Trump Antitrust Appointments Support A Rebound In M&A Activity

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call is on the Mergers & Acquisitions (M&A) landscape in North America, particularly in the context of the upcoming Trump administration and its potential impact on antitrust regulations [8][9]. Core Insights and Arguments 1. Antitrust Framework Shift: The new appointments of Andrew Ferguson as FTC chair and Gail Slater to lead the DOJ's Antitrust Division are expected to bring a more traditional and lighter touch to antitrust enforcement, which could stimulate M&A activity [8][9]. 2. Market Conditions: Current market conditions are already favorable for M&A, with increased corporate clarity and a rise in "animal spirits" among companies, leading to a resurgence in deal discussions [9][19]. 3. Historical Context: Historically, US large cap tech M&A has accounted for a very small percentage (0% to 5%) of global M&A volumes, indicating that while scrutiny may increase, the overall impact on M&A activity may be limited [9][20]. 4. Regulatory Easing: There is a consensus that the regulatory environment will ease, although the process may be gradual. This easing is expected to encourage companies to pursue mergers that had previously been sidelined due to regulatory concerns [19][40]. 5. Increased Deal Activity: Post-election, there is a notable increase in discussions and vetting of potential deals, with expectations that regulatory burdens will be lifted, thus unlocking more M&A activity [19][40]. 6. Sector-Specific Scrutiny: While large tech deals may still face scrutiny, the overall sentiment suggests a more favorable environment for M&A across various sectors, with a focus on vertical deals being less contentious than horizontal ones [40][50]. Additional Important Insights 1. Leading Indicators: Leading indicators for M&A activity are showing improvement, with global M&A announcements increasing year-over-year for five consecutive quarters. This trend is supported by rising equity markets and low volatility, which narrow bid-ask spreads in deals [87]. 2. Corporate Cash Levels: Higher corporate cash levels and improved liquidity conditions are also contributing to a more favorable environment for M&A [87]. 3. Future Projections: Analysts predict a significant rebound in M&A activity, with expectations for a return to normalized levels in 2025 and potential overshoot in 2026/2027 [97][98]. Conclusion The conference call highlights a pivotal moment for M&A activity in North America, driven by anticipated regulatory changes under the new administration. The combination of favorable market conditions, increased corporate confidence, and easing regulatory scrutiny is expected to lead to a significant uptick in M&A activity across various sectors in the coming years.