Citigroup Head of Banking and Executive Vice Chair Vis Raghavan said a new regulatory regime has companies in the United States shopping for deals.
Much of this search is happening overseas, Raghavan told Bloomberg in an interview Tuesday (Jan. 21). It’s the latest example of post-election enthusiasm on Wall Street for a revival in dealmaking.
In addition to an expected rollback of regulations by the new President Donald Trump administration, Raghavan said a strong dollar and a growing gap in the multiples at which international companies are valued is leading U.S. companies to look overseas.
“You have gems of companies — sometimes we call them good houses in bad neighborhoods — dollar earners, but trapped in certain jurisdictions where there’s a valuation impairment,” he said in the interview. “U.S. companies are eyeing them, private equity is eyeing those jewels.”
Last year saw the beginnings of a revival in mergers and acquisition activity, as access to cheaper financing started to release pent-up demand for deals after two lean years, Bloomberg reported. The hope among dealmakers is that Trump’s return to office will help juice that recovery even further.
The value of mergers and acquisitions (M&A) was up 11% in 2024, in contrast to 2022 when dealmaking fell short of the $3 trillion mark for the first time in a decade. Megadeals — those worth more than $5 billion — ramped up 19% even as the total number of deals declined.
Raghavan’s comments came the same day that Mary Erdoes, head of asset and wealth management for J.P. Morgan, that U.S. banks are getting into “go mode” following Trump’s inauguration.
She said her bank hopes the new administration will roll back some of its predecessor’s regulatory restrictions.
“If you look at the last administration and the number of new, significant regulations, it was eight times the number of significant new regulations versus the prior Trump administration,” she said. “With that comes multiple millions of man hours of paperwork. Work … that clogs up the system and stops the economy from continuing to have that very healthy flywheel. So, we’re really looking forward to that.”