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Shares of US Steel have not reached the $55 that Nippon Steel offered to acquire the company in December 2023, in a cross-border tie that has raised eyebrows among politicians and steelworkers alike. This week they are trading around $32. So logically, the decision of outgoing President Joe Biden squash the deal for national security reasons is already old news.
But there is something new, too: the scramble to understand the rules of how to combine and acquire. Many business advisers expected 2025 to be a relative fiesta, helped by Donald Trump's pro-business presidency. The truth may be more complicated.
So far, the indications are that big is no longer a bad thing, per se. The Biden administration has made no secret of its skepticism about companies that dominate their space, such as Amazon. Red tape is rampant: in recent years, US deals worth more than $10 billion have taken twice as long to close as they did a decade ago, according to Goldman Sachs.
The Trump administration may see a shift back to a simplistic approach to antitrust, focusing on traditional notions of consumer welfare — and paying less attention to things like labor competition or the impact on other stakeholders. Bank of America chief Brian Moynihan and Goldman Sachs chief David Solomon both predicted a more friendly M&A market in 2025 thanks to the new occupant of the White House.
But if marketing power isn't criminal, external presence might be. Both Biden and Trump were against Nippon's takeover of US Steel. It's not clear whether that made sense: the Japanese company offered all kinds of concessions, including nearly $100 million in bonuses for American workers and keeping the company's headquarters in Pittsburgh. Life is not easy for a steelworker.
If Trump is suspicious of taking things with foreign buyers, that logic is unlikely to apply on domestic soil. Putting America first is difficult to do without growing – or keeping – big companies like Google parent Alphabet, chipmaker Nvidia or mega-bank JPMorgan that can kick the sand in the face of foreign countries. That's hard to do while maintaining the opposite view of the home company's wrath.
The main test will be the technical section. Personnel changes at the top administration — hawkish academic Lina Khan as head of the Federal Trade Commission, for example — suggest a softer but rarer approach. New brooms can be quickly put through their paces: the so-called Magnificent Seven, which includes Apple, Microsoft and Facebook owner Meta Platform, have $530 billion of money burning a hole through their balance sheet.
Meanwhile, US Steel could be a test of what happens to the losers. Local rival Cleveland-Cliffs had previously expressed interest in a local M&A solution. Trump has suggested he could protect the company in other ways, using tariffs and tariffs—interventions that make the merger calculation more slippery. Dealmaking is happening every year in 2025 but it doesn't necessarily get any easier.