Happy merger Monday, one and all!
Regulators like the SEC, FTC, and Department of Justice have stepped up their game under the Biden administration, playing spoiler to companies attempting to join forces. Perhaps the most recent and visible example of this is the failed merger between JetBlue Airways and Spirit Airlines, which was shot down by a federal judge back in January, ultimately leading to Spirit’s bankruptcy in November.
But there’s a new sheriff in town: Donald Trump. A second Trump administration promises to usher in an era of regulatory flexibility for mergers and acquisitions, and some companies are already pulling the trigger on deals that probably wouldn’t have gained approval under the current administration.
Don Draper likes what he sees: Omnicom Group, the world’s third-largest ad company, will acquire Interpublic Group, the world’s fourth-largest advertiser, to create a new powerhouse in the world of media advertising. The $13.25 billion all-stock acquisition is expected to close in the second half of 2025, and promises to upend the ad ecosystem at a time when new technology like AI threatens traditional players. Omnicom sank 10.19% today, while Interpublic rose 3.55%.
Willy Wonka agrees: In 2016, snack foods titan Mondelez International eventually gave up on a $23 billion bid to acquire candy king Hershey Co. Now, Bloomberg reports that Mondelez has sweetened the deal, gearing up to acquire Hershey for around $50 billion. Discussions are still in the early stages, but a team-up makes sense on paper: Rising prices thanks to high inflation, combined with health-conscious customers, have hurt the bottom lines of consumer goods companies everywhere. Mondelez dropped 2.26% today, while Hershey soared 10.85%.
How to invest
More deals like these are likely on the horizon, which means investors should keep their eyes peeled for opportunities. One sector they should watch closely: mid-cap banks.
Making sense of market moves
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“We believe bank M&A, which in part has been hamstrung by regulation, may increase under the Trump administration,” Bank of America analysts wrote in a note last week. “The improved buyer currencies, scope for increased capital flexibility via potential regulatory easing, and a reduced capital hit from rate levels (assuming rates remain within recent trading range) are coming together to create a relatively favorable backdrop for banks to consider engaging in M&A, in our view.”
Keep in mind that not every deal is a sure thing: Trump has already declared he will block the acquisition of US Steel by Japanese competitor Nippon Steel. But with more company combinations coming soon, there will be plenty of chances for investors to profit.—MR