January 27, 2025
By Matt Wiederrecht, Head of Capstone’s Special Situations Team
SES/Intelsat: Antitrust Regulators Will be More Amenable to Remedies Under Trump, Positive for SES-Intelsat Transaction, Which Is Expected to Close H2 2025
Winners | Intelsat SA |
Losers | Charter Communications Inc. (CHTR), Comcast Corp. (CMCSA), Eutelsat Communications SA (ETL.PA) |
Capstone assigns a 90% probability that US regulators will approve the transaction SES/Intelsat deal by December 19, 2025, under the Trump administration, up from the 80% probability that we assigned under a potential Democratic administration.
On April 30, 2024, SES agreed to acquire 100% equity in Intelsat for a cash consideration of €2.8 billion ($3.1 billion) and certain contingent value rights (CVRs) tied to potential future monetization of the combined usage rights for up to 100 MHz of C-band spectrum. The CVR will terminate seven years and six months after the transaction’s closing date, with stockholders receiving 42.5% of the proceeds and the company retaining 57.5%. Management has indicated that the transaction is expected to close in H2 2025.
The regulator’s main concern in this deal involves the combined company’s near-monopoly in media distribution via C-band spectrum, which is used primarily by cable companies. However, media distribution via fiber is a viable substitute in most markets. While customers in remote areas may still rely solely on C-band, regulators will likely consider two offsetting factors:
- The emergence of Starlink and other low-earth orbit (LEO) satellite providers, which are increasingly capable of connecting remote locations to high-speed internet.
- The Broadband Equity, Access, and Deployment (BEAD) program aims to connect millions of Americans to high-speed fiber, further reducing the consumer set potentially impacted by C-band reliance.
Despite these mitigating factors, regulators will likely recognize the need to address the combined company’s monopoly power. Notably, the Biden administration has hesitated to approve mergers conditioned on behavioral remedies, citing concerns about their enforceability and favoring injunctive relief through litigation instead. By contrast, we anticipate the Trump administration will be more open to behavioral remedies, increasing the likelihood of the deal’s approval with conditions attached.
Finally, it is important to note that the media business for both SES SA and Intelsat has been in decline. Revenue in this segment has dropped significantly during the past decade due to the rise of over-the-top (OTT) streaming platforms, which have diminished the prevalence of traditional cable packages. We note that the 2008 merger of Sirius and XM, approved with conditions, sets a precedent for allowing monopolies in the satellite space for shrinking businesses.
Novo Nordisk/Catalent: FTC Likely to Decide Before Change in Administration, Trump White House Could Drop Potential Challenge
Winners | Catalent Inc. (CTLT), Novo Holdings A/S (CPH: NOVO-B), Novo Nordisk A/S ADR (NVO) |
Losers | Eli Lilly and Co. (LLY), Roche Holdings Ltd. (ROG.SW) |
We believe there is a 25% probability that the current Federal Trade Commission (FTC) will sue to block Novo Holdings acquisition of Catalent before December 31, 2024.
Novo Holdings announced on February 5, 2024, its acquisition of Catalent in a $16.65 billion ($63.50 per share) all-cash deal. After closing the deal, Novo Holdings plans to sell three of Catalent’s fill-finish facilities for $11 billion to its publicly traded subsidiary, Novo Nordisk, which is looking to increase production of its flagship GLP-1 and insulin therapeutics.
The companies and the FTC announced on May 3rd that the deal received a second request, likely stemming from Chair Lina Khan’s scrutiny of vertical mergers and the Biden administration’s stance against consolidation in the pharmaceutical market. Novo Nordisk’s competitors, including Eli Lilly and Roche, have criticized the merger as harmful to the industry, potentially setting the stage for a legal challenge in the final days of President Biden’s administration.
Although this FTC has been highly litigious, the legal process does favor Novo and Catalent due to the weak precedent for blocking vertical mergers. As seen in the failed legal challenge of UnitedHealth Group’s acquisition of Change Healthcare, the US Department of Justice (DOJ) was unable to establish that access to rivals’ sensitive information could sufficiently constitute anticompetitive behavior if the companies implement silos and firewalls.
Reuters reported on November 22nd that the deal is set to receive unconditional approval from the European Commission and Catalent expects the deal to go through. Once the FTC’s decision is announced, it will be crucial to watch how the Republican commissioners vote. If they oppose an FTC action to block the deal, we believe this signals that a challenge would be dropped under a Trump presidency. If Republican commissioners vote in support of an FTC action, then we expect a legal battle, once again testing the government’s ability to block vertical mergers.
US Steel/Nippon: CFIUS Still Likely to Approve US Steel/Nippon Deal Under Biden Administration Before Year-End; Conditions Likely
Winners | United States Steel Corp. (X) |
Losers |
Capstone believes there is a 75% probability that the Committee on Foreign Investment in the United States (CFIUS) will approve Nippon Steel’s acquisition of United States Steel Corp. before the end of 2024.
On December 18, 2023, Nippon Steel North America Inc., a subsidiary of Nippon Steel Corp, entered into a definitive agreement to acquire US Steel for $12.3 billion in cash, or $55 per share. The transaction is subject to the customary regulatory approvals, including a review by CFIUS.
Capstone believes the political risks that have undermined market sentiment toward Nippon Steel’s planned acquisition of US Steel are close to playing out. US Steel shares tumbled after news organizations in mid-September reported that President Biden was preparing to block the transaction using CFIUS authorities. The stories, which relied on unnamed White House advisers who leaked information in a manner unprecedented during a CFIUS review, caused an immediate political tempest and resulted in a fairly rapid walk-back of the contents of the leak. As part of this, the CFIUS statutory timeline for reviewing the transaction was extended to December 22nd.
The extension gives the committee more time to reach a mitigation agreement with the parties in the deal, something the companies have shown considerable openness to. This is important because for the committee to make a unanimous recommendation to the president to block a transaction, it must determine that the only way to mitigate national security risks arising from the transaction is to prevent the transaction altogether. The lack of a clear, publicly articulated national security argument for blocking the transaction has been largely absent, driving our conviction that the deal will be completed.
While political calculations are not a factor in a CFIUS review, we recognize that the heightened political sensitivity of the US steel industry, particularly in Pennsylvania, where US Steel is headquartered, is a risk. However, we believe it will only get harder to reach a unanimous agreement to block this deal in this extended review period, making its approval with mitigation the most likely outcome.
Spirit Aero/Boeing: Vertical Mergers in Critical Industries Likely Facing Less Scrutiny Under Republican FTC, Little Opposition from Competitors
Winners | Spirit AeroSystems Holdings Inc. (SPR), Boeing Co. (BA), Airbus SE (AIR.PA) |
Losers |
Capstone expects that US regulators will approve Boeing’s merger with Spirit and has assigned an 88% probability that the transaction will go through by August 2025.
On July 1, 2024, Boeing announced it would merge with Spirit AeroSystems in an $8.3 billion ($37.25 per share) all-stock deal, a 15.24% spread on Spirit’s November 20th share price of $31.93. Spirit originally spun off Boeing in 2005, but Boeing is bringing it back in-house to increase oversight over its supply chain in the wake of Federal Aviation Administration and National Transportation and Security Board scrutiny. On October 23rd, Spirit shared with investors that it received a second request for information, in line with our prediction. Management still expects the deal to close by mid-2025, which corresponds with the typical length of an antitrust investigation.
Federal Trade Commission Chair Lina Khan and DOJ Assistant Attorney General Jonathan Kanter have attempted to block a number of vertical mergers under the Biden administration by testing novel legal theories in the 2023 Merger Guidelines. However, we do not expect this will continue once Donald Trump is sworn into office.
Spirit is in dire financial straits, but both Boeing and Airbus have spent heavily to prevent its bankruptcy. After Spirit issued a going concern warning about its ability to continue operating, it received $350 million from Boeing and $107 million from Airbus in prepayments to remain afloat through slow demand spurring from the Boeing strike. The strike has since ended, so we anticipate demand for aerostructures, pistons, and wings from Spirit to slowly tick up in the coming months.
Spirit is a vital part of the global aviation supply chain. The aircraft manufacturing market is duopolistic, split between Boeing and Airbus—companies that have come out in favor of the merger. Spirit will likely go bankrupt if the merger is blocked, temporarily collapsing domestic aircraft production. An America First Trump administration is unlikely to want to yield market share to European Airbus, so we are confident regulators will approve this vertical merger.
Capital One/Discover: DOJ and OCC Leadership Shifts Favor Capital One’s Discover Deal in a Second Trump Term
Winners | Discover Financial Services (DFS) |
Losers |
Capstone assigns a 75% probability that federal regulators will approve Capital One Financial Corp.’s (COF) acquisition of Discover Financial Services by May 19, 2025, which represents a permitted extension to the agreement’s life cycle if regulators fail to grant approval by the original deal termination date of February 19, 2025.
Capital One on February 19, 2024, announced its plan to acquire Discover in a 100% stock transaction worth $35.3 billion. The agreement’s framework, as submitted to the Securities and Exchange Commission (SEC), outlines an exchange ratio in which Discover shareholders will receive 1.0192 Capital One shares for each Discover share. Although both companies initially anticipated the deal would close between late 2024 to early 2025, Capitol One formally acknowledged in its October 2024 earnings call that it expects the deal to close in early 2025 pending regulatory approval. As of November 26th, the current deal spread is ~7%, and is narrower than its historical average, suggesting increased investor confidence in approval under the incoming administration.
We raised our probability of the acquisition from 55% in April 2024 to 75% due to President-elect Trump’s electoral victory and his administration’s anticipated regulatory actions in the following key areas:
- Market Concentration Concerns Less Likely to Trigger Federal Antitrust Holdup: When approved, the merger will create the largest credit card issuer in the nation and sixth-largest bank by assets, with control over 25% of all credit card loans and a high percentage of the subprime credit card market (sub-660 FICO scores). Traditionally, DOJ’s bank merger analysis focuses on deposit concentration and branch overlap, but recent reforms allow the department to take a more holistic approach to bank competition analysis. Furthermore, the Biden DOJ has been aggressive in alleging that deals create unfair competition in narrowly defined submarkets. We expect that incoming DOJ leadership will be less aggressive in defining narrow subprime credit card markets, reducing the risk of an intendent DOJ challenge to the deal or an unfavorably competition analysis that the Office of the Comptroller of the Currency (OCC) and Federal Reserve use. In addition, we expect that the incoming DOJ will look more favorably on Capital One-Discover’s argument that the merger will increase overall network competition. If there are lingering concerns, we believe the history of DOJ under the first Trump administration, and its pursuit of divestitures and other structural remedies in lieu of antitrust litigation, suggest the Capital One-Discover merger is significantly less likely to face direct challenge or disapproval.
- Leadership Shakeups at OCC and DOJ to Increase Likelihood of Merger Approval: Relatedly, we expect the removal of Michael Hsu at the OCC and a conservative replacement will shift concerns from market concentration issues toward financial stability and economic growth, as we saw during Trump’s first term with Joseph Otting at the helm of the OCC. Comptroller Hsu has led a revision of bank merger policy at the OCC, which subjects larger deals to a significantly elevated degree of scrutiny amid broader financial stability concerns. Republicans have criticized the new frameworks, saying they introduce uncertainty into review processes and unfairly discourage acceptable mergers. We expect that incoming OCC leadership will have a much more constructive stance on large bank mergers, rather than presuming that those deals are highly problematic, as appeared to be the case under the Biden administration. Given the shift at both DOJ and the Fed, we expect the deal to proceed.
Increased Enforcement Action by State AGs Kneecapped by Limited Authority: Despite the regulatory inertia we expect from a second Trump administration to increase merger approvals, we believe state intervention does represent a modest risk to the Capital One-Discover acquisition. In a petition filed on October 23, 2024, the New York Attorney General’s Office requested a subpoena be issued against Capital One to obtain documents and information related to the deal. It cited specific concerns about New York residents with subprime credit scores, the AG’s investigation into the merger raises the specter that state AG enforcement could create additional regulatory hurdles. We believe that approval from federal regulators, which we expect, will significantly weaken state-level attempts to block the transaction as state-level intervention in bank mergers is historically rare.
Capstone believes the indices the Fed, OCC, and DOJ use to scrutinize merger approvals under the Bank Merger Act (including an assessment of community impact, financial stability, and market concentration) are aligned with past mergers of similar scope that were approved. The incoming Trump administration and its divergence away from Biden’s robust antitrust enforcement regime and toward more relaxed merger guidelines with conservative appointees heading the OCC and DOJ bode well for a likely Capital One-Discover approval in H1 2025.
Verizon/Frontier: Verizon Aims to Capitalize on BEAD Funding by Reacquiring Legacy Assets, Regulators Likely to Approve Its Acquisition of Frontier Communications
Winners | Verizon Communications Inc. (VZ), Frontier Communications Parent Inc. (FYBR) |
Losers |
We believe there is an 85% probability under the second Trump administration that US regulators will approve Verizon’s acquisition of Frontier Communications by March 2026.
On September 5, 2024, Verizon announced it was acquiring Frontier Communications for $20 billion, with half of this going to Frontier shareholders and the remaining half representing Frontier debt that Verizon will assume. Frontier shareholders will pay $38.50 per share, or $9.6 billion in cash, for their shares, which represents a 43.7% premium on the stock as of the dollar-weighted average price of the shares for the three months before media reports started circulating that Verizon was considering this transaction. According to the companies, shareholder and regulatory approval will be completed by March 2026.
This is consistent with our prediction before the presidential election. We assigned such a high probability that the transaction will close because the companies do not have overlapping network footprints and regulators will not view the transaction as anti-competitive.
The FCC may even view the transaction as in the public’s interest as the combined company would be well-positioned to compete for Broadband Equity, Access and Deployment (BEAD) funding. Only half of Frontier’s network has been upgraded to fiber and without BEAD funding or capital from Verizon, it is unlikely Frontier can fully upgrade its network to fiber. Verizon would seek to acquire a firm, like Frontier, that has not fully upgraded to fiber if the company intended to upgrade all of Frontier’s network to fiber. Frontier’s legacy network is very costly to maintain and operate and is losing customers to competing providers like cable companies, fixed wireless providers, and even low-earth-orbit satellite providers such as Starlink. One way or another, Frontier’s entire legacy network will be upgraded and replaced by fiber and that process will go much faster under the stewardship of Verizon and with access to BEAD funding.
Kellanova/Mars: Consolidation Play in the Fragmented Snacks Market Where the Only Obstacle Might be Excessive Concentration in Snack Bars, 85% Odds Deal is Approved
Winners | Kellanova (K) |
Losers |
Capstone has raised the probability that Mars will acquire Kellanova from 75% to 85% in H1 2025 following President-elect Trump’s win in November.
On August 14th, Mars Inc. announced that it had entered into an agreement to purchase Kellanova for $29.6 billion in cash and assume the company’s $6.3 billion in outstanding indebtedness. This brings the total enterprise value of Kellanova to $35.9 billion which is the equivalent of 16.4x the company’s adjusted EBITDA for the 12 months ended June 30, 2024. Kellanova shareholders will receive $83.50 per share in cash. Mars expects to finance this acquisition through a combination of cash on hand and newly issued debt from a consortium of lenders that have committed the necessary financing. The transaction is currently expected to close in H1 2025.
We adjusted our probability upward because we have seen no sign the FTC has paid particular attention to this transaction since it was first announced or that a second request for information has been issued. However, the companies are under no obligation to disclose to investors that the FTC has issued a second request but we expect it would have been mentioned in a filing if company management was concerned.
Given the lack of product overlap between the two companies, we believe the primary risk to the deal relates to concentration in the snack bar market because the merged firm will control almost 30% of this market based on 2021 sales data, the most recent information we have seen. The FTC has blocked large transactions in markets where the merging companies have little in the way of product overlap but the level of concentration in a specific subsegment of the market post-merger is very high. The perfect example of such a transaction was the planned merger between Tapestry Inc. (TPR) and Capri Holdings Ltd. (CPRI), where the FTC blocked the deal due to concerns about reduced competition in the accessible luxury handbag market.
Synopsys/Ansys: Global Regulators Likely to Clear Deal with Coordinated Behavioral Remedies; SAMR Remains Largest Risk to Deal Approval
Winners | Ansys Inc. (ANSS) |
Losers | Siemens AG (SIE.DE), Cadence Design Systems Inc. (CDNS) |
We assign an 80% probability that Synopsis and Ansys will be able to consummate their acquisition deal with global regulatory approvals by January 15, 2026.
On January 16, 2024, Synopsys announced its $35 billion acquisition of Ansys through a combination of cash and equity, the largest transaction in the technology industry in 2024. The merger is undergoing regulatory reviews in several jurisdictions, including the US, UK, and China. Management continues to expect that the deal will close in H2 2025.
In September, Synopsys announced the sale of its $100 million optical unit, a key area of overlap between the companies’ simulation software portfolios. We believe the divestiture alleviates horizontal competition concerns and paves the way for antitrust regulators to approve the deal. In addition:
- US: We expect that the Trump administration will be more accommodating of behavioral remedies in merger reviews, which is an incremental positive for the deal. We also believe it could look more favorably upon the national security benefits of the deal, given the strategic importance of electronic design automation (EDA) technology.
- China: The country’s State Administration for Market Regulation (SAMR) remains the biggest risk to the deal, particularly given China’s history of retaliating against US trade and export controls by slow-rolling merger reviews. However, China’s asymmetric reliance on the companies’ EDA products is the strongest incentive for SAMR to approve the deal. We expect the agency will insist on behavioral remedies tailored to the Chinese market as a condition for approval.
- Global: We expect global regulators to follow in lockstep with the US FTC in reviewing the merger. Notably, after the divestiture announcement, the European Commission announced it was commencing a review of the deal.
Siemens/Altair: Antitrust and National Security Regulatory Approvals Expected Despite Potential Second Request and CFIUS Investigation
Winners | Altair Engineering Inc. (ALTR) |
Losers | Synopsys Inc. (SNPS), Cadence Design Systems Inc. (CDNS) |
Capstone assigns a 93% probability that Siemens AG’s acquisition of Altair Engineering will receive US antitrust approvals by December 31, 2025, despite a potential second request.
On October 30, 2024, German-owned Siemens announced its intention to acquire Altair Engineering in a $10.6 billion all-cash deal. The deal is likely to encounter antitrust scrutiny, though a clearance agreement between the FTC and DOJ to investigate the deal has not yet been reached. We expect regulators to focus on the merger’s impacts on concentration in the computer-aided engineering (CAE) software markets, as well as areas of horizontal overlap.
We do not believe the acquisition meets the threshold for anti-competitive enforcement based on its market share and concentration impacts, even under Biden-era review guidelines that the Trump administration is likely to rescind.
Separately, we believe there is an 85% probability that the deal will receive approval from the Committee on Foreign Investment in the United States by June 30, 2025. We expect that CFIUS will scrutinize the level of sensitivity of Altair’s simulation technology and potential technology transfer concerns. However, we believe any perceived national security risks will be resolved through a mitigation agreement.
The deal could experience challenges with SAMR review if US-China ties flare up under a second Trump administration. However, we note that SAMR has recently tended to clear deals with remedies favorable to China’s domestic industry rather than block them.

Matt Wiederrecht, Head of Capstone’s Special Situations Team
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