Insider Finance - Business - Insider Today: M&A tidal wave incoming

December 6, 2023 • 6 min read

with Dan DeFrancesco

Halfway to the weekend! A new (sort of) candidate has entered the debate over the top holiday song. Brenda Lee’s “Rockin’ Around the Christmas Tree” hit Billboard’s Hot 100 singles chart for the first time in its 65-year existence. Could this be the beginning of the end for Mariah Carey’s ubiquitous “All I Want for Christmas Is You”?

In today’s big story, we’re looking at why corporate America isn’t afraid of the Biden administration’s anti-trust stance anymore and how that’s leading to a wave of M&A.

What’s on deck:

But first, let’s make a (big) deal.

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The big story

Ain’t no stopping M&A

Big deals are coming. And companies are betting there’s nothing anyone — including the highest office in the land — can do to stop them. 

Shortly after US President Joe Biden took office in 2021, he looked to make good on his promise of scrutinizing corporate dealmaking, particularly in Big Tech. 

But as he enters the final year of his initial term, the floodgates for big M&A deals have opened, writes Business Insider’s Matt Fox.

The strict anti-trust stance of Biden and Lina Khan, the Federal Trade Commission chief he appointed, hasn’t stopped a wave of deal announcements since September that total more than $170 billion.

A key turning point was Khan’s failure to stop Microsoft’s $69 billion bid to buy Activision Blizzard. 

Like the first one to take a dip at a pool party, a court ruling in favor of Microsoft and against the FTC in July was a signal for companies and their bankers to join the fun.

Now everyone from Cisco to Exxon Mobil is getting in on the action with pricey transactions of their own. Even Warren Buffett is reportedly considering helping to finance a high-profile deal in the energy space. 

But the starkest example of how bold dealmakers have gotten is a potential tie-up between giant health insurers Cigna and Humana, Matt writes. The deal is a longshot to get approved, but the fact both sides are even trying shows corporate America’s ambivalent views toward the Biden administration’s anti-trust agenda.

Michael M. Santiago/Getty Images

The recent dealmaking spree is likely only the tip of the iceberg. 

Wedbush analyst Dan Ives told Matt, “there’s going to be a tidal wave of M&A ahead,” now that fear over Khan and the FTC squashing deals has mostly subsided. 

The revelation comes at a perfect time for the industry. Bankers have been desperate to get the M&A market going after an elongated drought. 

That, coupled with the market predicting significant cuts to interest rates next year, means things could ramp up quickly. 

And rest assured, bankers aren’t interested in nickel-and-dime type deals. Earlier this year, Goldman Sachs was reportedly targeting mega deals — those over $10 billion — as a way to get back on track.  

But it’s not just the size of deals that’ll be worth watching. There could be some interesting tie-ups between large incumbents and the startups that initially set out to disrupt them.

With VC money drying up and an unwelcoming IPO market, late-stage companies might look to be acquired by the companies they once looked to topple.

3 things in

Markets

🔔 Before the opening bell: US stock futures rise early Wednesday, with major indexes on track to end the quarter with big gains

Brooks Kraft LLC/Corbis via Getty Images

1. Hedge and mutual funds are buying these stocks by the boatload. Goldman Sachs analyzed more than 1,200 funds to find the stocks both mutual funds and hedge funds are betting on. These 10 stocks, from Mastercard to Uber, are some of their favorites.

2. Reading between the lines of what central bankers are saying about rate cuts. The biggest question in the market is when the Fed will start cutting interest rates, with many expecting it to start early next year. These seven quotes from central bankers provide some clues.

3. These predictions probably won’t happen... but it’d be wild if they did. RFJ Jr. wins the US presidential election. McDonald’s stock skyrockets as Ozempic encourages unhealthy habits. Saxo Bank’s annual list of outrageous but underappreciated scenarios that would upend markets outlines fascinating “What ifs?”

3 things in

Tech

L Brian Stauffer/University of Illinois; iStock; Rebecca Zisser/BI

1. America’s smartest AI optimist. It’s not Sam Altman, Satya Nadella, or any of the other big names you associate with AI. Instead, our greatest AI visionary is an English professor in Illinois named Ted Underwood. He’s convinced that AI will help us all think more deeply and help scholars uncover exciting new truths.

2. Leaked email: Microsoft is shaking up its security organization. The giant has named a new chief information security officer, according to an internal email. Bridgewater’s former chief technology officer Igor Tsyganskiy will start his new role on January 1.

3. The mini wave of Amazon employees quitting right now. Leaked internal messages showed that they cited issues like the strict RTO mandate, layoffs, and “lack of respect.” One former employee even publicly shared that “the sheer number of AWS resignations in the last week is stunning.”

3 things in

Business

Karwai Tang/WireImage; Getty; Compass; Insider

1. The previously unreported Seattle properties of Jeff Bezos. He injected some serious cash into Seattle’s real estate market. But now that he’s moving to Miami with fianceé Lauren Sanchez, he leaves behind a mini-empire of eight homes in ritzy Seattle suburbs.

2. Business Insider’s fourth cohort of emerging commercial and residential real estate talent. The 20 professionals — all 35-years-old or younger — are making waves across a vast industry. The list of rising stars includes talent from firms like Cushman & Wakefield to startups rethinking old norms.

3. How Mark Cuban forced the biggest US pharmacy to upend its business. CVS just announced a change to how prescription drugs get priced at pharmacies. It has been facing market pressure from new models like Cuban’s Cost Plus Drugs.

In other news

What's happening today

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The Insider Today team

Dan DeFrancesco, senior editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York City.

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insidertoday@insider.com

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