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Shares of U.S. Steel, which bordered Nippon Steel’s offer to buy the company in December 2023 at $55, have never raised the hackles of politicians and steelworkers. They were trading around $32 this week. So in a sense, the outgoing President Joe Biden’s decision Breaking the deal It is already old news due to national security.
But there’s also something new: a scramble to understand the rules of the road for mergers and acquisitions. Many corporate advisers expected 2025 to be a relative fiesta, helped by the business-friendly presidency of Donald Trump. The reality may be more complicated.
So far the pointers are big no longer bad, per se. The Biden administration has made no secret of its skepticism about companies that dominate their fields, such as Amazon. Red tape abounds: U.S. deals worth more than $10 billion have taken twice as long to close in recent years than they did a decade ago, according to Goldman Sachs.
Trump’s tenure could see a return to a more simplistic view of antitrust, focused on traditional considerations of consumer welfare and less attention to factors such as competition for workers or the impact on other stakeholders. Bank of America chief Brian Moynihan and Goldman Sachs chief David Solomon both predicted a more benign market for M&A in 2025 under the new White House.
But if market power is not necessarily a deal-breaker, it still can be an externality. Both Biden and Trump have opposed Japan’s takeover of American steel. It’s not clear that’s unreasonable: The Japanese company has offered all kinds of concessions, including nearly $100mn in bonuses for US workers and keeping the company’s headquarters in Pittsburgh. Life is not a pleasant one for a sub-scale ironworker.
If Trump is suspicious of foreign rulers, such logic cannot be applied to the domestic scene. Putting America first is hard to do without taking care of — or keeping — foreign rivals like Google parent Alphabet, chipmaker Nvidia or mega-bank JPMorgan that could kick sand in the face. This is difficult to do when there is a hostile attitude towards local corporations.
A key challenge will be the technology sector. Personnel changes at top regulators — hawkish scholar Lena Kahn left as head of the Federal Trade Commission, for example — suggest a milder but less lenient approach. The new sweepstakes could soon be underway: The so-called Magnificent Seven, which includes Apple, Microsoft and Facebook owner MetaPlatform, have $530 billion of cash burning a hole in their balance sheets.
Meanwhile, US Steel can be a test of what happens to the losers. Local rival Cleveland-Cliffs has previously expressed interest in a local M&A solution. Trump has suggested that he can protect the company in other ways by using tariffs and taxes — making the interventionist merger calculation more slippery. By 2025, negotiations may be more frequent, but not necessarily easier.
