This Mayer Brown memo provides an overview of the significant changes that the Biden Administration is attempting to make when it comes to antitrust regulation of M&A. Interestingly, while the memo recounts the very aggressive actions that the antitrust agencies have taken in litigation and in proposed changes to the HSR form & Merger Guidelines, it also raises the possibility that the DOJ & FTC may be pulling back from their publicly announced aggressive enforcement positions. This excerpt explains:
Could the agencies be pulling back from their publicly stated aggressive enforcement position? As mentioned above, the agencies have faced tough sledding in court, where government losses have far outnumbered the wins. In addition, importantly, the courts have endorsed the traditionalist approach of favoring settlements that address competition concerns without necessarily blocking a deal outright. While it is too early to tell, the FTC’s recent settlements of ICE/Black Knight and Amgen/Horizon through more traditionalist-style remedies could signal a less confrontational approach to antitrust review going forward.
There are other signs that the agencies may be tempering their views. For example, an FTC official recently discussed the draft Merger Guidelines and suggested that the final version will be amended to make clear that the agencies will consider merging parties’ arguments that a transaction’s increase in concentration will not necessarily harm competition.
Finally, the Merger Guidelines are just what their title states – guidelines, not law. Courts do not have to follow the agencies’ pronouncements on how the agencies review mergers. Courts will follow the law and facts, and as made evident by the agencies’ recent losses, courts do not mechanically defer to the government’s position.
The memo also addresses the implications for dealmakers of the aggressive positions taken to date by the DOJ & FTC, including their impact on deal terms. It also makes the point that although the agencies have taken a hard line publicly, the vast majority of deals are still clearing antitrust review. It points out that the agencies opened initial investigations into 270 deals, which represented just under 8% of HSR reportable transactions. Second requests were issued in only 65 deals and, ultimately, only 32 deals were stopped. That’s less than 0.1% of reportable transactions.