Blog Posts Tagged with Merger

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Got questions about the HSR Rulemaking? We’ll answer them live (virtually).

The FTC welcomes comments on its recent HSR Rulemaking initiative, and to facilitate a robust and thoughtful set of public comments, the Commission is holding a series of three live virtual workshops in November to answer the public’s questions before comments are due. 

A Fiscal Year Like No Other

With the conclusion of FY2020, we look back on a year unlike any other in the history of the Bureau of Competition.  The year has been marked by a combination of exceptional commitment from the Bureau’s staff, enforcement achievements that would be remarkable in any year but which are nothing short of incredible in this one, and a string of enforcement and policy successes.

Seeing the whole picture on avoidance devices

Under the Hart-Scott-Rodino (HSR) Act and Rules, parties cannot use a transaction structure for the purpose of avoiding or delaying their premerger filing obligation.  If they do, the Commission must ignore the structure and review the substance of the transaction as a whole to determine whether an HSR filing is required. Premerger Notification Office (PNO) staff have recently rethought some prior advice, and today PNO is withdrawing a 2003 informal interpretation relating to special dividends.

Real deadlines and real consequences

Recently, Alimentation Couche-Tard and CrossAmerica Partners (collectively ACT) agreed to pay a $3.5 million civil penalty to settle allegations that they violated a Commission divestiture order that was designed to prevent their merger from harming consumers.  A close read of the Commisson’s action in this case yields some timely advice for any company that is subject to a divestiture order.

Eyes Wide Open: There are no blinders in merger reviews

The FTC's Bureau of Competition sometimes reviews proposed mergers against the backdrop of civil and criminal antitrust investigations or litigations leveled in the same industry. And at times, such investigations and litigations are leveled against the merger parties themselves. Those ongoing matters may affect our analysis of a merger, as well as the vetting of divestiture packages and proposed divestiture buyers. Even if details of such investigations are not public, Bureau staff are likely to discover their existence during our own investigation of a merger.

Real-Time Transparency for HSR Transaction Numbers

In response to increased interest in levels of M&A activity, the Bureau of Competition’s Premerger Notification Office (PNO) is responding in real-time by posting monthly figures for Hart-Scott-Rodino (HSR) Act filings.  Starting today, the PNO is posting monthly totals for the most recent six-month period, and will update the numbers on a six-month rolling basis on the PNO homepage.  While the Commission publicly reports monthly HSR transaction numbers in its

A Busy Six Months

As we head into the second half of 2020, it’s a good time to pause and take stock of the past six months of work in the Bureau of Competition.

On “Failing” Firms — and Miraculous Recoveries

Over the past few years, the Bureau has faced a surprising number of failing firm claims by merging parties. Even when the economy was booming, we heard many iterations of the same argument: The acquired firm is failing. The acquiring firm is failing. Both firms are failing (which presumably would justify the merger on the basis that if you tie two sinking rocks together, they’re more likely to float). The entire industry is failing.

HSR Filing Fees – Reminders and Tips

The PNO handles Hart-Scott-Rodino (HSR) premerger notification filings for thousands of transactions each year.  Filing fees are also required as part of the HSR premerger notification process.  Failure to pay the required fee on time will delay the HSR waiting period, but careful planning for the fee submission can help avoid most fee-related problems.  The reminders and tips in this blog will help ensure that the PNO receives and processes the HSR fee as promptly as possible.

Yes, we’re hiring another AD!

I want to thank Mike Moiseyev for his dedication and commitment to the Bureau of Competition. Mike has led the Mergers I Division for the past 16-and-a-half years, becoming Assistant Director in 2003. Mike joined the Bureau of Competition in 1989, following law school. He has managed some of the most significant cases in the Bureau during his career.

We’re hiring a new AD!

I want to thank Kevin Hahm for his work in the Bureau of Competition and, most importantly, for his contribution to our competition enforcement. Kevin, most recently, the Assistant Director for the Mergers IV Division, has been an integral part of the reinvigoration of the hospital merger enforcement efforts within the Bureau. Before becoming Assistant Director, Kevin had served as Deputy Assistant Director of the Mergers IV Division.

Antitrust review at the FTC: staying the course during uncertain times

As we navigate uncharted waters in our work and home lives in response to the COVID-19 pandemic, a few changes have happened quickly.  We claimed “home office” space to take on the challenges of working remotely.  Bureau of Competition staff shifted from in-person meetings to conference calls, made from unlikely venues (such as couches) without all the usual professional trappings (sweatpants optional, children entirely possible).

HSR threshold adjustments and reportability for 2020

When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.

The closest competitor is not the only competitor

More and more, merging parties argue that their merger does not raise competition concerns because they are not each other’s closest competitors. Parties have advanced this argument even in markets where there will be only two or three remaining firms post-transaction, including the merged firm. This argument is not new, and it often misunderstands merger analysis.

Avoidance devices won’t avoid HSR penalties

The Commission and Department of Justice’s recent case against Canon Inc. and Toshiba Corporation for violating the Hart-Scott-Rodino Antitrust Improvements Act makes an important point: restructuring a deal to avoid or delay an HSR filing may subject the merging companies to substantial penalties if the restructured transaction still results in an acquisition by the A side.

Just because it’s ancillary doesn’t make it legal

In The Wizard of Oz, Dorothy was told to ignore the man behind the curtain. Some may argue that the same guidance applies to ancillary parts of a merger or joint venture agreement. These can include non-solicitation and non-compete provisions. Even when such provisions are ancillary to an otherwise legitimate business transaction, we will still make a determination that the restraints do not independently violate the antitrust laws by being overly broad.

Interlocking Mindfulness

The wellness strategy of the moment is mindfulness: focusing on the present and being completely aware of your situation. Even in the corporate sphere, there are good reasons for anyone in governance to take a self-assessment. Am I living in the now, what is my position in the world, am I currently violating the per se prohibition on interlocking directorates under Section 8 of the Clayton Act?

Unpacking Divestiture Packages

Crafting effective merger remedies is one of the Commission’s most important tasks. Done well, a divestiture prevents the competitive harm likely to result from a proposed merger and ensures that competition remains as robust as it was premerger.

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