Capstone expects the Trump administration to maintain a permissive stance on merger reviews, with most transactions ultimately approved unless they pose clear and unresolvable competitive harm from excessive consolidation. We see few deals at risk of being blocked, and believe appeals aligned with administration priorities could outweigh concerns regulators might otherwise emphasize.
Outlook at a Glance
- Boeing/Spirit AeroSystems: FTC Unlikely to Challenge Deal After EU Approval; Trump Administration Unlikely to Oppose Boeing’s Vertical Plan Given its Strategic Importance
- Charter/Cox: FCC Likely to Approve Deal as Geographic Expansion Does Not Increase Local Market Consolidation, Green Light May Open Door to Additional Cable M&A
- Compass/Anywhere: Likely Second Request to Create Buying Opportunity, FTC Likely to Clear Deal After Requiring Some Local Divestitures In Large Metropolitan Areas
- Getty/Shutterstock: Excessive Horizontal Consolidation in Stock Image Market Likely to Trigger a DOJ Challenge, UK Regulators Find Generative AI Is Not Yet A Competitor
- MasterBrand/American Woodmark: FTC Unlikely to Challenge Deal, Newly Widened Spread Offers Buying Opportunity
- Nexstar/Tegna: FCC Likely Open to Broadcaster Consolidation; Newsmax CEO’s Opposition Unlikely to Threaten Deal
- PIF-Silver Lake-Affinity/Electronic Arts: EA Take-Private Presents Minimal Regulatory Concerns, Likely to Receive Antitrust and Foreign Investment Clearances
- Axcelis/Veeco: SAMR Likely to Initiate Extended Review of Semiconductor Equipment Merger, Deal Spread Understates Potential Trade Retaliation Risk
- Union Pacific/Norfolk Southern: UP CEO Accelerates Merger Filing to Capitalize on Support from Trump and Rail Unions; Republican Regulators are Likely to Approve Deal
Boeing/Spirit AeroSystems: FTC Unlikely to Challenge Deal After EU Approval, Trump Administration Unlikely to Oppose Boeing’s Vertical Plan Given its Strategic Importance
| Winners | Boeing Co. (BA), Spirit AeroSystems Holdings Inc. (SPR) |
| Losers | None |
Deal Spread: 3.9%
We assign a 10% probability that the Federal Trade Commission (FTC) will file an administrative complaint to block Boeing Co.’s (BA) acquisition of aerostructure manufacturer Spirit AeroSystems Holdings Inc. (SPR) by the end of December 2025. We believe that decisions by regulators in the EU and UK to approve the deal indicate that concerns surrounding the potential impacts of the vertical integration on European competitor Airbus SE (AIR on the Madrid exchange) have been resolved using divestitures volunteered by Boeing. An attempting by the FTC to block this deal would only hamper Boeing, and with the Trump administration challenging vertical deals at a much lower rate than the Biden administration, we believe the deal’s closure is imminent.
If regulators block the deal, Boeing will be required to pay Spirit a $300 million termination fee, indicating the company’s confidence in approval. Outside the US, the major regulatory hurdles (in the EU and the UK) have been cleared. If the deal does not close by its outside date of December 31, 2025, the companies will likely have to reopen the merger agreement. Spirit has issued a going concern warning, calling into question its ability to continue operating without a deal, and Boeing will need the deal dependent on Spirit to produce aerostructures, making the deal necessary for both companies.
– Josh Parker, [email protected]
Charter/Cox: FCC Likely to Approve Deal as Geographic Expansion Does Not Increase Local Market Consolidation; Green Light May Open Door to Additional Cable M&A
| Winners | Charter Communications Inc.’s (CHTR), Cox Communications |
| Losers | Comcast Corp. (CMCSA) |
Deal Spread: N/A, Private
We assign a 30% probability that the Department of Justice (DOJ) will open a Second Request investigation into Charter Communications Inc.’s (CHTR) acquisition of fellow cable provider Cox Communications (private) and a 15% probability that an administrative complaint will be filed by the end of July 2026 by the Federal Communications Commission (FCC) that would block transfer of Cox’s license. The deal is focused on expanding Comcast’s geography rather than consolidating its pricing power in a specific market, and the cable industry has faced substantial competition from fixed wireless access in recent years, easing concerns about anticompetitive practices.
The deal parties did a “pull-and-refile” of their merger filing in mid-August, giving the DOJ some additional time to examine the deal. We have yet to hear whether the DOJ has issued a Second Request, as companies are not required to disclose it. The FCC has opened a docket for comments on the transaction and the comment period technically closed at the end of October, though most comments were not posted until after the government shutdown ended on November 12, 2025. The outcome of the deal will indicate how the Trump administration views cable consolidation and could catalyze additional M&A activity. Comcast Corp. (CMCSA), Charter, and T-Mobile US Inc. (TMUS) have been active in acquiring smaller providers in recent years and all these companies would likely be increasingly active in expanding their network footprints under an accommodative Trump administration.
– Josh Parker, [email protected]
Compass/Anywhere: Likely Second Request to Create Buying Opportunity, FTC Likely to Clear Deal After Requiring Some Local Divestitures in Large Metropolitan Areas
| Winners | Compass Inc. (COMP), Anywhere Real Estate Inc. (HOUS) |
| Losers | Zillow Group Inc Class C (Z), CoStar Group Inc. (CSGP) |
Deal Spread: 5.7%
We assign an 80% probability that the Federal Trade Commission (FTC) will open a Second Request investigation by the end of December 2025 into Compass Inc.’s (COMP) acquisition of competing real estate brokerage Anywhere Real Estate Inc. (HOUS). We assess a 25% probability that the commission will file an administrative complaint by the end of December 2026, to block the deal. While combining with Anywhere would make Compass the largest player among real estate brokers in the competitive US brokerage industry, we believe it is unlikely that regulators will be able to define a nationwide market that would enable it to challenge the deal. Instead, we expect that the FTC and state attorneys general (AGs) will scrutinize areas where concentration is likely to be excessive, including metropolitan areas such as Chicago, New York City, Dallas, San Francisco, and Miami—likely securing a consent agreement with divestitures in these cities to keep the company below the 30% market share threshold that typically prompts the DOJ to examine the antitrust implications of a deal.
Compass’s use of private listings—where a property is first advertised to other Compass agents before being listed publicly—has drawn criticism from the National Association of Realtors (NAR) and portals such as Zillow Group Inc. Class C (Z) and CoStar Group Inc. (CSGP). These are strong lobbying powers which we expect to push for remedies to decrease Compass’s market power and its ability to offer private listings, although antitrust regulators are unlikely to preempt the DOJ’s ongoing investigation into how the NAR policies impact private listings.
– Josh Parker, [email protected]
Getty/Shutterstock: Excessive Horizontal Consolidation in Stock Image Market Likely to Trigger a DOJ Challenge; UK Regulators Find Generative AI Is Not Yet a Competitor
| Winners | Adobe Inc. (ADBE), AI industry |
| Losers | Getty Images Holdings Inc. (GETY), Shutterstock Inc. (SSTK) |
Deal Spread: 16.5%
We assign an 85% probability that the DOJ will file an administrative complaint to block Getty Images Holdings, Inc.’s (GETY) acquisition of rival stock image library Shutterstock, Inc. (SSTK) by the end of January 2026. We believe the deal would produce excessive horizontal consolidation in a highly concentrated industry. Right now, Shutterstock’s performance is far too strong for it to use a failing firm defense as an argument that this proposal is needed to ensure the company’s survival, in part because the industry has yet to face the full impact of artificial intelligence. Still, emerging competition from generative artificial intelligence (AI) firms notwithstanding, we view Shutterstock as undervalued, even if a court blocks the deal. The deal has a high break price, and Shutterstock has taken the path of partnering with AI giants instead of fighting them in court. This practice has led the company to a more diversified revenue picture, getting about 15% of its sales from licensing to those businesses.
On October 20th, the UK’s Competition and Markets Authority (CMA) released its Phase 1 decision on the deal, which highlighted excessive consolidation in the UK editorial stock image market and that the global supply of stock images could be much less competitive were the deal to go through. We saw this as very negative for the deal’s chances in the US and raised our probability that the DOJ would file an administrative complaint to 80% from 75%. The most crucially, the CMA found no evidence that “GenAI players are either currently, or likely to be in the next few years, an alternative to stock content for a significant proportion of demand.” This highlights that a potential “saving grace” for the deal—including GenAI within the relevant market definition to assuage an excessively high Herfindahl-Hirschmann Index—is now less likely. The deal is now under a Phase 2 investigation in the UK.
– Josh Parker, [email protected]
MasterBrand/American Woodmark: FTC Unlikely to Challenge Deal; Newly Widened Spread Offers Buying Opportunity for Investors
| Winners | MasterBrand Inc. (MBC), American Woodmark Corporation (AMWD) |
| Losers | Home Depot Inc (HD), Lowe’s Companies Inc (LOW) |
Deal Spread: 4.0%
Capstone assigns a 35% probability that the FTC will file an administrative complaint to block MasterBrand Inc.’s (MBC) acquisition of cabinetmaking rival American Woodmark Corp. (AMWD) by the end of December 2026. Although the broader regulatory environment is positive for deal approvals, the administration has taken a hawkish approach towards companies with a history of avoiding tariffs through transshipping (such as Woodmark). Cabinets have been at the center of recent tariff negotiations, with Trump levying 25% tariffs on imports. This all ties back to a very public dispute over antidumping duties between MasterBrand/American Woodmark and their former trade association, the Kitchen Cabinet Manufacturers Association (KCMA), which culminated in the companies leaving the trade association. Although we believe the deal will be approved, we also believe the spread does not properly price in the risk of a “Trump effect” block, as the FTC could define a very narrow market that constitutes this as a 3-2 merger.
As anticipated, MasterBrand announced that the deal received a Second Request from the FTC on November 7th. We see the deal spread widening to 4% from 1% as more accurately pricing in the risk of the deal. That said, we believe the transaction will ultimately get the green light from regulators.
– Josh Parker, [email protected]
Nexstar/Tegna: FCC Likely Open to Broadcaster Consolidation, Newsmax CEO’s Opposition Unlikely to Threaten Deal
| Winners | Nexstar Media Group, Inc. (NXST), Tegna Inc. (TGNA) |
| Losers | Sinclair Inc (SBGI), MVPDs |
Deal Spread: 13.7%
We assign an 85% probability that the Federal Communications Commission (FCC) will approve Nexstar Media Group, Inc.’s (NXST) acquisition of rival broadcaster Tegna Inc. (TGNA) by the end of June 2026. FCC Chairman Brendan Carr has shown that he is open to deals that would increase consolidation in the industry that would likely face an uphill battle under a Democratic administration.
As video content increasingly shifts to streaming from cable, the FCC has initiated a rulemaking to review the caps on broadband ownership, signaling that the commission will likely waive the limit that an entity can only own up to two major stations in a media market using its public interest standard. The FCC will also likely ease the national audience cap of 39% of US television households that station groups must currently stay below. The primary question in our mind revolves around whether Carr first changes media ownership rules, merely waives the rules in the context of this transaction, or issues a final order that eases the media ownership rules and approves the transaction at the same time. However he approaches the situation, we believe the approval of this transaction will unleash a wave of consolidation in broadcast television as companies like Sinclair Inc (SBGI) fight to remain competitive.
Newsmax’s CEO, Chris Ruddy, has come out as the most vocal critic of this transaction and any easing of the FCC’s media ownership rules. We believe he will likely oppose most major transactions involving broadcast station groups and cable companies as he views consolidation as an existential threat to Newsmax, given the company’s inability to attract much of an audience or carriage on many cable systems. While we do not believe his opposition is a threat to the transaction being approved, we will continue to monitor the situation because he does at times have the ear of President Trump. That said, the same is true of many other influential people who support consolidation in the media industry, including FCC Chairman Carr.
– Matt Wiederrecht, [email protected]
PIF-Silver Lake-Affinity/Electronic Arts: EA Take-Private Presents Minimal Regulatory Concerns, Likely to Receive Antitrust and Foreign Investment Clearances
| Winners | Electronic Arts (EA) |
| Losers | Take-Two Interactive Software, Inc (TTWO), Nintendo ADR (NTDOY) |
Deal Spread: 3.2%
Capstone assigns a 95% probability that Electronic Arts’ (EA) take-private deal will receive clearance from antitrust regulators by the end of September 2026. The transaction raises few competition concerns, with little overlap with the buyer consortium’s current holdings. We expect the FTC to clear the deal without issuing a Second Request. The deal may also be reviewed by China’s State Administration for Market Regulation (SAMR), though we see little risk that SAMR delays or blocks it outright, primarily because it would add to the strain China’s respective relationships with the US and Saudi Arabia.
We also assign a 90% probability that the deal will be approved by the Committee on Foreign Investment in the US (CFIUS) within the same timeframe. Fundamentally, we do not expect CFIUS to treat the Public Investment Fund (PIF) as an adversarial buyer, given the committee’s extensive track record of clearing deals involving sovereign investors from the Persian Gulf and the administration’s broadly favorable view of the Saudis. Moreover, any national security concerns regarding foreign access to sensitive user data or EA’s artificial intelligence (AI) assets can be mitigated.
– Neil Suri, [email protected]
Axcelis/Veeco: SAMR Likely to Initiate Extended Review of Semiconductor Equipment Merger, Deal Spread Understates Potential Trade Retaliation Risk
| Winners | Axcelis Technologies Inc. (ACLS), Veeco Instruments Inc. (VECO) |
| Losers | Semiconductor equipment manufacturing industry |
Deal Spread: 1.2%
We assign a 75% probability that SAMR will open a Phase III investigation into Axcelis Technologies Inc.’s (ACLS) merger with Veeco Instruments (VECO) by October 2026. The companies have confirmed that the transaction requires clearance from SAMR, as they both clearly exceed China’s revenue-based merger notification thresholds. We expect that the regulator will scrutinize the deal, as semiconductor equipment mergers typically attract outsized attention, given the direct relevance to a chokepoint in China’s semiconductor supply chain and the significant degree of customer concentration within China. We expect SAMR to focus on export control considerations, including the risk that the Trump administration may expand restrictions on legacy semiconductor manufacturing equipment.
We also think China may be tempted to use this deal is as an opportunity to retaliate against restrictive US policies governing trade and export controls as SAMR has asymmetric leverage in the merger review. While China does not rely strategically on the companies’ technology due to the prevalence of domestic substitutes, a significant amount of the companies’ combined revenue is generated in the Chinese market. We believe that the current 1.4% spread does not sufficiently price in the risk that Chinese regulators initiate an extended review, which could force the companies to abandon the transaction.
– Neil Suri, [email protected]
Union Pacific/Norfolk Southern: UP CEO Accelerates Merger Filing to Capitalize on Support from Trump and Rail Unions; Republican Regulators are Likely to Approve Deal
| Winners | Union Pacific Corp. (UNP), Norfolk Southern Corp. (NSC) |
| Losers | Trucking industry |
Deal Spread: 10%
We assign a 60% probability that the US Surface Transportation Board (STB) approves Union Pacific Corp.’s (UNP) acquisition of Norfolk Southern Corp. (NSC) by October 2027. Capstone believes that a series of recent events (see Railroad Quick Take: Trump’s Support Raises Probability That Union Pacific’s Acquisition of Norfolk Southern Will Win Regulatory Approval, October 29, 2025) indicates the regulatory environment has tilted in favor of the acquisition after President Trump gave his verbal support to the deal. Trump also fired STB board member Robert Primus (D) and nominated Richard Kloster (R) to the board. The transaction has gotten a green light from the Sheet Metal, Air, Rail and Transit (SMART-TD) union are indicators that suggest the transaction is likely to be approved. Union Pacific chief executive officer Jim Vena also said in the company’s Q3 earnings call on October 23rd that the acquisition will meet the STB Class I merger requirement to “enhance competition” by arguing that the new transcontinental railroad will create competition between railroad freight and the trucking industry.
Eighteen senators have written a letter to the STB urging the board to consider the potential impacts of the combination. However, the choice lies entirely with the STB. In earnings calls, CEO Jim Vena was very vocal about his desire to submit the complete application by December 1st, 2025. Union Pacific recently announced it expects to submit the application on or around December 16th. If the company files the application by that date, in theory, the merger could go through as early as spring 2027. However, we believe a more likely timeframe for approval is in the fall of 2027, given the number of stakeholders involved.
– Grace Feitel, [email protected]
