As published by Clark Street Capital in their November 7, 2024 BAN Report.
 

Potential Uptick in M&A

Wall Street seems very excited by the prospect of more M&A activity with a more friendly administration.

Some also expect more dealmaking, potentially among smaller and midsize banks. The expected departure of Lina Khan, who leads the Federal Trade Commission and has been a thorn in the side of executives hoping to work out tech acquisitions, was cheered by investors and bankers.

“A lot of these mergers have been thwarted by the current administration,” the activist investor Carl Icahn said in an interview late Tuesday. Given a Trump victory, he said, “That’s going to change.” 

 Dealmakers expect mergers and acquisitions to come roaring back, with the installation of business-friendly regulators replacing those backed by Sen. Elizabeth Warren (D., Mass.), a noted dealmaking foe. Goldman Sachs and Morgan Stanley were among the strongest performers on Wednesday; those firms are among the most deal-oriented.

“We’re poised for a potential surge in M&A activity,” Frank Aquila, Sullivan & Cromwell’s senior M&A partner, said Wednesday on LinkedIn.

Shares of firms whose deals have been scrutinized by the Biden administration, including Capital One Financial and its acquisition target, Discover Financial Services, on Wednesday rallied on the expectation that the administration would likely let more deals pass.

Jason Kuwayama of Godfrey & Kahn told us: “There certainly will be a wave of optimism among banks and their investors, regardless of whether their plans are to stay independent, sell or acquire. This should be tempered with an understanding that regulations won’t ease up overnight, even with complete control of the legislature.”