Investment bankers say Trump’s mergers and acquisitions are already underway

President-elect Trump won’t officially take office for another week, but investment bankers say a surge in Trump-related dealmaking is already underway — as transaction activity stymied by the regulation-heavy Biden administration is about to explode.

That was the conclusion of a panel of investment bankers and private equity executives who discussed the return of corporate dealmaking at the Frontiers of Digital Finance conference in Miami on Tuesday.

“We will have more deals coming to market in 2025 than we have in the last two years,” said Jeffrey Levin, managing director of investment banking giant Houlihan Lokey, who spoke on the panel. “More capital has been raised in the last three years than has been raised in the history of private equity, but it has not been deployed.”

The conference, sponsored by a private lending company called Biz2X, which provides online lending solutions for small businesses, brought together some of the key players in finance and the intersection between finance and politics. Patrick McHenry, a former North Carolina congressman and chairman of the House Financial Services Committee, said in a keynote speech that Trump’s victory, combined with Republicans retaining leadership of the House and a majority in the Senate, will herald a new era of deregulation that… It will encourage capital formation.

How could the incoming Trump administration impact the M&A market?

McHenry said: “Washington is open, and the US economy is open. The era of regulation, law-making and policy in the post-financial crisis phase is over.”

During a panel discussion on mergers and acquisitions, David McGoon, managing director of Barclays’ Financial Institutions Group, noted that he is seeing an increase in appetite for deals, anticipating a lighter regulatory approach from the incoming Trump administration’s Federal Trade Commission, FCC, and Commerce Commission. Federalism. and the Antitrust Division of the Department of Justice.

The Biden appointees leading those three agencies have halted nearly all merger and acquisition activity in recent years; Those who chose to challenge regulatory restrictions faced long legal battles with the Biden deal police.

However, Trump is not expected to provide carte blanche for all deal-making. Its regulators remain skeptical about the power of big tech companies, and may view companies like Google, Apple, Amazon, Facebook and other tech giants with suspicion as they continue to grow in size.

Less regulation drives US stocks into the future, says IT director at BNY WEALTH

Once Trump finalizes leadership appointments at key agencies, other companies, such as banks, will likely face less regulatory scrutiny than Big Tech.

McGowan said Barclays is currently involved in several transactions that are a direct result of the post-election thaw in deal-making.

During the panel discussion, Avi Mehrotra, global head of activism, shareholder advisory and takeover defense practice at Goldman Sachs, said he expects mergers in regional banks – small and medium-sized banks with less than $100 billion in assets.

Mergers and acquisitions blocked or vetoed by the Biden administration in 2024

Given their size, regional banks benefit from mergers due to so-called broad synergies. These refer to the cost savings and revenue improvements resulting from the increased size and scope that comes with merging two entities.

The big four investment banks — Goldman Sachs, Morgan Stanley, JPMorgan and Bank of America — each have assets worth more than $1 trillion and, last year, generated more than half the profits of the banking industry combined, McGown noted.

McGowan sees this as a potential concentration risk, noting that easing regulation could lead to the emergence of smaller boutique firms to help reduce that risk.

“Part of the value of consolidation is finding ways to grow further, and part of it is reducing concentration at the top,” he said.

In addition to regional banks, other expected areas of M&A activity are in the fintech, industrial and consumer sectors, according to Mehrotra.

Get FOX Business on the go by clicking here

The media industry is also ripe for consolidation, with companies like Warner Bros. Discovery, Comcast and others suffering from declining advertising revenues and so-called cord-cutting, as consumers ditch traditional cable packages and get more benefits, people familiar with the matter say. Their news and entertainment online.

“The fact of the matter is that Biden thought he was helping consumers by stopping deal making, and all he was doing was making these companies weaker and less competitive,” one media executive, who wished to remain anonymous, told Fox Business. “.