“Policies and regulations play an increasing role in business”

After years of uncertainty due to the pandemic, rising interest rates and geopolitical uncertainty, there is now hope that the mergers and acquisitions market will pick up, right?

New Republic caught up with Anders Fast of Baker McKenzie, one of the world's leading legal transaction advisors. We took the opportunity to ask three quick questions.

As public affairs professionals, we see politics and regulation playing an increasing role in business in many industries. Do you share this view?

I completely agree that politics and regulation are becoming more important to business - we live with it every day as we help our clients navigate an increasingly complex world. We see a growing understanding among international companies that we hope will spill over to more local businesses. If not before, the sanctions against Russia following the invasion of Ukraine were a wake-up call to many that politics very much affects business.

Trump's first term as president has created a new political uncertainty in the world. Do you see any risk of this having a negative impact on the Swedish investment climate?

When Trump won the election, most observers thought that the investment climate would be boosted. But instead, in January, there was a 30% drop in M&A (mergers and acquisitions) activity compared to the same period last year. An important explanation is probably the furious pace at which Trump has taken office and the uncertainty it brings.

However, we believe that this is a “notch in the curve”, albeit quite substantial, and that the investment climate will improve in the near future.

The Swedish investment climate is closely linked to the global one, so we expect the effects to be similar here.

What do you see as the most important conditions for the number of transactions to increase in Sweden in 2025?

There are a number of macroeconomic and political factors that affect the investment climate, including inflation, interest rates and geopolitical conflicts.

With a little ice in the stomach, Swedish companies and investors should be able to expect a better investment climate in the near future and with it an increased transaction volume. For example, we see that the IPO window is about to open in Sweden and expect an increased number of listings during the year. We also believe that the number of acquisitions will increase, driven by strategic investments in AI, cybersecurity and infrastructure, among other things. We also know that several private equity firms are sitting on mature portfolio companies that are ready to change owners.

Anders Fast, partner at Baker McKenzie was interviewed by Sebastian de Toro, New Republic. Anders Fast is also a member of the advisory board of New Republic's Political Due Diligence service, which is aimed at investors and capital market participants.