Board Focus: Dealmaking Amid Tariffs

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The directors suggested increasing the R&D budget, brought in a special “innovation consultant” to consider their options, and pushed the executive team to explore new markets. And still the board could see that the firm’s revenue growth just wasn’t coming. The next lever to consider? Mergers and acquisitions. 

While not the panacea for recent years of stagnant corporate growth—or for dealing with today's tariffs—mergers are getting another look from firms and their boards. To be sure, the number of announced US M&A deals declined by 4% in the first quarter of this year, compared to the same quarter in 2024. But the value of the deals rose a healthy 6% year-over-year. 

It's a mixed dealmaking picture that reflects a more cautious M&A environment—one that leaves boards all struggling with the same question: Where to find growth? “Organizations are being more cautious and taking a wait-and-see approach,” says Elise Schroeter, global head of organization and talent strategies for Korn Ferry’s Board & CEO Services practice.   

Indeed, amid the back-and-forth tariffs, executive orders, and fluctuating stock markets, many companies are in a holding pattern. Yet that wait-and-see attitude could be precisely what makes this a good time for M&A, experts say. While some firms may be trying just to survive the chaos, creative CEOs in advantageous positions could find paths to explore the market through joint ventures or partnerships. “JVs could give companies an opportunity to test the returns and the environment, and see what impact can be made,” Schroeter says.

Sherry Duda, a senior client partner who leads Korn Ferry’s M&A practice, says she’s seeing divestitures and carve-outs, along with joint ventures, in the works. “Some companies may see these options as a safer way to go about deals,” she says. “It lessens the risk for companies.” 

Some companies could find that it’s a great time to buy, particularly outside the US, says Jane Edison Stevenson, global vice chair of Korn Ferry’s Board & CEO Services practice. There may be less competition from buyers who are capital constrained. The trick, however, will be to move fast and buy when the market is down, because it could be back up in a week. “It’s a different mental process to evaluate deals in the current environment,” Stevenson says. 

Indeed, valuing a company when the market is volatile is complicated, as lower target prices can make acquisitions appear cheap, but don't reflect long-term value. At the same time, it’s difficult to tell if the current market fluctuation will be temporary, due to macro trends. “There are a lot of variables at play,” Stevenson says, “but that doesn’t stop transformational agendas from moving forward.”

Find out more about how boards and leaders are handling today’s volatility by exploring our leadership topics hub.

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