The most important deal of 2018 was announced more than a year ago.
AT&T and Time Warner are headed to court next month to defend their $85 billion deal, announced in 2016. The last time the government won a case challenging a vertically integrated merger, the purchase of a supplier rather than a competitor, was during the Nixon administration.
While dealmakers have plenty to be optimistic about — low interest rates, rapid transformation across all industries, tax code clarity — the case will set the tone on the Trump administration's tolerance for megadeals.
So far, advisors are progressing as if under the status quo.
"I don't think it's become clear enough as to what the hot button issues are. People seem to be operating under what have been the historic norms," said Robin Rankin, co-head of mergers and acquisitions at Credit Suisse.
If the administration breaks with a more than three-decade trend of approving vertical deals, it would force advisors to reassess all that they had previously accepted as certain. It would mean deals they previously viewed as sure to be approved could face hurdles anew.
This uncertainty would extend to Disney's proposed acquisition of $52.4 billion worth of assets from 21st Century Fox, which, though not vertical, will test the Trump administration's attitude toward movie studio combinations.
Meantime, the Trump administration has been scrutinizing other deal approvals. On Feb. 1 the Justice Department requested more information on CVS Health's plan to acquire Aetna. It has taken a harder line on deals with Chinese acquires, blocking the sale of semiconductor Latttice to Canyon Bridge Capital Partners, a private equity firm funded by the Chinese government.
"Many of us are surprised at how unpredictable the attitude toward antitrust has been under President Trump. We expected more of a Reagan approach, and what we've seen is populist. Deals people thought would sail through have attracted higher scrutiny," said Melissa Sawyer, a partner in Sullivan & Cromwell's Mergers & Acquisitions Group.