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Shares of US Steel never reached the $55 that Nippon Steel offered to buy the company in December 2023, in a cross-border tie-up that raised arguments from politicians and steelworkers alike. This week they were trading at around $32. So in a sense, outgoing President Joe Biden’s decision to scrap the deal on national security grounds is already old news.
But there’s also something new: a scramble to understand the rules of the road for mergers and acquisitions. Many corporate advisers had expected 2025 to be a relative holiday, helped by Donald Trump’s more business-friendly presidency. The reality may be more complicated.
So far, the indications are that bigger isn’t necessarily worse, per se. The Biden administration had made no secret of its skepticism toward companies that were dominant in their field, such as Amazon. In recent years, deals worth more than US$10 billion have taken twice as long to close as they did a decade ago, according to Goldman Sachs.
Trump’s term could see a return to a simpler way of looking at antitrust, centered on traditional notions of consumer welfare — and paying less attention to things like competition for employees or the impact on other stakeholders. Bank of America chief Brian Moynihan and Goldman Sachs chief David Solomon have both predicted a kinder market for M&A in 2025 thanks to the new occupant of the White House.
But while market power isn’t necessarily a deal breaker, foreign currency still can be. Both Biden and Trump opposed Nippon’s takeover of US Steel. It’s not clear that this was rational: the Japanese company had offered all kinds of concessions, including nearly $100 million in bonuses for American employees and keeping the company’s headquarters in Pittsburgh. Life is not fun for a steelmaker.
If Trump is leery of shopping with foreign buyers, such logic is unlikely to apply to the domestic landscape. Putting America first is hard to do without feeding — or supporting — giant companies like Alphabet’s Google, chipmaker Nvidia or mega-bank JPMorgan that can kick sand in the faces of foreign rivals. This in turn is difficult to do while maintaining an adversarial view of domestic corporate expansion.
A key test will be the technology sector. Personnel changes at top regulators — tough academic Lina Khan as chair of the Federal Trade Commission, for example — suggest a softer but hardly subtle approach. New brooms may soon be put through their paces: the so-called Magnificent Seven, which include the owners of Apple, Microsoft and Facebook Meta Platforms, have $530 billion in cash burning a hole in their balance sheets.
Meanwhile, US Steel may be a testament to what happens to losers. Local rival Cleveland-Cliffs had previously expressed interest in a domestic M&A solution. Trump has suggested he could protect the company in other ways, using tariffs and taxes — interventions that make the merger calculation even more slippery. Agreements may become more frequent in 2025, but not necessarily simpler.
john.foley@ft.com
