Election's end means more M&A, corp comms work

NEW YORK: President Barack Obama's re-election removed some uncertainty in the business landscape and could lead to increased opportunities for financial communications professionals, PR executives say.

NEW YORK: President Barack Obama's re-election removed some uncertainty in the business landscape and could lead to increased opportunities for financial communications professionals, PR executives say.

Some corporate communications execs are predicting an uptick in investments and deal making now that the election's outcome has been determined. They say many companies were more cautious during the campaign, when the country's political future, and its impact on business, was unclear.  

“The good news is that President Obama's re-election has eliminated an element of uncertainty for the financial community and financial services firms in particular,” says Marc Drechsler, SVP and global head of financial communications at Ketchum. “Pent up demand for transaction-related services may increase as some businesses have put certain investments on hold while awaiting clarity on the political front. In that sense, many postponed projects could be unlocked in the next couple of quarters to the benefit of overall economic activity, and therefore increased demand for financial communications services.”

Amanda Levin, editor for the Americas at Mergermarket, says mergers and acquisitions could increase after Obama's re-election, but not as much as they might have had GOP candidate Mitt Romney won. Romney was perceived by many corporate leaders to be more business-friendly, she adds.

“The fact that we now have some certainty could drive deals in and of itself,” Levin says. “M&A activity could've been much more robust had Romney won, but now that we have Obama for another four years, I don't think that we'll see a flood of activity. Even still, having some certainty at this point is going to help companies plan, and that's really critical.”

However, Elizabeth Saunders, Americas chairman in the strategic communications practice at FTI Consulting, says the election result will not significantly impact M&A activity because global economic health is a bigger factor.

“I think people forget that so much M&A activity is now cross-border. While Obama was a much-beloved candidate to many people outside the US, it doesn't affect them from a financial basis,” Saunders says.  “Other international elections and the resolution of those will help us answer the M&A question, especially where cross-border activity is going on.”

FTI Consulting's strategic communications unit reported a revenue drop of 11.6% year-over-year to $45.8 million in the third quarter of 2012, which it attributed partly to fewer mergers and acquisitions in the period. Overall, the US M&A market fell 18.6% between January 1 and September 30, 2012, and the global M&A market shrank 17.4% during the period, according to the Mergermarket League Tables of PR Advisers.

For some corporate communications executives, Obama's reelection means business as usual for the next four years, but there will be opportunities to help companies navigate new regulations and other corporate issues, Saunders and others say.

“Now you've got Obama in a comfortable position for the next four years to follow through on his agenda. It's very clear that part of his agenda is regulatory action in the energy, healthcare, and financial services realms,” Saunders says. “If we have real value to add, it's in helping companies get their message out in Washington, manage relationships with influencers, and explain to investors the impact of potential regulations in Washington.”

Rachel Spielman, EVP and head of the corporate communications group at Ruder Finn, says another Obama term will not “change things too much” for corporate communications professionals. More pressing to her team, she says, is the issue of corporate citizenship, especially in the aftermath of Hurricane Sandy and as the holidays approach.

“We're in the same place we were yesterday,” she says. “We have been talking with all of our clients about the importance of being a good corporate citizen, in terms of donations but also in how they train talent. So many companies have been talking about this now, and I think it's on everyone's minds a little bit more.”

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