It's a new year, and time for another batch of predictions. People love their predictions big and bold, so hopefully this year's group doesn't disappoint. I can't wait to grade ourselves at the end of the year to see how many of these actually happen...
Unprecedented M&A Activity
The second Trump administration looks likely to greatly reduce the power and oversight of the Federal Trade Commission, which enforces antitrust and consumer protection laws. 2025 may be the year that many big corporations force through deals that in ordinary years might be hindered by anticompetitive oversight.
CDK & Reynolds Merge
In any ordinary year, it would be inconceivable that two big industry players like CDK and Reynolds could merge. Brookfield paid approximately $8.5 billion for CDK Global in 2022, the largest transaction in the auto retail sector in history. At some point, Bob Brockman’s estate holders will want liquidity.
VW Acquires Rivian
VW and Rivian announced a new $5.8 billion joint venture last year to create cutting-edge software to co-develop both vehicle software and EV technologies. Why would VW develop the new Scout brand separately? The vehicles even look eerily similar.
GM and Ford Merge
If we’re going to talk blockbuster deals, why not merge the two big legacy American automakers? Under existential threat from the Chinese, at the very least there should be huge cost synergies from a combination.
BYD Acquires Stellantis
How does BYD, destined to be the largest automaker in the world, get access to the U.S. market in a world of 100% tariffs? Why not acquire struggling Stellantis, and inherit 2,600 U.S. dealerships?
IPO Market Opens
In parallel the M&A environment roaring back to life, so will the IPO market. The SPAC overhang has been heavy, but we’re overdue for a healthy IPO market to finally arrive. Which means that many of the late-stage VC- and PE-backed companies will be more than happy to go public.
Carfax Goes Public
S&P Global considered selling off their Mobility division last year. The crown jewel would be Carfax, which could be an attractive stand-alone public offering. According to Reuters, revenue from S&P’s mobility segment totaled $1.4 billion in 2023. The unit made adjusted operating profit of $576 million in 2023, up 9% from the year before.
J.D. Power Goes Public
J.D. Power hired a banker in early 2024, expecting to sell for about $8 billion. The deal never happened. Thoma Bravo acquired J.D. Power in 2019 for about $1.9 billion. It merged it with Autodata Solutions and went on to acquire nine companies, taking its overall revenue to ~$900 million.
Solera Goes Public
The data and software company backed by Vista Equity Partners has considered going public a few times. Vista led a group of investors that took Solera private in 2016, in a deal valuing the company at about $6.5 billion. 2025 will be the year that the company goes public.
Amazon Expands to 10 OEMs
Amazon did have plans to expand to additional OEMs on the program (beyond just Hyundai) by the end of 2024. Instead, we got a late year announcement that they’re now in 50 states, but only with the Hyundai brand. 2025 will be the year where we see penetration into multiple other OEM brands.
Foxconn as the Next Disruptor
Foxconn, the world's largest electronics contract manufacturer (including the iPhone), has developed several electric vehicles (EVs) through its Foxtron brand. Foxconn has also purchased a former General Motors plant in Ohio. Could Foxconn be the auto industry disruptor that isn’t yet on the radar?
