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Eric Cantor, vice president of M&A advisory firm Moelis & Co. (MC), expects deals to rebound this year after falling in 2022 due to challenging credit markets, stock market volatility and rising of interest rates.
“We’re going to see real pent-up demand for M&A in 2023 given where we are and where we’ve come from,” Cantor, the former House Majority Leader, said in an interview with CNBC on Friday.
“What we’re seeing at Moelis is increased activity on the dialogue front because when you have this kind of volatility, people want to start rethinking their competitive positioning, where the opportunities are at a time like this,” Cantor explained. .
Cantor hopes that increased activism, as seen this week with the efforts of billionaire Nelson Peltz at Disney (DIS), could lead to more deals and divestments.
“There is increased activity on the advocacy side and that can lead to mergers and acquisitions,” the former Republican congressman from Virginia told the business network. “It can produce sales of parts of companies.”
He added that private equity firms are also talking about buying more companies with the trillions in dry power they have left over from doing business.
“There’s a lot of dialogue from the sponsorship community about privateers,” Cantor said.
Cantor explained that the Biden administration’s focus on antitrust and the efforts of regulatory agencies to sue to block several high-profile deals have companies recalculating how long a deal might take.
“When you think you have a high-profile transaction, everybody has to reset the expectation of how long it’s going to take, how much effort it’s going to take,” Cantor said.
“I just think the position this administration is taking in trying to change the antitrust standard is beyond the law,” Cantor added. “I think it’s very destructive to our country’s competitiveness.”
Cantor singled out Massachusetts Democrat Elizabeth Warren for her efforts to try to thwart some deals. Just this week, Warren sent a letter to the Federal Communications Commission asking the agency to block Standard General’s planned purchase of Tegna Inc. (TGNA).
Standard General on Friday sent a letter to Warren about the Tegna deal, requesting a meeting with her.
