Podcast Summary

WSJ What’s News

Episode: The U.S. Is in Its Big M&A Era. Will It Last?
Date: August 17, 2025
Host: Alex Osola
Guest: Lauren Thomas, WSJ Lead Deals Reporter

Episode Overview

This episode dives into the current surge in U.S. mergers and acquisitions—an unusually hot M&A season across industries such as rail, finance, tech, entertainment, and consumer goods. Alex Osola and Lauren Thomas discuss the forces fueling this deal-making boom, whether the trend could continue, and what challenges might arise, especially as antitrust scrutiny and political climates shift under the Trump administration.

Key Discussion Points & Insights

1. The Current Wave of U.S. Mega-Mergers

(00:25–02:07)

• Noteworthy Recent Deals:
  • Union Pacific acquires Norfolk Southern—first coast-to-coast U.S. rail operator ($70B)
  • Capital One buys Discover ($35B)
  • Paramount acquires Skydance Media ($8B)
  • Ferrero (Nutella) acquires W.K. Kellogg ($3B)
  • Google’s Alphabet moves to buy cybersecurity startup Wiz ($32B)
• Lauren’s Take:
  “Deals are back. ... Companies have gotten to a point where they’re comfortable enough under Trump and have settled into this ‘new normal’... CEOs don’t want to sit on the sidelines any longer.” (02:07)

2. Why Companies are Pursuing M&A

(02:45–03:56)

• Growth or Defense?
  • Strategies differ by industry:
    • Consumer Retail: Facing slower growth, turning to selling business units or breakups for value (Kraft Heinz, Kinview)
    • Tech: Driven by surplus cash and relentless focus on expansion; “growth, growth, growth”
  • Lauren Thomas:
    "If you’re in consumer retail, maybe you're looking to pursue M&A … as a way to find growth versus tech, it's just growth, growth, growth.” (03:13)

3. The Contradiction—Mergers vs. Breakups

(03:56–05:11)

• Why Break Up?
  • Companies may get too big, with some divisions undervalued within larger entities.
    • Example: Honeywell spinning off its aerospace & defense business due to activist investor pressure and valuation concerns.
  • Lauren Thomas:
    "Over time, you can just look at Wall Street and it is very cyclical ... They reach a moment when they're too big ... pieces of the business are worth more if they were separated...” (04:27)

4. Antitrust Enforcement & the Trump Administration

(05:11–07:23)

• Big Tech Under Scrutiny:
  • Google faces a federal antitrust case while still pursuing major acquisitions.
  • Under Trump, there’s a warmer relationship between tech CEOs and regulators.
    • Lauren Thomas:
      “Mark Zuckerberg, for example, has been spending more time with Trump… whereas under the Biden administration you had Lina Khan and the FTC was very anti big tech.” (06:02)
• Policy Approach:
  • Current administration is more lenient, open to remedies (e.g., allowing deals if overlapping assets are divested).
    • Lauren Thomas:
      “The Trump administration is much more open to remedies. … you need to sell off this little piece of your business. ...There is a general understanding that the Trump administration is much more in favor of letting deals work their way through...” (06:51)

5. Are We in a “Big Company Era”?

(07:51–08:51)

• Industries Consolidating:
  • Especially in tech, scale is essential for efficiency and survival.
  • Companies like Intel cited as potential M&A targets due to lagging performance.
    • Lauren Thomas:
      "...companies do face this moment of reckoning. Either we join forces ... or you risk falling behind.” (08:13)

6. The Logistics & Risks of Mega-Mergers

(08:51–09:38)

• Integration Challenges:
  • Mergers may flop due to complex logistics (board/CEO structure, company culture, naming).
  • Lauren Thomas:
    “Getting the deal across the finish line... that’s like day one of navigating that whole process.” (09:30)

7. The Evolving Fate of Startups: To IPO or Be Acquired?

(09:38–10:49)

• Acquisition as a Goal:
  • Many founders eye acquisition rather than an IPO, although exceptions like Figma exist (blocked Adobe deal, successful IPO).
    • Lauren Thomas:
      “That IPO route will still be there for some, but ... it’s very hard nowadays to achieve a scale like Figma did.” (10:31)

8. M&A and IPO Activity—Cyclical Relationship

(10:49–11:41)

• Typically, IPO waves precede M&A surges.
• The post-pandemic IPO glut of 2021 disrupted that order—many IPOs faltered, which shifted momentum to M&A.
  • Lauren Thomas:
    “…first you’ll see the wave of IPOs, then you’ll see the wave of deals. It’s almost been reversed [lately].” (11:14)

9. Will This M&A Frenzy Continue?

(11:41–12:41)

• Current sentiment is bullish:
  • Even during “dog days” of summer, bankers and lawyers remain busy.
  • Market participants expect heavy deal flow to continue post-Labor Day, partly driven by the incentives of deal professionals.
    • Lauren Thomas:
      “...get ready, because after Labor Day, the expectation is it's going to be pretty busy.” (12:24)

10. Potential Obstacles Ahead

(12:41–13:26)

• Political Unpredictability:
  • Cautions remain due to the volatile nature of the Trump administration.
  • Case study: Verizon’s acquisition of Frontier required major policy concessions (rewriting DEI policies) before closing.
    • Lauren Thomas:
      “I think we've entered this new era ... different players in Washington … it could change on a dime.” (13:13)

Notable Quotes & Memorable Moments

• “Deals are back.… CEOs don't want to sit on the sidelines any longer.”

  • Lauren Thomas (02:07)

• “Over time ... you'll see a company buy up smaller companies for years ... then they reach a moment when they're too big ... and suddenly pieces of the business are worth more ... if they were separated.”

  • Lauren Thomas (04:27)

• “The Trump administration is much more open to remedies. ...There is a general understanding that the Trump administration is much more in favor of letting deals work their way through the system.”

  • Lauren Thomas (06:51)

• “There have been certainly situations in which there's been a big merger and it totally flops. Integration is really tough.”

  • Lauren Thomas (09:01)

• “Even if it’s August, the expectations are high… after Labor Day, the expectation is it’s going to be pretty busy.”

  • Lauren Thomas (12:24)

• “Big grain of salt ... it is still the Trump administration. ...It could change on a dime.”

  • Lauren Thomas (12:45; 13:13)

Important Segment Timestamps

• 00:25 – Episode opening, introduction of M&A trend
• 02:07 – Lauren Thomas: “Deals are back.”
• 03:13 – Industry differences: Growth vs defense in M&A strategy
• 04:27 – M&A vs. Breakups: Wall Street’s cycles explained
• 06:02 – Comparison of antitrust enforcement under Trump vs. Biden
• 06:51 – “Trump admin is much more open to remedies”
• 08:13 – Why bigness now matters in tech and beyond
• 09:01 – The real challenges post-merger: Integration
• 10:31 – Startups: IPO vs acquisition decisions
• 11:14 – IPOs and M&A: Shifting cycles
• 12:24 – M&A activity expected to stay strong post-summer
• 13:13 – Political unpredictability as a key risk

Tone & Takeaways

• Tone: Insightful, fast-paced, and realistic about both the excitement and risks in today's “big company era.”
• Main Insight: U.S. dealmaking is surging—and while there’s strong momentum and regulatory openness, risks related to scale, integration, and political volatility remain ever-present.
• For Listeners: The episode provides a sweeping view of why the country is seeing so many mega-mergers, the shifting rules of the road for getting deals done, and the possible roadblocks that could end this “M&A era” as quickly as it began.