Foley & Lardner LLP partner Louis Lehot described the current M&A environment under the new presidential administration in Mergermarket and Crunchbase News.
Highlighting in Mergermarket a recent suit brought by the U.S. Department of Justice to block a proposed acquisition over competition concerns, Lehot said the move was particularly surprising given the two involved technology companies are not especially active in the same sector, and because one of the companies is a much smaller competitor than other players in the industry.
“The big deals that we do see happen will have compelling reasons to do it despite the uncertainty,” Lehot noted.
Speaking to Crunchbase News, Lehot commented that while M&A in general has begun to revert to historic norms, this has not been the case in the technology sector due to the federal government’s recent regulatory posture. Pointing to recent dealmaking by venture-backed startups, he said that overall dealmaking in the space is likely due to investors consolidating their portfolios as more successful startups are buying ones with few options amid hard-to-find venture funding given the overall technology M&A environment.
Lehot added that the present pulse of the M&A market is difficult to read, noting the change in presidential administration and resulting priority shifts at the Federal Trade Commission and U.S. Department of Justice.
“I think by the second half of the year, we should know where we stand,” he concluded.