Goldman Sachs is optimistic about the future of the M&A market

The renowned financial corporation Goldman Sachs is optimistic about the future of the M&A market. This confidence, according to the company's president, John Waldron, stems particularly from ongoing consolidations in various industries and an expected acceleration in private equity-backed deals. Waldron shared his assessments at a Financial Times conference in New York. Waldron emphasized that it is evident more companies and their boards are acting more boldly, as illustrated by the example from the railroad industry. In particular, the billion-dollar acquisition offer from Union Pacific for Norfolk Southern, intended to create the first coast-to-coast U.S. freight operator, highlights the trend. With a volume of $2.6 trillion in the first seven months of the year, M&A transactions globally reached the highest level since the pandemic era in 2021. Goldman Sachs senses increasing momentum in its transaction pipeline for deals backed by private equity firms. Waldron noted that this trend is gaining traction, aided by the recent interest rate cuts by the U.S. Federal Reserve. These reduce capital costs, further boosting business transactions. Although economic fundamentals for the U.S. are generally positive, Waldron acknowledged that geopolitical tensions and trade conflicts pose global challenges. He praised the resilience of the U.S. economy but expressed concern over the long-term sustainability of the U.S. financial situation, calling for better control of government spending. An August budget outlook indicates an increased U.S. deficit of nearly one trillion dollars over the next ten years due to new tax and spending rules and tariffs. Additionally, Waldron expressed concerns about potential limitations in global recruitment of skilled workers, especially in light of a possible high fee surcharge for H-1B visas by the Trump administration, which could significantly impact financial firms.