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Moelis CEO says regulatory overhang hurting M&A


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Moelis CEO says regulatory overhang hurting M&A

Chairman and CEOKenneth Moelis said political and regulatory headwinds that picked up in the firstquarter will continue to negatively impact the M&A environment.

SpeakingApril 27 during an earningsconference call, Moelis said market volatility, widening of credit spreads and increasedregulatory pressure on deals led to reduced M&A announcements during the firstquarter. He said equity prices have rebounded and credit markets have improved some.

"Butthe political and regulatory overhang has really not dissipated," he .

He notedthat antitrust and tax authorities have become more aggressive in their stance ondeals. During the first quarter, the U.S. Department of the Treasury and the InternalRevenue Service issuedtemporary and proposed regulations that could limit M&A deals that result incorporate tax inversions, which involve companies moving their headquarters overseasto avoid U.S. taxes. Also during the first quarter, the U.S. Justice Departmentfiled an antitrust lawsuitto stop Halliburton Co.from acquiring Baker Hughes a deal that was valuedat more than $34 billion when it was announced.

Moelissaid those types of government actions can lead to leaders of companies reconsideringwhether to approach certain transactions. He added that the U.S. presidential electionalso can negatively impact M&A.

"There'sa lot information that's out there in an election year that adds risk to transactions,"he said.