Trump’s Deregulation Promises Could Spell M&A Glory, Or Not

The deal-making vibes on Wall Street were strong after the author of “The Art of the Deal” won his bid to return to the White House. Shares of major asset managers Apollo Global, KKR, and Blackstone climbed 9.7%, 9.5%, and 4%, respectively, on Wednesday. 

Considering Trump’s promises to cut red tape and ease antitrust pressure on mergers and acquisitions, that may not sound very surprising, but the story is more complex. 

Merger Purger or Urger?

While the value of global aggregate M&A rose 10% to $1.6 trillion in the first nine months of this year, according to the Boston Consulting Group, deal activity paled compared to the zero-interest days of 2021, which saw $3.3 trillion in its first three quarters.

Trump’s commitment to less regulation — coupled with a promise to lower corporate taxes — is the stuff of asset management dreams. “My sense is that M&A will have a big uptick,” Warner Music Group chair Michael Lynton told CNBC Wednesday. “Given what I’ve heard from this new administration, there’ll probably be a lot less scrutiny over those matters and so as a result there’ll be a lot more M&A.”

On the other hand, Trump’s saber-rattling about tariffs and trade wars is vexing for asset managers and dealmakers — not to mention the M&A bankers and lawyers, who are like symbiotic organisms that feed off deals. This suggests a mixed future:

• Lucinda Guthrie, head of financial data intelligence platform Mergermarket, told Reuters that “2025 could be a breakout year for M&A, especially in industries heavily influenced by capital gains tax or regulatory uncertainty.” Lynton, the WMG chair, said the media sector in particular could benefit from Trump’s light touch on domestic economic activity “because there needs to be consolidation.”
• But Trump’s first administration intervened in some deals, failing to block AT&T’s acquisition of Time Warner and successfully stopping Broadcom’s attempt to acquire Qualcomm, citing national security. His continued emphasis on national security could also thwart cross-border deals.

Real-Time Impact: Shares of Kroger and Albertsons, which are set to merge, were up 4.2% and 1.6%, respectively, on Wednesday, perhaps a wink from markets that they’re confident the deal will go through. On the other hand, steelmaker Cleveland-Cliffs rose a whopping 20%, likely because investors think it has a better chance of acquiring leading rival U.S. Steel — that’s because Trump has pledged to block Japan-based Nippon Steel’s proposed acquisition of the company.