Wall Street is salivating as President-elect Donald Trump is expected to usher in a new era of deal expansion in his second term, including an accelerated pace of mergers and acquisitions.
Trump, who campaigned on a promise to loosen the reins of the regulatory state, won the White House for a second time, boosting the Dow Jones Industrial Average, buoyed by banking, energy and cryptocurrency stocks. has hit a new high this week.
However, if antitrust enforcement is relaxed, U.S. company stock prices could rise across the board. Goldman Sachs predicted a 20% increase in M&A activity next year in a note to clients Wednesday. The investment banking giant said M&A activity was down 15% this year compared to 2023.
David Kostin, chief U.S. equity strategist at Goldman Sachs, said: “The regulatory stance of the Federal Trade Commission and the Justice Department's Antitrust Division, which have objected to many proposed business combinations over the past four years, will continue to change under the next administration.'' It is likely that further relaxation will occur.”
Warner Bros. Discovery CEO David Zaslav, whose cable news network CNN has long been an adversary of Trump, said he was optimistic the incoming administration would be “really positive” for the company's turnaround. expressed.
“A new government will be in place soon,” Zaslav told analysts during an earnings call Thursday.
“It's too early to tell, but it could bring about a very different pace of change and opportunities for consolidation, which will have the real positive accelerating effect this industry needs. Dew.”
Zaslav expressed hope in July that the next government would approve further mergers.
“What we need is an opportunity for deregulation so that companies can consolidate and do what we need to do and get better,” Zaslav said at the time. .
The Biden administration is taking an aggressive antitrust stance, led by Federal Trade Commission Chair Lina Khan, Securities and Exchange Commission Commissioner Gary Gensler, and Jonathan Canter, head of the Justice Department's antitrust division. This is causing frustration among business leaders.
The FTC, led by Kahn, has filed a lawsuit seeking to block the merger of supermarket giants Kroger and Albertsons. The agency also filed a lawsuit against Amazon for alleged antitrust violations related to Amazon's Prime membership service.
Tech companies such as Apple, Meta, and Google have also been targeted by antitrust laws by the Biden administration.
Several tech company CEOs, including Apple President Tim Cook, Google CEO Sundar Pichai and Amazon founder Jeff Bezos, were among the first to congratulate President Trump on his election victory.
Analysts predicted this week that the Trump administration would greenlight not only the Kroger-Albertsons merger, but also other deals currently on hold, including the proposed Tapestry-Capri deal.
Luxury retailer Tapestry, which owns Coach and Kate Spade, has seen its shares rise more than 5.5%, while Capri shares have risen 10% since Tuesday.
Shares of Frontier and Spirit, two airlines whose mergers were blocked by a federal judge, also soared following President Trump's victory earlier this week.
Gensler, a former Goldman Sachs banker, has become a thorn in the crypto industry due to dozens of lawsuits he has filed against digital currency companies and traders.
President Trump has promised to fire Gensler, who is expected to resign shortly after taking office in late January.
The transition team advising President Trump is reportedly considering Dan Gallagher, currently chief legal and compliance officer at retail trading platform Robinhood, as a possible replacement for Gensler.
Gallagher, who is popular among cryptocurrency executives who have donated millions of dollars to the Trump campaign, is currently the frontrunner, but discussions are fluid, two people familiar with the matter said.
SEC chairmen include former SEC Commissioner Paul Atkins, also a Republican and CEO of consulting firm Patomac Global Partners.
Atkins served on Trump's transition team in 2016 and was also a candidate for SEC chairman, Reuters reported at the time.
