while donald trump <u+2019>s surprise victory over hillary clinton could temporarily trip up the surging mergers-and-acquisitions market, the businessman<u+2019>s election may ultimately spark an acceleration in deal-making, bankers and lawyers said wednesday. companies are likely to hold off on striking big combinations as they size up the new president and his policies, according to a number of deal advisers. <u+201c>i think in the short term it injects a fair amount of uncertainty in the markets,<u+00a0>as participants and ceos all anticipated a clinton victory,<u+201d> said robert townsend, co-head of the global m&a group at law firm morrison & foerster llp. <u+201c>as people go through that exercise of ascertaining what the election results mean for the larger economy and their particular businesses, they will presumably slow down on some of the m&a and strategic plans they had in place.<u+201d> in the past few weeks, as polls indicated mrs. clinton was the front-runner, companies struck megadeals at a clip reminiscent of the record pace in 2015. at&t inc. inked the biggest takeover of the year when it agreed to buy time warner inc. for $85 billion. in the following weeks, general electric co. struck a deal to acquire baker hughes inc. for as much as $30 billion, while centurylink inc. agreed to purchase level 3 communications inc. for about $25 billion. october was the busiest month on record for u.s. m&a, with more than $250 billion of deals struck, according to dealogic. but traders who already were jittery about the outcome of those and other pending deals drove down shares of some takeover targets on wednesday. time warner dropped 1.5%, helping widen the discount to at&t<u+2019>s cash-and-stock offering price to 24.2%. a so-called spread that wide indicates a large degree of skepticism among traders that the deal will get done. it already stood at 21.7% tuesday night after a number of policy makers came out against the deal, including mr. trump. the spread on bayer ag <u+2019>s $56 billion proposed acquisition of chemical company monsanto co. widened to 29.5% from 28.7% as the market factored in the odds the trump administration could target the trans-atlantic tie-up. some deal makers said they view a trump victory as a<u+00a0>long-term positive. the obama administration has stepped up scrutiny of mergers and a number of proposed deals have fallen apart in the face of antitrust and other regulatory pressure. the largest agreed deal last year, pfizer inc. <u+2019>s $150 billion proposal to buy allergan plc, was abandoned after the treasury department tightened rules on so-called tax inversions. <u+201c>what we could have expected from [a clinton administration] is not just the current regulatory environment, but possibly even a heightened one,<u+201d> said mark greene, head of the corporate department at law firm cravath swaine & moore llp. the fact that the stock market cheered mr. trump<u+2019>s ascendancy wednesday could be a good sign for m&a activity, which tends to be correlated with equity prices. the spike in interest rates wednesday may also spur companies to act on deal aspirations while financing is still relatively cheap. and the u.k.<u+2019>s vote to leave the european union, which is being likened by many to the shock of mr. trump<u+2019>s election, triggered some deal making as companies looked to take advantage of the slumping pound. the last time a republican was elected president, when george w. bush secured another four-year term in 2004, the volume of deal making in the u.s. more than doubled by the end of the year from the prior two-month period, according to s&p global market intelligence. by contrast, deal volume dropped by 43% in the same period in 2012 when president obama was re-elected, and by more than 70% when he originally won the office in 2008. <u+201c>while trump<u+2019>s election will create a period of uncertainty, ultimately a republican president and gop congress will be more pro-business,<u+201d> said frank aquila, a partner at law firm sullivan & cromwell llp. write to dana mattioli at dana.mattioli@wsj.com and dana cimilluca at dana.cimilluca@wsj.com
trump victory likely to pose temporary hiccup to merger activity  - wsj
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