Companies grapple with when to merge as they weigh Harris and Trump (Video)

The companies are in the dark about exactly how antitrust enforcement will change under a new administration, scuppering merger plans until the outcome is finalized in 2024.

Chip manufacturer Qualcomm (QCOM) halted consideration of acquiring struggling chipmaker Intel (INTCAccording to a report prepared by BloombergIt’s a delay intended to help the company evaluate the new administration’s approach to antitrust enforcement and U.S.-China relations.

Oil giant ConocoPhillips (POLICE) also hopes to advance the closing of Marathon Oil (MRO) It was stated that the purchase will continue until after the new president takes office. A report by The New York Times.

Another important deal hanging in the balance in this heated political period is credit card lender Capital One (COF) and Discover (DFS).

Capital One CEO Richard Fairbank told analysts on Thursday that he expects to complete the merger “in early 2025, subject to regulatory and shareholder approvals.”

The New York Times previously reported that the companies were hoping for the merger to take place on December 31 due to concerns that Donald Trump might view the merger negatively if he wins.

New York Attorney General Letitia James may have missed the chance for an earlier closure. James on Wednesday announced An investigation into whether the Capital One-Discover deal will hurt New Yorkers.

“We continue to work through the regulatory approval process and are fully mobilized to plan and deliver a successful integration,” Fairbank added in an earnings call Thursday.

The problem for any business currently considering M&A activity is that little has been said during the campaign by either Vice President Kamala Harris or former President Trump about how they will shape the agencies that oversee U.S. antitrust laws (the Justice Department and the Federal Reserve). . Trade Commission.

What’s more, changes to agencies’ antitrust guidelines and public sentiment could mean the tea leaves won’t be easy to read no matter who wins the White House.

“The question for businesses is what kind of person is going to hold those jobs at both the DOJ and the FTC,” said Fiona, the Yale economics professor. Scott Morton.

Antitrust attorney and Gunster shareholder Greg Bader said his firm continues to see potentially reportable mergers and acquisitions, but with elections pending “you really don’t want to initiate a merger right now, when it’s this dark.”

Barclays analyst Jason Goldberg said he thinks holding the U.S. election “no matter who wins” could be a positive for overall corporate investment banking activity.

“Companies will have a better understanding of what policies they will face in the next four years,” he added.

Trump – Harris

There is some reason to believe that both candidates may take a hard line on corporate mergers.

Although Harris has not publicly stated her antitrust stance, Bader and Scott Morton The vice president said they expect President Joe Biden to continue his administration’s wide-ranging efforts to rein in what it sees as anticompetitive behavior in a variety of industries.

The White House on Thursday announced a new investigation into competition in air travel after successfully blocking three airline mergers in four years.

The management also alleged that tech giants Apple acted anti-competitively (AAPL) and Amazon (AMZN) and Microsoft (MSFT) acquisition of gaming giant Activision Blizzard would create a gaming market monopoly (the district court refused to put on hold at the request of the FTC).

The FTC, led by Chairman Lina Khan, has won some victories, including a U.S. judge’s decision on Thursday to block the pending $8.5 billion merger of bag and accessories maker Tapestry and Capri.

The agency also objected to the connection between grocery chains Kroger (Korea) and Albertsons (ANGLE), is currently pending. On the campaign trail, Harris specifically named consolidations of food and beverage companies when discussing how she would increase regulatory scrutiny as president.

But Trump may support some of these causes based on his past actions. One of the Biden administration’s most significant competitive victories is against search giant Google (GOOG, Google)—was a lawsuit originally filed by Trump’s Justice Department, alleging that the tech giant was illegally monopolizing the search engine market.

Skadden, Arps, Slate, Meagher & Flom noted that the Trump administration has taken several steps actions that will strengthen enforcement of antitrust, developing new theories to challenge vertical mergers, creating the FTC’s Technology Task Force, and launching investigations into Google, Amazon, and Facebook (META), Apple (AAPL) and Microsoft.

On the other hand, Scott Morton said he expects Trump to favor Republicans’ preference for corporate profits by “allowing anyone who wants to merge.”

Otherwise, he expects the former president to make exceptions to definitive punishment against those he perceives as rivals, citing Justice Department decisions. Challenge AT&T’s acquisition of CNN And Allegations of pressure on marijuana mergers.

The Justice Department has told a federal judge it may recommend breaking up Google as an antidote to unhealthy competition in the search engine market.

In a recent interview conducted by Bloomberg’s editor-in-chief before the Economic Club of Chicago, Trump suggested that Google’s punishment could be met without forcing it to sell part of its empire.

“What you can do without dividing is make it more fair,” Trump said In an interview on October 15, he said:. The former president described Google’s search engine as “rigged” and expressed concern that the consequences of the case for Google could be in China’s favor.

lighter touch

Other antitrust lawyers predict Trump may take a lighter approach to M&A and monopoly management issues.

Schwabe shareholder Matt Bisturis guess He said a new Trump administration would likely “deemphasize regulatory reviews and facilitate private equity investments.”

Barry BarnettEven as those higher up in the Trump administration are less aggressive about the cases they bring and are willing to resolve them without a break, enforcement will be affected by other cases, noted Susman Godfrey’s antitrust litigation attorney. effects.

Barnett said even a second Trump administration could look different because the DOJ and FTC repealed vertical merger guidelines drafted under the Trump administration and I changed them with a more lenient standard for assuming mergers are illegal.

Barnett and Scott Morton also agree that judges are changing the way they evaluate antitrust cases, moving away from defendant-friendly interpretations of antitrust cases. consumer welfare standard.

“The general public understanding that we have a problem and we need to mobilize our policy tools to solve that problem undoubtedly influences judges,” Scott Morton said, “because they are tasked with looking at the evidence, and the evidence is really, really strong.”

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed. Yahoo Finance’s David Hollerith contributed to this report.

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