How Biden-era antitrust decisions are driving dealmaking
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President Trump prides himself on being a dealmaker, but some eye-popping dealmaking of late comes thanks to his predecessor's administration.
Why it matters: The Biden administration's antitrust crackdown, at the time sharply criticized by many in Silicon Valley, has now spawned a few interesting deal scenarios in tech.
Driving the news: Biden-era antitrust appears to be helping fuel an audacious bid by AI startup Perplexity to acquire Google's Chrome browser for $34.5 billion, Axios' Dan Primack notes, confirming a scoop by The Wall Street Journal earlier Tuesday.
- The Biden Justice Department had proposed that Google be forced to sell Chrome after the company was found to have illegally abused its search monopoly.
- A federal judge is now considering that remedy, and Perplexity could be trying to indicate that there would be a buyer in that instance, the Journal said. Bidders with fatter wallets than Perplexity, including OpenAI, could emerge if Google is forced to sell.
- Google has said it will appeal the monopoly ruling.
Case in point: For more signs of the Biden antitrust effect, look no further than the recent initial public offering of Figma. Its stock is up some 160% from its offering price of $33.
- The July 31 IPO was made possible after antitrust objections derailed a previously planned takeover by rival software design giant Adobe in 2023.
- The Figma IPO prompted former Federal Trade Commission chair Lina Khan to take a victory lap on social media, writing that Figma's market debut was "a great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value."
- That said, it was the Justice Department's antitrust division, not the FTC, that examined the Figma-Adobe deal.
Yes, but: The Biden administration's tough stance on mergers has not, with the benefit of hindsight, helped Spirit Airlines, which had sought to be acquired by JetBlue. That deal was blocked last year, and Spirit ended up in Chapter 11 bankruptcy, emerging from it just this past March.
- On Tuesday, Spirit issued a "going concern" warning, pointing to its financial difficulties.
What we're watching: The Trump administration's approach to antitrust so far does not appear to differ significantly from the Biden administration's.
- The impact of the cases the Trump FTC and FTC do end up taking could also similarly end up reverberating in the deal world in the next administration.
