Big Industry Consolidation Coming Down The Pike

June 15, 5:00 pm EST

The big approval on the AT&T takeover of Time Warner has opened the door to big industry consolidation coming down the pike.

When Trump won the election in November of 2016, by December, the billionaire Japanese business man Masayoshi Son was meeting with the President-elect in Trump Towers.  Son owns more than 80% of Sprint and was wanting to merge with TMobile to challenge the duopoly in the wireless carrier industry (AT&T and Verizon).  The prospects of this deal (a merger) were killed by the Obama administration, as antitrust enforcers warned it would put the dominance of the wireless industry in too few hands (from four to three) – making it less competitive.  That deal had new prospects with Trump.  So Son got on a plane.

He clearly knew the Trump administration was going to be very pro-business.  And the likelihood of getting a deal blessed under Trump’s watch (relative the outgoing administration) improved dramatically on election day.Indeed, deal making is hot under Trump.  Last year, there were over 18,000 merger and acquisition transaction in North America — the highest on record.  This year, a little less than half way through the year, and we’ve had a little less than half the volume of last year.  And Son’s deal with TMobile is now in the queue for FCC approval.

And of course, we now have the 21st Century Fox bidding war.  The company had already agreed to sell (most of) itself to Disney.  But when the AT&T deal was approved, Comcast stepped in an upped the ante.  All of these deals have everything to do with keeping their footing in the “Information Revolution.”  If not, they get made irrelevant by the tech giants.  They are fighting to maintain their moat on internet infrastructure, but they are also fighting to keep their dominant position in content, while going head-to-head with the new players, in taking that content direct-to-consumers.

Meanwhile, the market seems to be pricing in future dominance and monopolies in the FAANG stocks.  These deals are making that less likely.
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