Morgan Stanley Predicts Surge in M&A and IPOs Amid Pro-Growth Policies

At the Reuters NEXT conference in New York on December 3, 2025, Mo Assomull, co-head of investment banking at Morgan Stanley, projected a significant increase in mergers and acquisitions (M&A) and initial public offerings (IPOs) for the upcoming year. He attributed this optimistic outlook to a robust economic environment and the Trump administration's pro-growth policies.

Assomull highlighted that the M&A pipeline is particularly strong across sectors such as technology, healthcare, industrials, and financials. He emphasized that the administration's deregulatory stance and tax reforms are fostering a conducive atmosphere for corporate consolidation, especially within the financial sector, where banks are seeking to scale operations in a more lenient regulatory climate.

"We do expect to have more banks-related M&A over the next few years, for many reasons," Assomull stated, citing a friendlier regulatory environment and the necessity for lenders to increase their scale.

Regarding artificial intelligence, he noted that investors and lenders have become more "discerning" about financing companies in the space, reflecting a maturation of the AI market.

The current economic environment is characterized by policies aimed at stimulating growth, including deregulation and tax reforms. These measures have created a conducive atmosphere for corporate activities such as mergers, acquisitions, and public offerings. The administration's pro-growth stance is expected to spur consolidation in the financial sector, supported by a more lenient regulatory climate and banks' need to increase their scale.

The anticipated increase in M&A activity suggests a trend toward larger, more resilient financial institutions capable of navigating a dynamic economic landscape. The shift toward more selective financing in the AI sector indicates a focus on sustainable business models and clear paths to profitability, potentially leading to a more stable and mature market.

Mo Assomull's insights at the Reuters NEXT conference underscore a bullish outlook for M&A and IPO activities, driven by favorable economic policies and sector-specific dynamics. As companies position themselves to capitalize on these trends, the financial landscape is poised for significant transformation in the coming year.