As merger and acquisition (M&A) activities experience an upswing, a particular area of interest has emerged with national security implications. Legal professionals observe optimism stemming from the Trump administration’s efforts to expedite the review process for transactions with foreign involvement.
Under President Donald Trump’s America First Investment Policy, the Committee on Foreign Investment in the United States (CFIUS) has eased certain regulations that typically scrutinize or impose specific conditions on deals involving foreign entities. This has led to transactions previously hindered by extensive mitigation requirements moving forward more efficiently than in previous years.
According to Rick Sofield, co-head of Debevoise & Plimpton’s national security group, deals that once demanded intensive mitigation agreements are now proceeding without such burdensome stipulations. “Transactions in recent times seem to clear without mitigation,” Sofield noted.
Building on this positive trend, global transaction volumes of completed or pending M&A reached approximately $1.4 trillion in the first half of this year. This marks an 18.5% increase compared to the same period in 2024, as detailed in the Bloomberg league tables released recently.
- Latham & Watkins emerged as the leading M&A adviser in Big Law, with dealings amounting to around $269 billion.
- Kirkland & Ellis, along with Wachtell Lipton Rosen & Katz, followed closely behind in M&A advisory roles.
CFIUS, chaired by the Treasury Department, evaluates deals with foreign connections under the 1950 Defense Production Act. Despite recent regulatory adjustments, CFIUS remains a key entity in overseeing the security implications of these transactions.
The Trump administration has also seen an absence of mid-level political appointees, which practitioners believe can further facilitate M&A activities. With fewer individuals capable of influencing the review process, transactions might proceed more swiftly through the pipeline.
The recent engagement of Nippon Steel Corp. in US Steel Corp., facilitated by a security agreement, indicates how deals can be successfully negotiated and cleared under the administration. Additionally, Cerberus Systems Inc.’s resolution of outstanding CFIUS issues signifies that firms can foresee a clearer path toward their financial objectives, like public offerings.
While certain changes offer a promising landscape for increased M&A activity, legal experts like Michael Leiter of Skadden, Arps, Slate, Meagher & Flom, highlight the necessity to observe ongoing trends to conclusively determine the long-term impact of these administrative changes. “You require a larger volume of challenging cases to fully understand the extent of mitigation reduction,” Leiter said.