In light of regulators passing the new tax reform, several corporations stated that they will invest more in their U.S. operations. For example, AT&T Inc. (NYSE: T) said it will invest $1 billion in the U.S., including giving 200 thousand of its employees a $1,000 bonus.

The new tax bill will reduce the corporate tax rate from 35 percent down to 21 percent. For private equity firms, this may mean on a higher return on their investments, says Nixon Peabody partner Richard Langan Jr. He sees the pharmaceutical, manufacturing and consumer sectors benefiting the most from the tax changes. Langan shared more thoughts on the topic with Mergers & Acquisitions:

How is the tax bill being received in the middle market community?
I think there is a lot of enthusiasm in the middle market. There was a lot of uncertainty this year in M&A due to political uncertainty in Washington. The bill is going to help companies with foreign investments.

What does it mean for mid-market M&A?
There will be great investments by some companies including on infrastructure. It will cause them to make some M&A decisions particularly on the buyside. I think strategics, particularly in the middle market, will benefit from the reduction in corporate taxes. This may also cause some family funds to consider M&A as opposed to interfamily transfers.

Which sectors will benefit from tax changes?
There are some incentives that may benefit some industries more than others. Manufacturing companies will see some immediate write-offs and an increase in their enterprise values. In addition, I see oil and gas, pharmaceuticals and consumer goods companies, especially those with foreign operations benefiting.