Buffett, a well-known value investor, has typically bought when companies run out of favor, but his move this time around may be a play on the potential loosening regulations on M&A activity in the financial space after a prolonged dry spell.
“Berkshire also boosted its stakes in regional lenders, including PNC Financial Services Group Inc. and U.S. Bancorp. That could be a bet on consolidation in the industry, as this month’s announced merger between SunTrust Banks Inc. and BB&T Corp. has led to speculation that more deals are coming,” according to a note.
The number of deals blocked by regulators are on the decline across the U.S., the E.U., Brazil, South Africa, Australia and Turkey, with only seven deals blocked last year, compared to 68% from the year before, the Wall Street Journal reports.
“After a bumper year of enforcement in 2017, it appears that the landscape may now be beginning to stabilize,” more in line with levels in 2015 and 2016, Allen & Overy lawyers Antonio Bavasso and Louise Tolley wrote in a report.
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