So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come.
The Trump Effect
How President Donald Trump will shape the regulatory environment is weighing heavily on potential deal flow. Markets are showing (generally) hopeful signs for M&A, but many questions remain. These include: the level of scrutiny Trump’s administration will apply to foreign investments in US national security assets and businesses, the policy implications of the bipartisan call for drug pricing reform, the fate of the Affordable Care Act, reforms for companies that wish to invert for tax reasons and the treatment of carried interest for private equity and other financial buyers, among a host of other things.
Potential acquirers are also waiting to see if Trump will grant a tax reprieve for the repatriation of offshore cash, which could free up potentially large coffers held by tech and other serial acquirers for acquisitions or other investments. Early reports predict that Trump will be less aggressive in seeking to block healthcare and other mergers for anti-competitive reasons but that tough enforcement of HSR filing and notification requirements for acquisitions will continue. (See our memo on 2017 Antitrust Trends and Developments to Watch.) We also expect less intervention from the SEC, reversing the increased enforcement trend of the Obama years.