Recently effectiveThe One Big Beautiful Billis expected to create a more attractive environment for U.S. M&A transactions at the tax policy level.

As a core component of President Donald Trump's domestic agenda, this new law extends multiple provisions of the 2017 Tax Cuts and Jobs Act. Analysts note that it provides greater certainty for dealmaking amid a risky economic and policy environment.

Among a wide range of tax adjustments, the bill permanently restores 100% bonus depreciation for qualified assets acquired after January 19, 2025, eliminating the previously scheduled phase-out. It also restores a broader definition of "adjusted taxable income" for determining the limit on business interest expense deductions.

Tax tools return, deal momentum supported

"President Trump's One Big Beautiful Bill re-equips U.S. companies with the tax tools that drove the post-2017 deal boom—100% bonus depreciation for certain assets, relaxed interest deductibility, and crucially, no new carried interest restrictions," said Kevin Desai, leader of PwC's U.S. deals platform, in an email. "This means companies will have more tax shields, greater debt capacity, and a relative valuation uplift for asset-heavy U.S. firms. The question is whether the bill's long-term debt burden will weigh on valuations once these sweeteners expire."

Despite high market expectations at the start of Trump's second term, U.S. M&A activity saw minimal growth in the first half of the year, PwC noted in a recent report. Data from the Big Four firm shows that total U.S. M&A deals from January to the end of May stood at 4,535, roughly flat compared with 4,515 in the same period last year.

The report, released before Congress passed Trump's massive bill, concluded that an M&A recovery would require more policy clarity and stability.

Desai believes that while the legislation could positively impact deal momentum, stability concerns remain.

"We are still in the midst of tariff negotiations, geopolitical conflicts persist, and the stock market is reacting to the ups and downs of the Trump administration," he said. "We know there are companies eager to close deals, and we believe those that succeed in this environment will be the ones that embrace uncertainty and begin positioning for the right moment."

Industry executives: Deals may be larger in size, fewer in number

Despite ongoing global trade headwinds, the U.S. M&A market is showing "remarkable resilience," said Mitch Berlin, Americas vice chair at EY and EY-Parthenon, and Trump's massive bill will only help the situation.

"We expect M&A to enter an era characterized by fewer but significantly larger deals, benefiting from a clear tax environment for 2026 and beyond," he said in an email. "This clarity, along with the administration's agenda, is expected to spur near-term activity, particularly in energy, financial services, and manufacturing."

Trump signed the One Big Beautiful Bill into law on July 4, after Republican leaders in the House and Senate rushed the massive legislation to his desk in the days before the holiday.

According to an analysis by Holland & Knight, the bill is structured as a budget reconciliation package to bypass traditional filibuster rules, consolidating policy priorities from 10 Senate committees into a singlecomprehensive legislative framework。

Beyond tax reform and incentives, the bill also covers policy adjustments across broad areas including healthcare, energy, agriculture, and defense, the report said.

"The 870-page provisions of the One Big Beautiful Bill will reshape federal policy across nearly every major sector of the U.S. economy through significant policy shifts, fund reallocations, and regulatory changes," the report noted.

Cross-border deals may be dampened, leveraged buyouts may benefit

Mark Williams, chief revenue officer at M&A software provider Datasite, believes that multiple tax and regulatory provisions in the bill could significantly impact M&A, prioritizing domestic corporate growth while offsetting revenue losses from tax cuts.

"For example, the bill introduces higher punitive tax rates on foreign investors from certain countries, adding incremental rates of 5% to 20% on top of existing U.S. taxes, which could dampen cross-border deals," Williams said in an email. "On the other hand, the bill may raise the cap on business interest expense deductions, encouraging leveraged buyouts by making debt financing more attractive."

He added that the bill also aims to create a more favorable environment for strategic M&A through deregulation, particularly in sectors such as energy, finance, and industrials, "where regulatory complexity and compliance costs have historically been significant barriers to deals."