Trump win may imperil major M&A deals

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Donald Trump’s position on mergers and acquisitions, particularly the proposed merger between AT&T and Time Warner, may signal tougher times for major deals going forward.
 
Trump, who defeated Hillary Clinton in the just-ended US presidential election, has been open about his opposition to the US$85.4 million (about $111.23 million) AT&T-Time Warner deal.
 
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN — a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said in a speech in Pennsylvania last month, Bloomberg notes.
 
He had called the Time Warner deal, a manifestation of content creators either merging with fellow content creators or with distributors, “poison” to democracy, the news organisation adds.
 
Trump’s comments come as six of the largest global mergers announced in 2016 are still on the table waiting for regulatory approval in various jurisdictions.
 
Apart from the AT&T-Time warner merger, the following deals are still pending according to Bloomberg: Bayer-Monsanto (US$66 billion or about $85.97 billion), British American Tobacco-Reynolds American (US$47 billion or about $61.22 billion), Qualcomm-NXP (US$47 billion or about $61.22 billion), ChemChina-Syngenta (US$43 billion or about $56.01 billion), Enbridge-Spectra (US$28 billion or about $36.47 billion).
 
“Much will depend on the extent to which President-elect Trump’s campaign positioning translates to policy,” said Mike Flockhart.
 
The Herbert Smith Freehills London corporate partner said that if America becomes more protectionist, “we could see an impact on cross-border deal activity.”
 
The possible slowdown in the US comes as domestic M&A activity in the UK has been reported to be at a 30 year-low after the Brexit vote.
 
Nonetheless, other regions are bucking the trend, particularly in the Asia-Pacific region which recorded a 30% year-over-year increase and 67% quarter-over-quarter jump in cross-border M&A values for the third quarter of 2016.
 

Related stories:
30 year-low for UK domestic M&A deals after Brexit vote
Asia-Pac M&A up despite global market slump
 

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