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U.S. Steel shares never hit $55 when Nippon Steel offered to acquire the company in December 2023, in a cross-border deal that raised hackles from politicians and steelworkers alike. This week they were trading at around $32. So in a sense outgoing President Joe Biden’s decision Contract squash Already old news on national security grounds.
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 fest, helped by a more business-friendly presidency in Donald Trump. The reality can be more complicated.
So far, indications are that bigger isn’t bad, per se. The Biden administration has made no secret of its skepticism toward companies as dominant in their field as Amazon. Red tape abounds: In recent years, $10 billion worth of deals have taken twice as long to close than a decade ago, according to Goldman Sachs.
A Trump tenure could see a rollback to a more simplistic way of looking at antitrust, focusing on traditional notions of consumer welfare — and paying less attention to issues like employee competition or the impact on other stakeholders. Bank of America chief Brian Moynihan and Goldman Sachs boss David Solomon both forecast a kinder market for M&A in 2025 for the new White House occupant.
But if market power isn’t necessarily a deal-breaker, foreignness still can be. Both Biden and Trump have opposed Japan’s takeover of US steel. It’s not clear that this was reasonable: The Japanese company offered all sorts of concessions to US employees, including bonuses of around $100 million and the retention of the company’s headquarters in Pittsburgh. Life is no fun for a subscale steelmaker.
If Trump is suspicious of takeovers with foreign buyers, such logic is unlikely to apply to the domestic landscape. It’s hard to put America first without nurturing or sustaining giants like Google parent Alphabet, chipmaker Nvidia or mega-bank JPMorgan that can slap foreign rivals in the face. It is difficult to do this while maintaining a hostile view of internal corporate embiggening.
A key test will be the technology sector. Staff changes at top regulators — such as the formidable academic Lina Khan as head of the Federal Trade Commission — suggest a gentle but hardly flexible approach. The new broom may soon be put through their paces: The so-called Magnificent Seven, which includes Apple, Microsoft and Facebook’s owner Meta Platform, have $530 billion in cash burning a hole through their balance sheets.
Meanwhile, US Steel could be a test of what happens to losers. Domestic rival Cleveland-Cliffs had earlier expressed interest in a domestic M&A solution. Trump has suggested he could protect the company in other ways, using tariffs and taxation — interventions that make the calculus of consolidation even more slippery. Dealmaking may become more frequent in 2025 but not necessarily easier.
