Trump win may usher in M&A revival
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Japan's Nippon Steel Corp. has offered to acquire U.S. Steel for $14.1 billion. Photo: Justin Merriman/Bloomberg via Getty Images
Donald Trump's victory has ignited hope that mergers and acquisitions will surge under his light-touch regulatory administration.
Why it matters: A softer stance by Trump's merger cops would likely open the floodgates to a wave of deals seen as uncertain under the current antitrust regime.
The big picture: Progressives have applauded regulators' efforts in the last few years to curtail corporate consolidation broadly. Those days may be numbered.
Zoom in: The $35 billion credit card merger of Capital One and Discover will be a bellwether for how Trump's antitrust crew views the M&A environment. Shares of each company rose 15% after his election.
- "We think that under a Trump administration, deal approvals will speed up markedly and the process will be more clearly delineated," Piper Sandler managing director Mark Fitzgibbon wrote in a research note.
Across industries, the post-election view was that Trump's win was a welcome sign for consolidation.
- Tapestry Inc., owner of luxury brands Coach and Kate Spade, saw shares soar on the expectation its deal with Capri Holdings would eventually pass regulators, even after they went to court to block the deal.
- Shares in airlines Frontier and Spirit both spiked — a sign their previous attempt at a merger could be revived.
- Snickers maker Mars might also see a smoother path for buying snack maker Kellanova — a $36 billion deal announced in August.
Yes, but: Trump's first term was not entirely a free pass for mergers, as seen by the years it took AT&T to close its purchase of Time Warner.
- Also, Trump's vice president, JD Vance, has publicly signaled his support for the FTC's crackdown on Big Tech, an effort led by chair Lina Khan. Trump has opposed the proposed merger of U.S. Steel and Japan's Nippon Steel Corp.
Zoom out: Aside from a few unique examples, Trump's antitrust team is expected to be deal-friendly.
- "I would anticipate that we will get much less skepticism about M&A overall, and that will include retail and consumer products," says Mike Keeley, chair of the antitrust practice at Axinn, Veltrop & Harkrider.
State of play: The odds for a prospective merger between health insurance giants Cigna and Humana are better under a Trump administration, a source close to the deal says.
- The odds of UnitedHealth's agreement to buy home health giant Amedisys getting clearance also appear better under a Trump administration given the current scrutiny it has faced.
- Speaking of the financial services sector, Piper Sandler's Fitzgibbon noted that a more business-friendly Trump administration will benefit the industry beyond just M&A thanks to "lower costs, simpler rules, speedier approvals, [and] less uncertainty."
