Economic Reality and Antitrust Theory Paralyze M&A
Dealmakers need to have a handle on today and optimism about tomorrow. Right now they have neither.
The UK antitrust authority’s decision to block Microsoft’s acquisition of Activision rattled several deals.
Photographer: Michael Ciaglo/Bloomberg
The confidence needed to attempt a corporate merger is unusual. It requires, in the buyer’s mind at least, the interlinked beliefs that current conditions are comprehensible and that future ones will improve. It is hard to be sure about either at the moment.
The question of current certainty is, of course, a relative one; there is always change, and M&A activity hardly flinched though big events of recent years — political tension, a global pandemic and wars. The difference now is that regulation and financing are both in flux, too.