Trump’s antitrust appointment to unleash M&A ‘animal spirits’, says Morgan Stanley
President-elect Donald Trump’s picks for top regulators may not lead to free trade at all, but it should be more than enough to highlight the pending need for mergers and acquisitions, according to Morgan Stanley. Analyst Ryan Kenny said in a note to clients that the second Trump administration — which includes picking Andrew Ferguson to head the Federal Trade Commission and Gail Slater to head the Justice Department’s antitrust division — will be a welcome change for Wall Street investors as well. CEOs behind an aggressive approach to antitrust under the Biden administration. “Trump’s new appointments to the FTC and DOJ are likely to come with a traditional, simplified antitrust framework. This should drive animal spirits and improve corporate transparency in the M&A area where market conditions already support activity,” said Kenny. Transparency could be a key issue in the coming months, as some of the antitrust actions brought under current FTC Chairwoman Lina Khan were novel and scared off other potential deals, Kenny said. “This framework was less predictable as market concentration was defined in new ways. This kept many potential deals on the sidelines as the risk of legal challenges increased costs, increased time to complete deals, and risks consuming valuable management team and board time,” said the note. One exception to the changes may be Big Tech, of which Ferguson has been an outspoken critic. However, there should be more deals to be done even if deals involving big tech companies are disrupted, Kenny said. “Our view is that the coming boom in M&A activity will be broad, across all structures and sizes of deals,” the note said. Kenny’s top picks to play the M&A boom are Goldman Sachs and Evercore. Those companies should get a piece of the M & A action, regardless of which sector sees the most activity.
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