The end of the German “debt brake” is strengthening the euro, while uncertainty over US trade policies is weakening the dollar.

As a result of both trends, which push in the same general direction, inbound acquisitions from Europe into the US are likely to become even more attractive and cost-effective than before, according to an M&A advisor specialising in cross-border deals involving players from Europe and the Middle East.

There are clearly risks for European dealmakers pondering what US President Donald Trump will do next, but the underlying case for cross-Atlantic transactions remains strong, despite the likelihood of sudden pivots in trade policy.

EUR 1.00 is worth USD 1.08 at the time of going to press. This compares to USD 1.03 on 1 January. The euro traded above USD 1.20 at times during 2021, but fell sharply after the Russian invasion of Ukraine in February 2022. It traded below parity for a time in 2022.

Even without the most recent moves in the forex markets, European dealmaking in the US was already trending higher, according to Mergermarket data. Aggregate deal value boomed 46% in 2024 compared to 2023, while the deal count also increased 9%.

At the same time, the US slice of European outbound deals increased to 72% in 2024 compared to an average of 63% for 2021-2023.

The year to date (YTD) is also off to a strong start, with 104 outbound European deals in the US worth EUR 16.3bn crossing the line so far. One noteworthy deal from March involved Celnor Group of the UK, which bought New-England based John Turner Consulting, a firm with staff of 150. The UK pound (GBP) is also up against the dollar.

The largest European acquisition in the US in 2024 involved the acquisition of Berry Global Group by Amcor in an all-stock deal. The merger is expected to close halfway through this year.

Denmark took the top spot for US deals in 2024, followed by Switzerland and Germany. Healthcare, chemicals, and tech were the top sectors by volume.

Pettis risks

If the dollar remains weak against the euro, the pound and other European currencies, it could have a wide impact on deals, the advisor said.

However, one scenario to consider involves the possibility that the heterodox views of finance professor Michael Pettis might grain traction in Trump’s circles. Pettis believes that the US should tax capital inflows to prevent the dollar strengthening too much. The idea is to incentivise domestic investment in industry while disincentivising the financialisation of the economy.

Although Pettis’ views are outside the mainstream, his approach has attracted attention from some Trump supporters. For example, Missouri Senator Josh Hawley – a Trump loyalist – co-sponsored the Competitive Dollar for Jobs and Prosperity Act in 2019.

Westward-bound flows to continue

Westward-bound cross-Atlantic deals look set to continue this year, with Mergermarket’s proprietary intelligence tracking a number of opportunities.

For example, SCHOTT, a German manufacturer of glass, is already exploring potential targets in the US, as well as China and Southeast Asia.

Meanwhile, Fiskars Group of Finland sees the US and Chinese markets as its most important geographical growth areas. It will take a more active stance once it completes a split of its business into two.

Finally, NORMA Group of Germany could consider deals in the US once it has divested its water business.

If the dollar remains cheap, and Trump resists the temptation to tax capital flows, we can expect the trend to continue throughout 2025.