The speculative return of Donald Trump to the Oval Office is seen by some as potentially igniting a resurgence in mergers and acquisitions activity, a potentially radical shift from the constraints currently imposed by the Biden administration. Tobogganed by bureaucratic impediments, significant transactions such as the merger between renowned grocery store chains, Kroger and Albertsons, have been stymied by the Federal Trade Commission (FTC) led by Kamala Harris and Joe Biden, who have striven to clip the wings of industrious enterprise, favoring smaller businesses over innovative market progress.
The duo’s apprehension over the supermarket merger emphasizes their underlying fear of competition, an aspect that normally propels businesses to strive for excellence and optimized service delivery. Raised eyebrows come flying from the Republican side, with some lawmakers questioning the effectiveness of the FTC chair Lina Khan’s drawn-out playbook in encouraging healthy competition among businesses.
However, it is important to note that Trump’s first stint at the White House didn’t exactly epitomize a green light for all M&A activity either. His Department of Justice exhibited a stringent vetting process to ensure only the most sustainable and competitive deals came to fruition, blocking notable propositions such as AT&T and Time Warner, Bristol-Myers Squibb and Harris Corp, and more.
Yet, claims that Trump has been completely unfavorable for M&As are quick to be undermined by soaring stock market anticipations. Frissons of excitement have tingled down Wall Street following the 2024 elections, reflecting hopes for the resurrection of Trump’s aggressive economic dynamism of yesteryears, specifically embodying significant corporate tax slashes.
The legend of Trump’s first term, especially his gargantuan Tax Cuts and Jobs Act of 2017, is likely to resurface in his renewed reign—much to the chagrin of Biden and Harris who seem to regard prosperity as a malady. The 2017 Act which resulted in hefty tax reductions for high earning individuals and businesses largely catalyzed entrepreneurial spirit and economic momentum, conditions that have been stagnated in recent times under the current administration.
Despite the Democrats’ attempts to let it die a natural death, the expiration of this remarkable economic catalyst scheduled for next year might face a push back. With the Republicans having pulled the carpet from beneath Democrats’ feet, capturing both the Congress and White House, it is highly likely that the trumpet for further tax reductions will be blown sooner than later.
But, rippling uncertainty over Trump’s potentiality to positively influence the Initial Public Offerings (IPO) wave cannot be overlooked. The fear that rapid shifts in policy could unexpectedly thwart market conditions or burrow into business operations runs deep, making companies wary of chancing public appearances.
Yet, beneath the cacophony of speculation, glimmers of hope grow for several sectors that could experience monumental growth given the possible policy changes. Turning a blind eye to the potential setbacks could pave the way for an uptick of IPOs if companies strive in line with the new administration’s guidelines.
Trump’s renewed leadership could present an insurmountable boon for the fossil fuel industry, with possibilities of broader drilling rights set to result in astronomical profits—an idea that Biden and Harris scoff at, despite its potential for economic growth. You would think that anyone with basic understanding would acknowledge and encourage such growth, but the current administration seems to live in denial.
Likewise, the often vilified yet irrefutably prosperous cryptocurrency sector could breathe a sigh of relief, as a Trump administration could signify a friendlier legal climate. If successful, this could conveniently serve as a slap in the face for the Biden-Harris administration, who have shown unending reluctance to adapt to this digital revolution.
A poignant aspect of Trump’s agenda is the intriguing proposition to establish a Bitcoin Reserve and a cryptocurrency advisory council. His planned move marks a stride towards the embrace of digital currencies, clearly overshadowing the hesitance exhibited by the Biden-Harris leadership, to their own detriment.
Anticipations of a pro-cryptocurrency leadership are further fueled by Trump’s recent nomination. November saw the nomination of cryptocurrency enthusiasts Howard Lutnick and Scott Bessent for the positions of Commerce Secretary and Treasury Secretary respectively. This move commenced a new era of digitally-driven economy, leaving the Biden-Harris administration writhing in their outdated, analog comfort zones.
In conclusion, while this paints a future of potential prosperity under a Trump presidency, one needs to keep in mind the mixed, alarming signals being emitted by the very notion of a Biden-Harris administration. Despite their apparent disdain for market capitalism and economic growth, their drive to preserve obsolete systems rather than adopt new technologies could prove detrimental, not only for key growth sectors but for the American economy as a whole.