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Lina Khan
Wall Street Giddy Over Coming Merger Boom as Trump Expected to Fire Lina Khan
One corporate CEO welcomed the Republican's victory as "an opportunity for consolidation."
Nov 08, 2024
Wall Street is "foaming at the mouth," as one leading business magazine put it, at the prospect of a corporate merger frenzy following Republican Donald Trump's victory in the 2024 presidential election—a win that's set to spell the end of antitrust champion Lina Khan's popular tenure at the helm of the Federal Trade Commission.
Trump's second administration, which is likely to be stacked with billionaires and corporate-friendly officials, is expected to take aim at merger and acquisition guidelines issued last year by Khan's FTC and the U.S. Department of Justice after decades of relentless corporate consolidation.
David Kostin, chief U.S. equity strategist at the Wall Street behemoth Goldman Sachs, predicted in a note published Wednesday that under Trump's incoming administration, "the regulatory posture of the Federal Trade Commission and the Department of Justice Antitrust Division that during the past four years challenged many proposed business combinations will likely be more relaxed."
That more relaxed posture, according to Kostin, could result in a 20% increase in merger activity in just the first year of Trump's second term.
Raul Gutierrez, the head of mergers and acquisitions at the investment banking firm Truist Securities, echoed Kostin's assessment, tellingBloomberg that "you should be able to see larger transactions move forward" under the incoming Trump administration.
"Some of these had been put on hold given the current antitrust stance," said Gutierrez, "and I think you'll see a greater willingness to test agencies out once the administration takes over."
Khan's term officially expired in late September, but she's expected to stay on at the FTC until Trump is inaugurated in January and chooses a replacement. While Vice President-elect JD Vance has praised Khan, "Trump and his allies are likely to get rid of anyone associated with the Biden administration's antitrust battles with the big Silicon Valley tech companies," The New York Timesreported earlier this week.
Tesla CEO Elon Musk, who pumped upward of $118 million into Trump reelection efforts, wrote days before the November 5 election that Khan "will be fired soon."
According to the FTC's latest data, the Biden administration brought a record number of merger enforcement actions in fiscal year 2022. A recent analysis by the American Economic Liberties Project found that the Biden administration "brought to trial four times as many billion-dollar merger challenges as Trump-Pence or Obama-Biden enforcers did."
Under Khan's leadership, the FTC has taken legal action against some of the most powerful companies in the world, including Amazon and Microsoft.
But Trump's election victory has sparked hopes on Wall Street that aggressive merger enforcement could soon end.
"We think that under a Trump administration, deal approvals will speed up markedly and the process will be more clearly delineated," Mark Fitzgibbon, managing director of the banking company Piper Sandler, wrote in a research note.
David Zaslav, the CEO of Warner Bros. Discovery, hailed Trump's victory as "an opportunity for consolidation."
Kroger, a company that is currently locked in a legal battle with the Khan-led FTC over its attempt to acquire competitor Albertsons, saw its stock price jump in the wake of Trump's election victory, with investors anticipating "a more lax environment for corporate mergers" under the Republican, Barron'sreported.
Axiosreported Friday that "the $35 billion credit card merger of Capital One and Discover will be a bellwether for how Trump's antitrust crew views the M&A environment."
"Shares of each company rose 15% after his election," the outlet observed, adding that shares of the airline companies Frontier and Spirit also surged in a "sign their previous attempt at a merger could be revived."
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Billionaire Trump Supporter Elon Musk Calls for Firing of FTC Chair Lina Khan
"How do we know that Lina Khan has done an excellent job as FTC chair? Because billionaires and business leaders want her gone."
Nov 01, 2024
The world's richest man on Thursday joined the billionaire chorus calling for the firing of Federal Trade Commission chair Lina Khan, a consumer and antitrust champion whose aggressive actions against corporate consolidation have made her a target of prominent executives and Republicans in Congress.
"She will be fired soon," Elon Musk, a billionaire supporter of Republican nominee Donald Trump, wrote on his social media platform in response to a GOP-led House Oversight Committee report accusing Khan of abusing her authority to "launch an intimidation campaign to chill mergers of all kinds."
Democrats on the committee said the GOP report is "riddled with misinterpretations, mistruths, and cherry-picked experts" attempting to discredit Khan's "work taking down greedy monopolies, lowering drug and food prices for Americans, and ensuring scammers don't prey on our most vulnerable neighbors—a pro-consumer agenda celebrated even by Republicans."
One of the Republicans who has praised Khan is Trump's running mate, Sen. JD Vance (R-Ohio), who said in August that the FTC chair has "been very smart about trying to go after some of these big tech companies that monopolize what we're allowed to say in our own country."
Under Khan's leadership, the FTC has filed suit against Meta, Amazon, and Microsoft and has taken concrete action to fix problems that Trump has claimed to want to solve.
American Economic Liberties Project (AELP), an anti-monopoly advocacy group that has celebrated Khan's work, said Thursday that Musk—who has spent at least $118 million supporting Trump's presidential campaign—"joins a long list of oligarchs who want [the FTC chair] fired for using her office to serve the public, not the rich and well-connected."
In a report released earlier this week, AELP noted that thanks in significant part to Khan's FTC, the Biden-Harris administration has "brought to trial four times as many billion-dollar merger challenges as Trump-Pence or Obama-Biden enforcers did."
"The durability of this progress depends on executive branch commitment—especially in the face of deep-pocketed lawbreakers fixated on kneecapping antitrust law enforcement through constitutional challenges and personnel changes," said Laurel Kilgour, AELP's research manager.
Khan's term officially expired at the end of September, but she is set to stay in her position indefinitely until the winner of next week's presidential election decides whether to keep or replace her.
Vice President Kamala Harris, the Democratic nominee, has been quiet about whether she would retain Khan as some of her billionaire donors—including LinkedIn co-founder Reid Hoffman and investor Mark Cuban—have called for the FTC chair's removal.
"How do we know that Lina Khan has done an excellent job as FTC chair? Because billionaires and business leaders want her gone," former U.S. Labor Secretary Robert Reich wrote Thursday in response to Musk, whom Trump has pledged to put in charge of a "government efficiency" commission tasked with identifying regulations and spending to slash.
"She's been an avid anti-trust enforcer and defender of working people," Reich added of Khan. "She's also been an oligarch's worst nightmare."
NBC Newsreported Thursday that progressives are gearing up for a fight to keep Khan in place as FTC chair if Harris defeats Trump on November 5.
"If Vice President Harris wins, her decision whether to replace Lina Khan and other enforcement officials will be the first big test of whether she wants to preserve the broad coalition built by the Biden-Harris administration, or whether she'll choose ongoing conflict with progressives instead," Dan Geldon, a consultant and former chief of staff to Sen. Elizabeth Warren (D-Mass.), told NBC.
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67% of Swing State Voters Think Corporate Power 'One of the Biggest Problems Facing America'
"Strong antitrust enforcement is not just good policy; it's also good politics," said the president of the American Antitrust Institute.
Oct 22, 2024
A survey released just over two weeks before the 2024 election found that a majority of U.S. voters in critical swing states agree that excessive corporate power is one of the nation's largest problems and favor robust enforcement action, a signal that the presidential candidate who takes the strongest position against monopolistic abuses could see a boost at the polls on November 5.
The survey, conducted by Lake Research Partners in partnership with the American Antitrust Institute (AAI) and the Committee to Support the Antitrust Laws (COSAL), found that 67% of likely general election voters in Arizona, Georgia, Michigan, Nevada, North Carolina, Ohio, Pennsylvania, and Wisconsin agree with the statement that "one of the biggest problems facing America today is that a handful of corporations have too much power and government is going too little to hold them accountable."
Additionally, 56% of voters in those battleground states said they would be much or somewhat more likely to vote for a candidate who "supported tougher government enforcement of antitrust laws to combat corporate monopolies."
The poll, published Monday, was conducted October 10-14 and has a sample size of 600, with a margin of error of +/- four percentage points.
"This poll shows that voters understand that big corporations that abuse their market power are harming the quality of life for the rest of us and we need to do more to hold them accountable," said Pamela Gilbert, COSAL's legislative counsel. "Public officials should pay attention and do more to strengthen public and private antitrust enforcement."
Randy Stutz, president of AAI, said the findings underscore that "strong antitrust enforcement is not just good policy; it's also good politics, whether you're a Democratic or a Republican."
The survey was released as Federal Trade Commission (FTC) Chairwoman Lina Khan—an antitrust trailblazer who has aggressively fought corporate consolidation and anti-consumer abuses since taking on her role—faced vocal criticism from billionaire supporters of Democratic nominee Kamala Harris, including investor Mark Cuban and LinkedIn founder Reid Hoffman.
Pointing to the newly released survey, The Lever's David Sirota wrote late Monday that "here's some empirical evidence that lots of swing voters might feel better about voting for Kamala Harris if she publicly rejects her billionaire donors' demand that she get rid of Lina Khan at FTC."
Harris, who has ties to Big Tech, has not yet said whether she intends to keep Khan as chair of the FTC if she defeats Republican nominee Donald Trump in next month's election.
A Trump victory would most likely spell an end to Khan's tenure as head of the agency, despite the bipartisan popularity of the kind of forceful antitrust action she has taken.
Neither Harris nor Trump has laid out a detailed antitrust agenda, but the Democratic vice president has vowed to take on corporate price gouging and backed legislation that would make algorithmic price-fixing in the U.S. rental housing market illegal under antitrust law.
Trump, for his part, doesn't mention antitrust in his campaign platform, and the former president recently signaled opposition to breaking up Google—a path the U.S. Justice Department is currently considering.
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