.S.

Steel but was blocked, would make an investment.

This also suggests that other global leaders may weigh in on

deals, something the people said could add to the amount of time

it will now take deals to get done.