The Antitrust Agencies' Recent Merger Challenges: Is the Remedial Tail Wagging the Dog?
In reviewing mergers and acquisitions, the Federal Trade Commission (FTC or Commission) and Department of Justice Antitrust Division (DOJ or Division) devote significant attention and resources to scrutinizing proposed remedies designed to maintain or restore competition anticipated to be lost from a given transaction. Those efforts are to be commended in that the agencies generally allow efficiency-enhancing transactions to proceed, as modified, to the benefit of consumers and the merging parties.
Recently, however, the remedial tail may be wagging the enforcement dog, as the agencies appear to pursue increasingly demanding remedies to the mergers and acquisitions that cross their desks. That is, pursuit of more stringent remedies appears to be driving the outcome in an increasing number of cases. Several sizeable transactions have foundered for lack of an acceptable remedy. Meanwhile, the use of upfront buyers has increased significantly, with both agencies now requiring them in the vast majority of settled cases, increasing the time it takes to get from announcement to closing.
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