How will the incoming Trump administration affect market consolidation and acquisitions?

President-elect Donald Trump’s return to the White House could bring change to the mergers and acquisitions market after President Biden’s administration challenged the success of several high-profile mergers in the past four years.

The Biden administration’s Federal Trade Commission (FTC) and the Justice Department’s antitrust division have intervened in several proposed mergers and acquisitions to challenge deals they see as undermining competition and harming consumers.

Among the deals that were eventually blocked by federal courts or abandoned by the parties involved in the deal, the $25 billion acquisition of Albertsons by Kroger, and the merger of airlines JetBlue and Spirit, and luxury fashion companies Capri and Tapestry, were also blocked. by court decisions.

With FTC Chairwoman Lina Khan set to leave the agency later this month and the leadership of the DOJ’s antitrust division also set to answer to a new administration, market participants expect Trump’s second administration to take a lighter approach to dealing with the next four deals. years.

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KPMG conducted a year-end survey of corporate and private equity brokers that found 76% of respondents said the election results would increase US M&A activity, while 80% said it increased their appetite for deals. Potential tax policy changes were seen as improving M&A activity by 811% of traders, while 79% said the election would lead to an easier regulatory environment or less confidence in deals.

Similar sentiments were found in a recent survey conducted by Teneo that found 83% of CEOs and 87% of investors expect the mergers and acquisitions market to receive significant returns by 2025, up from 68% last year. The share of respondents expecting “very large” M&A activity increased from 17% to 37% among CEOs and from 26% to 34% among investors.

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Kroger and Albertsons have called off their merger after being 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 found that 86% of both CEOs and investors expect there to be a faster pace of M&A activity under the Trump administration, while 80% of CEOs and 74% of investors predict the administration will have a positive impact on deal completion. .

Ted Jenkin, president of Exit Stage Left Advisors, told FOX Business that Trump’s selection of Andrew Ferguson to serve as FTC chairman, a $35 billion “Meeting Monday” in early December and potential tax changes in 2025 means that “the writing is on the wall. that the next four years should be very intense in the work of mergers and acquisitions.”

Raj Sharma, director of strategic business development and M&A at Itochu, said that inflation and low interest rates are likely to increase engagement during the Trump administration, as well as a new way of processing these deals.

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“President Trump used to allow M&A in the financial services, energy and industrial sectors during his tenure,” Sharma said. “He is expected to be re-elected for a second term, although he has been critical of the impact of big technology and will not support M&A in that space.”