(Bloomberg) — Companies are dusting off their dealmaking playbooks as an expected loosening of regulation lifts both acquisitions and stock market debuts in the coming year, according to Wall Street advisers.
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Based on the policy pledges that Donald Trump made during the presidential race, “I think there’s probably a sentiment that M&A activity in the US might be slightly more robust,” said Christina Minnis, head of global credit finance & global acquisition at Goldman Sachs Group Inc. (GS)
Minnis expects “a little bit more reservation in Europe” owing to uncertainty on tariffs the US could impose, but deals in general should be picking up by the summertime, she said at Bloomberg’s Women, Money and Power conference in London on Tuesday. “Since the election, there’s been an increased amount of inquiry, both from sponsors as well as corporates that were either on the sidelines or nervous about what was going to happen,” she added.
Alison Harding-Jones, Deutsche Bank AG’s (DB) global head of M&A, said the new administration has signaled it will have a more relaxed stance on dealmaking, marking the end of an era where watchdogs could pore over transactions for over two years and some companies haven’t even tried to get deals through the regulatory process.
“The mindset is the US has definitely been much more difficult under Biden, and that will change and get better,” she added.
Even in private equity, where buyout firms are sitting on trillions of dollars in unspent capital, the environment is expected to improve next year, said Simona Maellare, global co-head of the alternative capital group at UBS Group AG.
“In the past, what has prevented deals was this bid-ask on valuations and people thought sponsors need to be realistic,” Maellare said. “But the economics don’t work like that. If they’re not encouraged, if they don’t make the returns they really can’t do it.”
A more protectionist US leadership might also mean Europe tackles consolidation of its own banking industry, which has lagged far behind the US since the financial crisis, Harding-Jones said. While there’s been an uptick in acquisitions by lenders in the region this year, it’s mostly been within countries rather than building the banking union long touted by European lawmakers.