Constellation Research CEO R Ray Wang and Heritage Foundation public finance economist EJ Antoni join Mornings with Maria to discuss their outlook for 2025.
President-elect Donald Trump’s return to the White House could lead to a shift in the mergers and acquisitions market after President Biden’s administration successfully challenged several high-profile mergers over the past four years.
The Biden administration’s Federal Trade Commission (FTC) and the Justice Department’s antitrust division intervened in a number of proposed mergers and acquisitions to challenge deals they viewed as harming competition and potentially harmful to consumers.
Among the deals that were ultimately blocked by federal courts or abandoned by the parties to the deal were Kroger’s $25 billion acquisition of Albertsons, while airline mergers JetBlue and Spirit, as well as luxury fashion companies Capri and Tapestry, were also blocked. by court decisions.
With FTC Chairwoman Lina Khan expected to leave the agency later this month and leadership of the DOJ’s antitrust division also expected to change direction with the new administration, market participants expect what the second Trump administration takes a lighter approach to deals over the next four years. years.
MERGERS AND ACQUISITIONS THAT WERE BLOCKED OR CHALLENGED BY THE BIDEN ADMINISTRATOR IN 2024
President-elect Donald Trump’s administration appears likely to take a more pro-merger approach to mergers and acquisitions. (SAUL LOEB/AFP via Getty Images / Getty Images)
KPMG conducted an annual year-end survey of corporate and private equity dealmakers that found 76% of respondents said the election results would increase U.S. M&A activity , while 80% said it would increase their own appetite for transactions. Potential tax policy changes are seen as boosting M&A activity by 811% of dealmakers, while 79% believe the election will lead to an easier regulatory or antitrust environment for deals.
Similar sentiments were seen in a recent survey conducted by Teneo that found 83% of CEOs and 87% of investors expect the M&A market to see a major return in 2025, up from 68% last year . The share of respondents who expect “a significant increase” in M&A activity increased from 17% to 37% among CEOs and from 26% to 34% among investors.
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Kroger and Albertsons abandoned their merger after it was blocked by a federal court. (Kroger: Charles Bertram/Lexington Herald-Leader/Tribune News Service via Getty Images | Albertsons: Shelby Tauber/Bloomberg via Getty Images / Getty Images)
The survey also finds that 86% of CEOs and investors expect the pace of M&A activity to increase under the Trump administration, while 80% of CEOs and 74% of investors predict the administration will have a positive impact on concluded transactions. .
Ted Jenkin, president of Exit Stage Left Advisors, told FOX Business that Trump’s selection of Andrew Ferguson as FTC chairman, a $35 billion “merger Monday” in early December and possible Tax changes in 2025 mean that “the writing is on the wall.” that the next four years should be extremely robust for M&A activity.
Raj Sharma, director of strategic business development and mergers and acquisitions at Itochu, said lower inflation and lower interest rates are likely to boost deal-making under the Trump administration, as well as a new approach to reviewing such transactions.
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“President Trump has generally been rather lenient on mergers and acquisitions in the financial services, energy and industrial sectors during his term,” Sharma added. “He is expected to be permissive again in his second term, even though he has criticized the influence of big tech and will not be as supportive of mergers and acquisitions in this area.”
