There's one major reason merger activity has gotten crushed this year

Corporate deals are falling apart left and right, and a huge culprit appears to be the federal government.

The rate of merger and acquisition activity was halved in the first quarter of 2016 compared to the average over the previous seven quarters, according to strategist David Bianco at Deutsche Bank.

Both the number of deals and the value of deals completed fell off the table to start the year, and a big cause of that decline might have been the influence of lawmakers.

“Several big deals fell through upon the recent passing of new laws with more restrictions on inversion deals (PFZ-AGN) and also antitrust regulation (HAL-BHI),” said Bianco, citing regulatory restrictions on mergers intended to lower tax burdens and on the formation of overly large conglomerates.

“Total value of M&A deals in 1Q16 was $283 billion, a clear slowdown from the average quarterly deal value of $530 billion from Q214-Q415.”

Bianco mentioned a few of the big name merger and acquisition attempts that have run into government problems to start the year.

The $160 billion merger of pharmaceutical titans Allergan and Pfizer was scuttled due to changes in regulations from the Treasury Department regarding the moving of corporate headquarters from the US to overseas locales to avoid taxes, also known as inversions. President Obama has also spoken put against these deals, possibly contributing to the chill in dealmaking.

Oil services giants Halliburton and Baker Hughes had their $28 billion mega-deal squashed by the Department of Justice over antitrust concerns, and smaller deals such as the possible Canadian Pacific-Norfolk Southern takeover faced anti-competitive worries from lawmakers.

While Bianco noted that dealmaking has picked up some in April and May, the government’s increased anti-trust scrutiny and crackdown on tax avoidance have thrown a monkey wrench into a lot of firms’ well-laid plans.

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