2025 has upended expectations for M&A regulation. While some GPs anticipated a more laissez-faire environment and deregulatory tailwinds, the current framework reflects a far more nuanced reality.
Contrary to expectations, the FTC has continued to actively challenge domestic consolidation in technology, healthcare, and energy. Concurrently, foreign investment has come under sharper review. The Committee on Foreign Investment in the U.S. (CFIUS) is taking a harder line, viewing cross-border capital not only as a national security risk but also as an economic variable tied to supply chain resiliency, industrial competitiveness, and technological leadership.
For sponsors, this means certainty, structuring, and return modeling must account for where capital comes from and how regulators perceive its impact on U.S. economic strategy. Geography now matters more than ever.
From Antitrust to National Security: A Policy Realignment
Antitrust / Competition Enforcement: Still Active, But More Focused
The FTC remains firmly engaged in antitrust enforcement. While routine transactions are moving more efficiently, deals in strategic sectors including digital markets, healthcare delivery, and labor continue to face scrutiny. Several high-profile challenges this year show that the FTC is not operating with a lighter touch, but rather a more targeted one.
CFIUS / National Security Review: Rising in Economic Importance
Foreign investment reviews are proving more consequential in 2025. The key shift is not just volume, but posture. CFIUS is applying a stricter lens to transactions involving sensitive technology, data, or defense-adjacent assets. Where capital originates and whether it aligns with U.S. economic and industrial policy now determines whether a deal proceeds, stalls, or requires mitigation. Cross-border capital is being evaluated as both a national security and an economic strategy issue.
Sector Dynamics: Where Sponsors Must Be Alert
- Technology & Data: Dual scrutiny through antitrust for concentration and CFIUS for data security and AI.
- Defense & Dual-Use Technology: CFIUS is particularly active, and alignment with U.S. industrial and supply chain policy improves clearance prospects.
- Healthcare & Life Sciences: FTC enforcement remains robust, with consolidation involving private equity a consistent flashpoint.
- Energy & Infrastructure: Subsidy-driven opportunities exist, but foreign participation often triggers extended review timelines.
A Practical Playbook for Sponsors
1. Diligence
- Add a regulatory module to deal screens.
- Model clearance probabilities and potential review timelines early.
2. Structuring
- Build in long-stop provisions for regulatory review.
- Use minority stakes, carve-outs, or consortium structures to mitigate sensitivity.
3. Positioning & Messaging
- Frame transactions as aligned with U.S. competitiveness, jobs, and innovation.
- Engage regulators early to help shape the narrative.
4. Exit Planning
- Stress-test exits against potential tightening of reviews.
- Build flexibility into timing and deal structures.
Regulation as Strategic Leverage
The 2025 regulatory environment is not broadly permissive, as some had hoped. Instead, it is sharper, more targeted, and increasingly shaped by geopolitical and economic considerations. Antitrust scrutiny continues in strategic sectors, while foreign capital faces heightened national security review.
Geography matters more than ever. The edge will go to firms that anticipate enforcement priorities, structure flexibly around them, and align transactions with domestic economic objectives. In today’s environment, differentiated dealmaking comes not from avoiding regulation, but from navigating it strategically.
