Although the U.S. M&A market has remained relatively strong by historical standards so far in 2019, activity has softened compared to the higher levels in 2017 and 2018, continuing a trend that began in the second half of last year. The pace of overall deal count in the U.S. has decreased from the past two years, with the U.S. having its slowest first quarter by deal count in five years, according to figures from Mergermarket. However, overall deal value in the U.S. remained high in the first quarter of 2019 at $414 billion, falling just below 2018’s first-quarter record high of $415 billion and representing over half of global deal volume. Seven “megadeals” (i.e., deals valued at $10 billion or more) have been announced in the U.S. in the first quarter, one more than in the first quarter of 2018.

Like much of the rest of the world, the U.S. continues to confront economic and political uncertainty, and dealmakers have taken different approaches in response. For instance, although some dealmakers have been restrained, others—including in the biopharmaceutical and financial services industries—have remained active. While the three largest U.S. deals of 2019 thus far have been between strategics, financial sponsors also have been active in the first half of this year.

Selected 2019 Midyear Trends

Regulatory Developments

The Foreign Investment Risk Review Modernization Act (FIRRMA), which in August 2018 expanded the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS), is already impacting U.S. M&A activity. Notably, interim regulations released by CFIUS in October 2018 have added to the chilling effect on Chinese investments in the U.S., particularly in the technology sector. At the same time, escalating trade tensions with China have led to concerns that Chinese authorities may take stricter stances on approving transactions involving U.S. firms, although this situation remains fluid.

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