USA Law and Practice Contributed by: Vijay Sekhon, Brien Wassner, John Godfrey and Justin Macke, Sidley Austin LLP
sectors. In April 2025, US M&A reacted sharply to President Trump’s broad tariff announcements, with values dropping more than 50% from March 2025 as policy uncertainty spiked. By mid-2025, M&A activ - ity had not rebounded, with deal volume and value flat year-over-year and about 30% of private equity firms pausing or re-evaluating deals amid tariff-driven uncertainty. As of September 2025, the market contin - ues to remain cautious, but overall deal value is rising, driven by large transactions, while smaller deal activ - ity remains fragile. Sponsors are increasingly pricing geopolitical and policy risks into process design, deal timing and diligence scope, and hesitant to transact due to these risks. As tariffs have expanded, President Trump has been reaching trade agreements, reflect - ing a simultaneous push for negotiated compromises amid the protectionist stance and providing greater clarity for cross-border transactions that could sup - port an uptick in M&A activity. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions Legal and regulatory developments in the US over the past 12 to 18 months have had a measurable impact on private equity sponsors, both at the fund level and in transaction execution. While certain developments have added structural or compliance complexity, oth - ers have clarified long-standing market practices, par - ticularly around governance and disclosure. Antitrust Enforcement The Federal Trade Commission (FTC) and the Depart - ment of Justice (DOJ) have adopted a more asser - tive enforcement posture towards private equity deal activity. Particular focus has been placed on roll-up strategies, interlocking board seats and serial acqui - sitions, especially in healthcare, technology and con - sumer markets. The agencies have signalled a willing - ness to litigate under a “serial monopolist” theory and to challenge cumulative effects of multiple acquisi - tions within a sector. Enforcement of Section 8 of the Clayton Act, which prohibits the same individual from serving as a direc - tor or officer of competing companies under certain
circumstances, has also ramped up. Sponsors are more proactively reviewing cross-portfolio board roles and common ownership structures, particularly where commercial overlap exists. Revised merger guide - lines and filing requirements further emphasise risks for repeat acquirers, prompting sponsors to conduct earlier antitrust diligence, prepare more robust anti - trust filings as required by new rules, and build in clear covenant structures and mitigation strategies. President Trump has indicated that he intends to focus antitrust scrutiny on large technology transactions and the recent US Department of Justice (DOJ) legal action challenging the Juniper Networks acquisition by Hewlett Packard is a high-profile example among many others that have cautioned private equity inves - tors in technology and other companies. The DOJ cleared the transaction subject to certain divestitures and licensing commitments aimed at preserving com - petition in the enterprise networking space. The DOJ’s resolution underscores the agency’s current emphasis on large technology transactions and structural relief paired with targeted behavioural remedies. For deal makers, this case highlights the increasing importance of early regulatory engagement, particularly in trans - actions involving adjacent technologies or converging markets. Foreign Investment and the Committee on Foreign Investment in the United States (CFIUS) CFIUS review activity has increased materially, includ - ing in deals where foreign investors are indirect or passive. Transactions involving critical infrastructure, defence technologies, sensitive personal data and dual-use assets are higher risk to trigger CFIUS scru - tiny. Even when a fund is US-based, the presence of foreign LPs or co-investors with visibility into the transaction may result in CFIUS review. As a result, sponsors are limiting governance rights for foreign LPs, building CFIUS-related undertakings into deal documentation, and in some cases agreeing to mitigation measures with CFIUS to get deals done. Separately, proposed outbound investment screen - ing rules are under discussion. While not yet finalised, they are being watched closely, particularly for trans - actions involving semiconductor, quantum computing and AI investments abroad.
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