Is M&A turning around?

Summary

Podcast Summary: Unhedged – "Is M&A Turning Around?"

Release Date: July 24, 2025
Host: Aidan Reider (Guest: Sujeet Indap, FT’s Wall Street Editor)
Duration: Approximately 17 minutes

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Introduction to M&A Landscape Under the Trump Administration

Aidan Reider opens the episode by setting the stage for the discussion on mergers and acquisitions (M&A) amidst the Trump administration's policies. He highlights the initial optimism among Wall Street professionals following the Republican trifecta in the White House and Congress, which many anticipated would ignite a surge in lucrative deals after a subdued Biden administration period.

Rob Armstrong and Katie Martin typically co-host, but in this episode, Aidan Reider fills in alongside Sujeet Indap, the Financial Times’ Wall Street editor.

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Initial Optimism vs. Current Reality in M&A

Rob Armstrong asks Sujeet Indap about Wall Street's excitement when Trump took office.
Sujeet Indap (00:31) responds:

"Back in November, some of the key deal-making stocks, particularly in the boutique investment banks sector, shot up. The expectation was that Donald Trump would unleash animal spirits into the deals market with more lax regulators, removing figures like Lina Khan and Jonathan Kanter from the antitrust scene. The belief was that 2025 would herald a golden age of deal-making."

However, Sujeet notes that the first six months under Trump have been "not so great" (02:16), with deal-making being lethargic due to various factors, including the administration's erratic posture and policy uncertainty.

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Impact of Trump's Administration on Specific Deals

Rob Armstrong inquires about the U.S. Steel deal and Trump's involvement. Sujeet explains (03:12):

"The U.S. Steel deal, initially blocked by Biden on national security grounds, was resurrected by Trump. The administration introduced a 'golden share'—a unique concept in America—that allows the government to influence corporate actions without holding economic value. This unprecedented move has introduced a new layer of complexity and political risk into large deals."

Rob comments on the antithetical nature of this approach to traditional Republican politics, to which Sujeet agrees, emphasizing the unusual government intervention in the private sector.

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Regulatory Shifts and Their Implications

Discussing regulatory changes, Sujeet highlights (05:23):

"Under Trump, the FTC and Department of Justice have brought in a team more permissive than their Biden-era predecessors, though still somewhat quirky, especially regarding big tech. While not perfect, Wall Street feels this new team is manageable."

However, challenges remain as the administration maintains a complex stance on regulation, exemplified by figures like J.D. Vance showing interest in Lina Khan's corporate power theories.

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Signs of M&A Recovery and Future Outlook

Despite initial slowdowns, Sujeet observes a recent positive shift (06:38):

"With the passage of the big budget bill, reducing fiscal policy uncertainty, and the completion of bilateral trade agreements like the Japan deal, Wall Street sentiment has improved. Companies have strategic imperatives driven by technological advancements and market changes, fueling a resurgence in deal-making."

Rob summarizes the factors reducing uncertainty: clearer tariff terms, an accommodative budget bill, and the availability of debt and equity financing.

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Notable Upcoming Deals

Sujeet outlines significant upcoming mergers, starting with the potential $250 billion railroad merger between Union Pacific and Norfolk Southern (09:02):

"This consolidation aims to overcome interchange complexities in Chicago, a major cargo bottleneck. Despite strict Surface Transportation Board regulations that typically prevent such mergers, current market dynamics and regulatory openness under Trump may allow this deal to proceed."

He likens the scenario to the "Gilded Age," drawing parallels to historical railroad magnates.

Another prominent deal is the Paramount acquisition by Redbird Capital and Skydance (11:55):

"This complex deal involves keeping Paramount public while involving major shareholders like the Redstone family. The Trump administration's intervention, especially regarding CBS's contentious relationship with Trump, adds a unique political dimension to the acquisition process."

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Bullish Indicators in the M&A Market

Sujeet points out optimistic signs, such as Goldman Sachs canceling planned layoffs due to upcoming deals (11:37):

"The decision to retain workforce amidst robust deal activity boosts morale and indicates a healthy M&A environment."

He emphasizes that strategic corporate goals and the availability of financing continue to drive the appetite for deals, positioning the current period as a pivotal moment for M&A resurgence.

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Long and Short Segment

In the show's regular "Long and Short" segment, both hosts share their selections:

• Sujeet Indap goes long on Scotty Scheffler, praising him as the most dominant golfer since Tiger Woods and lauding his performance in the British Open.

  "I'm going long on Scottie Scheffler. It's amazing to watch him as a golfer—he's the new Tiger Woods."

• Rob Armstrong opts to short Japan, citing macroeconomic headwinds such as rising inflation, increasing rice prices, labor concerns, and questions about future demand.

  "I'm short Japan. While the recent tariff deal provides clarity, Japan faces significant economic challenges that the deal alone won't resolve."

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Conclusion and Forward Look

Rob Armstrong and Sujeet Indap conclude on an optimistic note, recognizing that the M&A landscape is poised for growth as strategic needs align with improved regulatory and economic conditions. However, they acknowledge the persistent unpredictability introduced by the Trump administration's unique approach to deal-making and regulation.

Rob reflects:

"We're back to the post-election optimism with strong M&A activity on the horizon, driven by strategic imperatives and a more conducive external environment."

Sujeet concurs, highlighting the continual strategic imperatives driving companies to pursue growth through deals, now finding a favorable window to act.

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Production Credits

Produced by Jake Harper
Edited by Bryant Urstadt
Executive Producer: Jacob Goldstein
Additional Help: Topher Forhouse
Cheryl Brumley, FT's Global Head of Audio
Special Thanks: Laura Clark, Alistair Macki, Greta Cohn, and Natalie Sadler.

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Note: This summary is based on the transcript provided and aims to encapsulate all key discussions, insights, and conclusions from the episode "Is M&A Turning Around?" on the "Unhedged" podcast by Financial Times & Pushkin Industries.

Transcript

[Aidan Reider]

At pjum, we actively manage risk today while targeting outperformance tomorrow. So no matter what investment risks concern you most. From geopolitics to inflation to liquidity, PGM brings disciplined risk management expertise that spans 30 market cycles. Our active approach finds opportunities and volatility, helping our clients to navigate risk and achieve their long term goals. PJUM our investments shape tomorrow today.

[Sujeet Indap]

Pushkin.

[Rob Armstrong]

Back in November, M and A bankers were popping champagne bottles, excited that the Republican trifecta in the White House and Congress would finally allow them to get the lucrative deals they've been waiting for for the entire Biden administration. So far, in the first six months of the Trump administration, that has not been totally Dealmaking has been slower than people had hoped. Today on the show is M and A Turning a Corner. This is Unhedged, the finance and markets podcast from the Financial Times in Pushkin. My name is Aidan Reider. I'm filling in for Rob Armstrong and Katie Martin. And today I'm joined by sujeet Indap, the FT's Wall street editor and the person with the lowest handicap on the golf course of anybody in the newsroom.

[Sujeet Indap]

Great to be here, Aidan. I've got a tee time in 20 minutes.

[Rob Armstrong]

Well, let's get into it. Could you just walk listeners through what were Wall street people excited about coming to this administration?

[Sujeet Indap]

Sure. So if we go back, if we rewind to the days right after the November election and Trump's decisive victory, we saw like some of the key deal making stocks, particularly the boutique investment banks sector, I follow, just shoot up. And the thought was this really divisive, uncertain election was over. And not only was it over, Donald Trump had won and he was going to finally unleash animal spirits into the deals market. He would have much more lax regulators. Lina Khan and Jonathan Kanter, the, the hawks from the Biden antitrust regime were going to no longer be on the scene and this was going to be 2025 would be a golden age of deal making.

[Rob Armstrong]

So how has that prediction played out so far?

[Sujeet Indap]

Not so great in the first half of the year, in the first year in office, dealmaking has been pretty lethargic for a variety of reasons, not the least of which is the erratic posture of the Trump administration.

[Rob Armstrong]

Are you saying uncertainty is bad for business?

[Sujeet Indap]

For people who want to spend a lot of money on a big deal, it's the worst. So obviously, you know, we had all this back and forth on tariffs and what would tariffs be and Liberation Day and for multinationals, they couldn't plan their own Businesses, let alone figure out how much a multi billion dollar target would be worth. Then there's the Trump posture to deals himself. He has this habit in certain deals of inserting himself, and that's super complicated. And no director or board wants to get involved in the politics of Trump intervening in deals.

[Rob Armstrong]

I've heard a lot about the U.S. steel deal and that golden share. What happened there? And then how did Trump put himself in the middle?

[Sujeet Indap]

Sure. So this is a saga that's been going on for a couple of years. U.S. steel, obviously the national champion U.S. steel maker. Very iconic company in American industrial history. It's much smaller now and less relevant, but still a big employer, particularly in Pennsylvania. It's unionized.

[Rob Armstrong]

Important state.

[Sujeet Indap]

Yeah. And has signed up this deal during the Biden administration to be acquired by the. The Japanese company, Nippon Steel.

[Rob Armstrong]

Yes.

[Sujeet Indap]

And that was controversial. Biden at the end of his term essentially had blocked that deal deal from closing. And it seemed dead. It was nominally on national security grounds, but obviously there was a lot of politics around the steelworkers who weren't excited about being owned by a Japanese company. Trump comes in and it seems like it's dead. But in fact, nothing's dead with Trump. It's just a negotiation. And lo and behold, that deal eventually gets done a couple of months ago at the same price that was the original terms. Fascinating. Is a huge purchase price, $55 a share, like double the price of US steel when the deal was announced. I think the total value is like $14 billion. A huge blowout price. But there is a big caveat.

[Rob Armstrong]

Yeah. So that would seem great for Wall Street. Right. You have this big deal that was on the freeze going through. What did Trump actually do?

[Sujeet Indap]

Trump, slash. The Trump administration is literally going to be in the boardroom. They got this concept which is unusual in America. It's called a golden share. And this golden share, it has no economic value per se, but it allows the government board power and the ability to influence, if not direct, certain corporate actions around big events. Interesting. Whether it's like divestitures or layoffs or factories opening and closing, it's very, very unusual.

[Rob Armstrong]

It seems very antithetical to what we think Republican politics is.

[Sujeet Indap]

Yeah. The idea of picking winners and losers and sitting yourself into the private sector, it's basically unprecedented in America.

[Rob Armstrong]

Got it. So Wall street has been turned off by some of the uncertainty and then some of the actual actions of the Trump administration on some of these deals. Curious. I mean, what does regulatory team look like? Are they more lax? Are they more Pro banker. Like, who did he put in power to actually dictate this as opposed to who we had before, which was Lina Khan.

[Sujeet Indap]

Yeah. So it was Alina Khan at the FTC and Jonathan Kanter who headed the antitrust division of the Justice Department, which are the two main bodies that, like, oversee and approve M and A. So the team that Trump has brought in, both at the FTC and Department of justice, they've been a little bit of a wild card in that they are people who have been skeptical of tech, big tech. When I say wildcard, I just mean are they more permissive than Lina Khan and Jonathan Cantor? Absolutely. They're just a little bit quirky in how they feel about big, concentrated tech. So they have been a little bit less constructive than Wall street would have wanted, but they are definitely an improvement. I think Wall street feels like this is a set of people they can actually deal with, even if they're not perfect for them.

[Rob Armstrong]

Yeah. I mean, it seems like even though a lot of people in the Republican Party and in Wall street had been criticizing Lina Khan, there's actually a pretty vocal part of the Trump administration that's very pro, you know, regulating big tech and not allowing these consultants.

[Sujeet Indap]

Yeah, starting with J.D. vance.

[Rob Armstrong]

Exactly.

[Sujeet Indap]

Who himself had been at least moderately intrigued by Lina Khan's theories of corporate power. That's right.

[Rob Armstrong]

Yeah. So the first six months of this year have been slow on the M and A front. What's the outlook now? And as you're saying, what are those deals we should start to expect?

[Sujeet Indap]

There's definitely been a vibe shift in the last two weeks or a month, and Wall Street's now very excited about the back half of the year. And the reason is some of these wild cards are getting resolved. One, the big, beautiful bill has passed, and that enshrines a bunch of tax cuts, but more than anything, it's done. And. And there is some understanding of what the rules of the road, as far as, like, fiscal policy are going to be for the next several years. So that is a relief.

[Rob Armstrong]

Yeah. It gets rid of that uncertainty we named before.

[Sujeet Indap]

Yeah. And then we are now, like, more than three months past Liberation Day, and a bunch of these bilateral trade agreements, tariff agreements, are starting to get done. There's the Japan one.

[Rob Armstrong]

Yeah, we just got Japan yesterday.

[Sujeet Indap]

Yeah. I don't think Wall street and corporate America loves tariffs at all, but the terms seem to be more favorable than what they were maybe at the outset or believed to be at the outset. And two, it's just done so planning. Certainty is like the most important thing for these people, even if they don't like the actual underlying terms, they know what they are and they can go about with strategic planning. So those things plus the big tailwinds still exist, which are there's just a ton of debt and equity capital out there. And so there's financing for deals. Is it relatively expensive? Yes, but it's out there. It's not prohibitively expensive. And then two. And I think this is a really important point. I think about this a lot. Like if we think about companies, they have at all times strategic imperatives. They have how they want to grow, where they want to be in five years. There's these important technological changes, whether it's clean energy or AI that they want to invest in. And those never go away. And so there's always an appetite to make deals happen that help them reach those goals. It's just a question of whether the external environment will allow them to do those deals. So that pent up energy to pursue strategic goals and plans, those exist, they've never stopped existing. And you just need windows to get those done. And that window seems to be here now. Yeah.

[Rob Armstrong]

So less uncertainty now that you have some tariff deals starting to go through and the big budget bill being passed. And then you know that pent up energy is now meeting its moment. And as you said before, regulators that are okay with some of the things that are coming down the pipeline. So there are any deals that are like, as you said, pushing the envelope that we should be aware of?

[Sujeet Indap]

Yeah, we've been reporting on this and I think there's news on this today. There's a big railroad merger. When I say big, I mean the combined company is going to be worth, if it happens, $250 billion. The two companies are Union Pacific, a very historic grand railroad, and then it's looking to possibly combine with Norfolk Southern.

[Rob Armstrong]

This sounds very gilded age to me.

[Sujeet Indap]

It is very gilded age. I mean, where's Cornelius Vanderbilt and Jay Gould when you need them? So that is a really interesting transaction because there are basically what are called like six Class 1 railroads, which are the big railroads in America or in North America. There's two, some Canadian ones. Two Canadian ones too. And it was thought to be that you could not create consolidation between those. There's something called the Surface Transportation Board, which is the regulator of railroads.

[Rob Armstrong]

So they have their own special regulator?

[Sujeet Indap]

Yeah, their own special regulator. They have a relatively strict guideline on what conditions will allow for consolidation. The condition, as I recall, is something like it has to meaningfully enhance competition, which usually the opposite goal of M and A. But anyway, there are, you know, reasons why we should have a transcontinental railroad. The biggest one is there's this idea like Chicago's a big bottleneck. If you have cargo going cross country, it has to like change lines.

[Rob Armstrong]

I see. This is where like two railroads are.

[Sujeet Indap]

Yeah, they meet now Chicago's kind of like where they all meet. And so Union Pacific, the CEO of that company, has been saying, you know, that kind of interchange complexity is expensive. We're competing against truckers who don't face this. The market looks different than the regulators thought. And for that reason it might be time to create a transcontinental railroad.

[Kevin Rudd]

Wow.

[Sujeet Indap]

Like it's 1875. Make 1875 great again.

[Rob Armstrong]

Make it the 19th century one more time. Yeah, that's really interesting. So this is a deal that probably would not have gone through in the past couple of administrations.

[Sujeet Indap]

Yeah.

[Rob Armstrong]

But given this pent up energy over some genuine concerns they have about their competition and what they actually want to get out of a deal. Plus the moment now where we have less uncertainty and a potentially more pliant Trump administration is pushing forward this deal.

[Sujeet Indap]

Yeah, it's the kind of like really aggressive deal that you do when you have a ton of confidence. You can get it done with regulators and two investors will embrace it. They want growth, they're not in a defensive crouch. And yeah, it's just one of those things you see when people are feeling good and people are starting to feel good. We have a story in the FT this morning that Goldman Sachs is going to cancel a plan for a second round of layoffs this year. And that's because they've got deals to do.

[Rob Armstrong]

Yeah, those lucky bankers.

[Sujeet Indap]

And they need bankers, they need bodies to do them. And that's a pretty bullish sign.

[Rob Armstrong]

Yeah, absolutely. If you were planning to get rid of a part of your workforce and then no longer going to get rid of this workforce, not only is that a huge boost for morale, but it means that you're probably going to have deals getting done. So are there any other deals on the horizon that feel like they're going to get through in the next six months?

[Sujeet Indap]

Yeah, I mean the most intriguing situation M and a political nexus is this Paramount deal. So recall Paramount's the big Hollywood conglomerate. It's the CBS network, it's a bunch of cable stations, it's obviously the movie studio Paramount. They are set to be acquired by Redbird Capital and Skydance. Skydance is a small movie studio by David Ellison, right. Yes. Who's mostly famous for who his dad is.

[Rob Armstrong]

Yes.

[Sujeet Indap]

Which is Larry Ellison. And much of Larry Ellison's money, I think, is backing this deal. And so this deal was signed up. It's super complicated. The company is public. It's going to stay public. It has a large controlling shareholder, which is the Redstone family. Sharia Redstone is the matriarch of this company and the family. And for this deal, which has been signed. It was signed last year. For it to get done, it has to be approved by, among others, the fcc, the Federal Communications Commission. And that is something that's part of the Trump administration. And Trump has a problem with elements of Paramount, which are ongoing, most notably CBS and its television news magazine, 60 Minutes, which he had sued them over a segment. They had, an interview they had done with Kamala Harris that said there was this shady editing they had done.

[Rob Armstrong]

How did CBS respond to that accusation?

[Sujeet Indap]

Well, this led to ultimate, like, a negotiations, like the actual lawsuit most experts said was completely frivolous and ridiculous. And. But they settled the lawsuit. They did settle for, like, $16 million, although Trump was saying the other day it's more than that. But anyway, that lawsuit has been settled.

[Rob Armstrong]

Even though it was unlikely that Trump and his team would have been successful in the lawsuit.

[Sujeet Indap]

And not only that, the company, the family, are getting skewered not only broadly by, like, the public for seemingly caving when they're in, like, the news business and holding powerful people to account, but also their own employees. Stephen Colbert, Jon Stewart, South Park. Colbert, of course, has seen his show canceled.

[Rob Armstrong]

Yes.

[Sujeet Indap]

Company says it's for economic reasons, not his politics.

[Rob Armstrong]

But he very notably went on air just a few days before and lambasted this deal and lambasted what CBS was doing with the Trump administration.

[Sujeet Indap]

That's right. And, you know, this is a. This is a big M and a deal. The Trump administration, for better or worse, seems to be in the middle of it. The company management has responded in the way they have. They've upset much of their talent. The whole situation is pretty unprecedented. It will be one of the key artifacts of the second Trump time in office.

[Rob Armstrong]

Absolutely. Especially if it shows that this is the direction news media will have to go in to appease the president.

[Sujeet Indap]

Yeah. And if you've got business, you're a media conglomerate in front of the Trump administration. How do you cover him and how do you do your job? It's a tricky situation for all.

[Rob Armstrong]

Well, today I'm very grateful that the FT is a British company owned by a Japanese company. Owned by a Japanese company. So let's take a step back. We've talked about a couple of deals. We've talked about slow M and A leading to now some more optimism. Where are we right now? Right. Is this the pivot point or just the start of more disappointment?

[Sujeet Indap]

I think we're back to where we were right after the election. The idea that there is going to be this release of animal spirits and there's going to be really, really healthy M and A and IPO volumes. Maybe not gangbusters, but really, really good. And so all these bankers who have been nervous either about their jobs or their bonuses suddenly are getting called back to work and are going to be pitching like crazy. And a bunch of these deals that are being pitched are actually going to be announced because again, companies have strategic imperatives. The world is changing. Companies have to keep up, and now is the time to do it.

[Rob Armstrong]

But of course, overhanging all that is what the Trump administration will do on each and every one of these deals.

[Sujeet Indap]

Yeah, you can't get in the middle of every deal. You just don't know which deals will catches interest.

[Rob Armstrong]

Awesome. Well, on that very optimistic note, we'll be back with long and short.

[Kevin Rudd]

The idea of having engagement, which was the phrase that we used in the beginning of the century, is long past. What people think of now is what Ambassador Kevin Rudd has called managed competition. The competition will be intense. The question is, can we manage it so that it doesn't get out of hand?

[Unknown]

To learn more about the intersection of.

[Sujeet Indap]

Geoeconomics and Investing, subscribe to PJIM's the Outthinking Investor. What is long and short?

[Rob Armstrong]

So long and short is a part of the show where we go long something we like and short something we don't like. It doesn't actually have to be a stock. It can be absolutely anything. I've gone long sweaters in Stoneford.

[Sujeet Indap]

I'm going to go long. The thing I was doing this weekend, which was watching the British Open golf tournament, the Open Championship in Northern Ireland, Scotty Scheffler is the most dominant golfer since Tiger Woods. Perhaps a surprise, but it's amazing to watch as a golfer. I'm going to go long Scottie Scheffler.

[Rob Armstrong]

Long Scotty Shuffler, the new Tiger Woods.

[Sujeet Indap]

It seems like a. Yes.

[Rob Armstrong]

Awesome. Well, I am short Japan. Not that I'm against Japan. Seems like a lovely nation, but I think that people are a little overexcited about the deal they just got with the Trump administration. While it's great that they now have clarity about where tariffs are, and they're lower than they otherwise would have been. Japan is facing a ton of macroeconomic headwinds, including rising inflation, rising rice prices in particular, and, you know, a bunch of questions about labor and the future of demand. So while it's definitely a good thing for the Japanese economy that they got something of a deal, it doesn't save them from some bigger questions they have to face. Sujeet, thanks so much for joining me and listeners. We'll be back in your feed next week. On Hedge is produced by Jake Harper and edited by Bryant Urstadt. Our Executive producer is Jacob Goldstein. We had additional help from Topher Forhouse. Cheryl Brumley is the FT's global head of Audio. Special thanks to Laura Clark, Alistair Macki, Greta Cohn and Natalie Sadler. FT Premium subscribers can get the Unhedged newsletter for free. A 30 day free trial is available to everyone else. Just go to ft.com unhedged offer. That's ft.com unhedgedoffer I'm Aiden Reiter. Thanks for listening.

[Unknown]

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