With the bull market into its ninth year and counting, companies are allocating free cash flow away from share repurchases and toward M&A deals. The question is, who’s going to hook up with whom?
While there’s lots of liquidity out there in corporate America, the big wildcard in 2017 is Donald Trump. Should the president deliver pro-growth initiatives, such as reducing the regulation and bureaucracy companies face, CEOs are bound to make strategic acquisitions. If Trump pauses on plans for infrastructure, etc., as promised during the election, however, expect the level of deals to slow dramatically.
“If we go back into a period of higher market volatility, that will dampen the outlook for M&A,” Gerry O’Meara, head of M&A at SunTrust Robinson Humphrey recently said in Forbes. “A lot of people are concluding we’re going to get into a higher-growth mode as reflected by the equity market, but if we don’t, then clearly we would have less activity.”
With the AT&T Inc. (NYSE:T) and Time Warner Inc (NYSE:TWX) merger now expected to gain regulatory approval, investors ponder the next big deal. Here are seven M&A deals I think make a whole lot of sense.