Interest Rates Aren’t the Only Challenge for the Next Big Merger: The Government Wants a Say, Too | Video

TheGrill 2023: “If you want to do a deal, maybe the next administration will be more relaxed,” Ed King, partner at BTIG investment firm, says

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While the business world’s movers and shakers continue to navigate a new normal defined by high interest rates and constant disruption, another challenge has emerged — one that is a little more political.

Speaking as part of TheWrap’s annual industry conference, TheGrill, Guggenheim Securities senior managing director Ethan Sawyer argued that one of the biggest issues in the macro-environment isn’t economic, but regulatory.

“Even if you have confidence that your deal makes strategic sense and should pass any trust muster, you look at some of the deals that are being held up,” Sawyer said, speaking on the panel “Acquire or Be Acquired: Navigating the Complexities of M&A.” “It still may take you a year or two to get it done.”

Moderated by Creative Media chairman Peter Csathy, panelists at the Wednesday event also included Charles Johnson, Truist managing director; Ed King, BTIG partner; Jason Sklar, Shamrock Capital partner; Oliver Chastan, Iconoclast founder and CEO; and Stephanie Horbaczewski, Vody CEO and founder.

Sawyer noted that for him, “M&A is a tactic, not a strategy.” However, he said that the approach from the current federal government under President Joe Biden “feels like the approach from an antitrust perspective right now” and “is different than it’s been historically.”

“They’re willing to look very closely at transactions and take it from a different, almost more European-type lens,” he said.

The Biden administration has adopted a more aggressive regulatory approach, especially compared to the previous administration. As outlined in a July 2021 executive order, Biden instructed relevant agencies to increase enforcement to prevent a rise in consumer prices and competitive harm in labor markets. Via what the order called a “whole-of-government competition policy,” it charged over a dozen other agencies to protect competition.

All parties Wednesday discussed the surprising delays in attempts by Microsoft to acquire Activision, a deal first announced in January 2022 that has yet to be finalized. There were attempts by the FTC to block the $69 billion deal, but the Supreme Court ruled against those efforts in July. That deal, which is still expected to occur, has faced regulatory challenges in both the U.S. and the U.K.

“That’s a multi-trillion dollar company that has a huge amount of cash and can afford to wait,” Sawyer said. “That transaction has just taken much, much longer than most people expected to go through.”

King argued that anti-trust conflicts are a byproduct of trying to get a deal done.

“If you want to do a deal, maybe the next administration will be more relaxed,” he suggested.

Watch the full panel in the video below.

About TheGrill: For more than a decade, TheGrill event series has led the conversation on the convergence of entertainment, media and technology, bringing together newsmakers to debate the challenges of and opportunities for making content in the digital age. TheGrill delivers a unique series of curated discussions, industry panels and networking activations that explore the ever-changing media landscape.

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