WSJ What’s News - What This Year’s Dealmaking Boom Means for 2026

Starting point is 00:00:00 After a roller coaster year for deals, we look at what's in store for 2026. Watching Trump and what's going on down in D.C. is going to continue to be a huge factor in M&A market. Plus, the heirs to a Texas billionaire will pay $750 million in the biggest U.S. tax fraud case ever. And the electricity crisis in Ukraine has left some parts of the country in the dark, for days. It's Wednesday, December 24th. I'm Alex O'Sullough for the Wall Street Journal. We're on a holiday schedule in your feed once a day, and this is what's news, the top headlines and business stories moving the world today. The estate of billionaire Robert Brockman has agreed to pay $750 million in back taxes and

Starting point is 00:00:54 penalties, settling a case that arose from what the U.S. government called the biggest tax fraud charges ever filed against a person. The details were revealed in a U.S. tax court filing yesterday. The IRS had been seeking $1.4 billion, including interest in the case. Brockman was a wealthy Texas auto software entrepreneur who was known for his penny-pinching ways, staying at budget hotels and eating frozen dinners in his room. He was indicted in 2020 on record-setting tax fraud charges. The government accused him of using a web of offshore entities to conceal more than $2 billion income. He died in 2022 at age 81 while awaiting trial on the criminal fraud charges, and the civil case continued in tax court after his death. The U.S. said it won't allow a former European

Starting point is 00:01:44 Union official to enter the country over his role in a European online content law, but the Trump administration says censors Americans. Yesterday, Secretary of State Marco Rubio said that the U.S. would impose visa restrictions on five people. It said were, quote, agents. of the global censorship industrial complex. One of those people is Tieri Breton, a French citizen who served as an EU commissioner until last year. The other four people targeted work for organizations that focus on disinformation and hate speech. The European Commission said it condemns the U.S. decision and has requested clarifications.

Starting point is 00:02:19 Breton said the U.S. was engaging in a, quote, witch hunt. And in Ukraine, President Volodymyr Zelensky said he would be willing to pull troops out of the eastern region of Donesk and create a demilitary. militarized free economic zone as part of a potential peace deal, as long as Russia took similar steps to withdraw from areas it controls. Zelensky said yesterday that there would be a referendum on the proposal and other parts of the peace plan, giving the Ukrainian people a vote on the deal. And for Ukrainians, Christmas threatens to be dark as the country deals with its most severe energy crisis since 2022. Moscow has been attacking the grid on a greater scale,

Starting point is 00:02:54 leaving some parts of the country without power for days at a time. Markets will close early today. U.S. stock markets will shut at 1 p.m. Eastern time and bond markets an hour later. Markets will be closed tomorrow for Christmas Day and they'll reopen for regular trading on Friday. Coming up, the teens juggling high school with founding an AI company and what 2026 looks like for mergers and acquisitions. Those stories and more after the break. Deal news, British oil giant BP has agreed to sell a 65% stake in its castrol lubricants business to investment firm Stone Peak. The deal values the division at $8 billion. The

Starting point is 00:03:40 companies announced the deal today after the Wall Street Journal reported that an agreement was near. And Sanofi is buying vaccine specialist Dynavax technologies for $2.2 billion. The French pharmaceutical company has been using acquisitions to strengthen its lineup of medicines and vaccines after some experimental drugs missed their goals in clinical studies or were turned down by regulators. In fact, there have been a lot of deals this year, from the merger of Railroads Union Pacific and Norfolk Southern to Google's acquisition of cybersecurity startup whiz. And there have been big breakups, too, like Kraft Heinz splitting into two companies. What's been driving all this activity? And can we expect it to continue next year?

Starting point is 00:04:21 I talked about it with WSJ lead deals reporter Lauren Thomas. Lauren, how was this year for deals? It was a sort of roller coaster for deals this year. There was a lot of optimism that 2025 was going to be a blockbuster year for M&A. And then as we head into the spring, you have Liberation Day and just a lot of uncertainty in the market around tariffs, this trade war that kicked off. And that put a lot of deals on pause. But then after Labor Day, a switch really flipped and M&A was back. Dealmakers settled into this new norm under Trump, and the year finished off incredibly strong. It certainly got a lot of folks on Wall Street even more optimistic about what 2026 could bring.

Starting point is 00:05:09 One of the things that we've seen from the Trump administration this year is a laxer approach to antitrust. What are some examples and what impact has that had? The Justice Department and the Federal Trade Commission just haven't been as strict as they were in previous administrations. They've really only sued to block a handful of mergers under Trump. One of the biggest deals of the year was this massive railroad merger Union Pacific buying Norfolk Southern. That was a more than $70 billion deal to create this transcontinental railroad operator here in the U.S. Everyone that I talked to said just wouldn't have been feasible in prior administrations would have likely been challenged in the courts, but seems like a much clearer pathway to close under Trump.

Starting point is 00:05:55 Trump. What might be some other reasons we're seeing this wave of deals? The stock market where it's at, it's gotten companies feeling more confident to go out and do something big. Another element, and this is always the case, is you see one company go out and do a big deal, something splashy, and then that kind of gets everyone else thinking, you know, are we about to miss the boat if we don't do anything? And you've got this phenomenon now of private credit. And so You don't necessarily need to call up Jamie Diamond or JP Morgan to finance your deal. There are all these other sources of capital out there. The money is just flowing much more freely now, the whole private equity universe.

Starting point is 00:06:36 They'd really been sitting on the sidelines now that you've started to see interest rates come down. That's particularly given this private equity group more confidence that they can go out and do deals and get those done. What are some of the factors that you're going to be watching to see whether the year is shaping up to be, you know, as great as some bankers are predicting. Watching Trump and what's going on down in DC is going to continue to be a huge factor in M&A market. One reason why you started to see this surge in deals in the back half of 2025 is just CEOs got more comfortable with Trump and the fact that Trump would be okay with your deal. And so on a moment's notice that could change and you've seen Trump will come out and post about a particular company.

Starting point is 00:07:26 And so there's kind of this red card of what is he going to say? What does he think? And so watching that as carefully and closely as we can will allow us to continue to have a pulse on just where the next big deals could be coming from. Certainly some of the deals in 2025 that have really been centered around America first, making America strong. It's deals like that that you can really craft a narrative around it to kind of match up with what what Trump is trying to accomplish down in D.C.

Starting point is 00:07:56 Those, I think, have had the best odds of getting announced so far. So we'll definitely be looking for more of that. That was WSJ lead deals reporter, Lauren Thomas. Thanks so much, Lauren. Thank you. Starting a business takes dedication. It often takes late nights and early mornings. Some founders have had to juggle the challenges of a startup with going to high school.

Starting point is 00:08:20 While teenage founders aren't totally new, after all, Bill Gates co-founded Microsoft when he was 19, some of today's entrepreneurs are getting a particularly early start. WSJ reporter Katie Binley spoke to these young founders and told our Tech News Briefing podcast about how AI is helping to fast-track their ambitions. So I spoke with one 15-year-old who has built a platform that basically produces financial reports about small and mid-cap companies. So he's using AI models to generate these reports. He has tens of thousands of monthly users. And then some of the companies that have had reports generated about them have ended up putting out press releases,

Starting point is 00:09:02 touting the strength of the analysis. So he's gotten some attention for that. For investors, backing a company with a teenage founder can come with its own challenges. Katie says that after a general partner at Google Ventures met with a team of young founders, he had some doubts. He had met with three young founders, and one of them was 17, and he started to think about, okay, if we're going to invest in this firm, I probably need to talk to the 17-year-old's parents and have a conversation about, is he emotionally prepared for some of the struggles that are going to be likely to come into his life? To hear more from Katie, check out yesterday's episode of Tech News Briefing. And that's what's news for this Wednesday. Today's episode was produced by Daniel Bach and Haddie Moyer with supervising producer Tali Arbell. I'm Alex Osala for the Wals

Starting point is 00:09:47 Journal. Heads up that we're off tomorrow for Christmas. After that, we'll be publishing just one show a day through January 2nd, and we'll be back with a new episode on Friday. Thanks for listening.

WSJ What’s News - What This Year’s Dealmaking Boom Means for 2026

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