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As dealmaking increases, activist investors will push for change.

In the months to come, activist shareholders will be more determined to press for corporate change. They'll also feel more confident to launch new campaigns now that the pace of deals is picking up.

Investors, bankers and lawyers predict a rise in corporate leadership disputes, operational improvements, and spin-offs during the second half 2025. They said that many global corporations would prepare for time-consuming and costly battles. However, some activist investors might be willing to compromise.

Alfredo Porretti is global co-head Shareholder Engagement and M&A Capital Markets for JPMorgan Chase. He said that the activity in the second half of the year would be more significant. "Activists have become more cautious, but they are still not taking action."

After an unusually quiet quarter in which only 59 campaigns were launched, the expected rebound of global company campaigns will come after a second quarter that was unusually quiet. This included campaigns from Hewlett Packard Enterprise, a U.S. IT company, and Kenvue Consumer Healthcare, whose products include Band-Aids, Tylenol, and Band-Aids.

The pace of investor campaigns to increase the price of shares slowed down by 16% between April and June compared to the first quarter. Barclays data shows that they were down by 32% compared to a year earlier.

Investors reported that many activists were on the sidelines during the second quarter due to concerns about the impact of U.S. president Donald Trump's tax and tariff policies.

Pam Codo-Lotti is the chief operating officer for Activism and Shareholder Advisory, Goldman Sachs. She said that "Activists reevaluated their public campaigns due to equity market volatility and macro-uncertainty in the second quarter."

People familiar with the work of established corporate agitators like Elliott Investment Management and Jana Partners, as well as newcomers that have never publicly pushed companies to perform better are looking ahead to new ideas.

Starboard Value, an activist group, bought a stake in Tripadvisor in the first few days of the second quarter with the intention to engage the management.

Activists target companies in the fall and winter, well before the annual meetings of the following year. They often start off with private discussions before making their demands public.

The companies are prepared for the anticipated onslaught.

Two directors of large American companies who were not allowed to speak publicly about the preparations said that board members with a negative memory of previous activist pressure are pressing management to hire advisors to assess vulnerabilities now and to take pre-emptive actions.

They said that long-serving directors could be replaced, or chief executives who are not keeping up with their peers may be fired.

In times of economic uncertainty and volatility, Ingo Speich said, "Shareholder activism is more likely to be due to weak points in companies." Ingo Speich is the head of sustainability at German asset manager Deka Investment. Poor governance is the main source of shareholder activism. Companies in transition are more vulnerable, and this opens the door for more shareholder activism.

In the first half 2025, 43% of activist campaigns have included a request for board changes. Mantle Ridge, an activist investor, successfully pushed board changes at Air Products and Chemicals and Elliott at Phillips 66.

Bankers and lawyers are expecting a rise in demand for the sale of companies or spinoffs. This was only a part of 33% of campaigns during the first half. Investor confidence is increasing, they said.

Goldman's Codo Lotti stated that "we expect public activism campaigns to increase in the second half, with renewed focus on M&A target, barring macro-headwinds."

Bankers and lawyers say that after making their name with loud public campaigns waged years ago by investors such as Carl Icahn and Bill Ackman, many activists now want to lower their profile and avoid the headlines.

According to a new study by SquareWell Partners, institutional investors who collectively manage $35 trillion in assets "overwhelmingly" view activism as an effective market force. 77% of them see it as catalyst for change, while 71% describe it as a driver of responsibility.

After establishing their reputation, activists might be willing to settle for a quiet settlement rather than engage in costly and messy proxy battles.

Jana Partners, for example, had long been pushing French-fry manufacturer Lamb Weston to make operational and board changes as well as possibly selling the company. The hedge fund avoided a high-profile fight in the boardroom by settling a dispute that placed four of their candidates on the board, and two others that both parties agreed upon.

Porretti, JPMorgan's Porretti, said that "peace is indeed breaking out as more settlements have been reached and board seats are going to activists." He added "but settlements can only be reached if both sides feel a little weak." Reporting by Svea Autumn-Bayliss and Emma-Victoria Farr, Frankfurt; editing by David Gregorio

(source: Reuters)