President-elect Donald Trump’s picks for top regulators may not lead to a complete liberalization of corporate deals, but they should be enough to unleash pent-up demand for mergers and acquisitions, Morgan said. Analyst Ryan Kenny said in a note to clients that the second Trump administration – including the selection of Andrew Ferguson to lead the Federal Trade Commission and Gail Slater to lead Department of Justice Antitrust Division – Will be a welcome change for Wall Street investment bankers and the financial community. “Trump’s new appointments at the FTC and DOJ are likely to usher in a more traditional, softer antitrust framework. This should inspire animal spirits and increase corporate transparency in a M&A environment where market conditions already support activity,” Ken Ni said. Kenney said “clarity” is likely to be a key buzzword in the coming months as some of the antitrust actions taken by current FTC Chair Lina Khan are novel and scare away other potential deals. “The framework is less predictable because of the novel way in which market concentration is defined. This leaves many potential transactions on the sidelines as the risk of legal challenges would increase fees, increase the time to complete the deal, and have the potential to drain valuable management teams and boards of directors Time is at risk,” the note read. One exception to these changes may be Big Tech, of which Ferguson has been an outspoken critic. However, even if deals involving the largest tech companies are blocked, there should be plenty of deals available, Kenney said. “We believe the coming rebound in M&A activity will be broad-based, spanning a variety of industries and deal sizes,” the report said. Kenny’s top picks in the M&A boom are Goldman Sachs and Evercore. No matter which industry has the most M&A activity, these companies deserve a piece of the action.
