Antitrust Issues in Acquisitions, Mergers & Other Business Arrangements
Mergers and acquisitions are often critical to the strategic direction of a company. Antitrust, however, may be a perceived or real impediment or barrier to “getting the deal done” and can involve complicated regulatory filings and lengthy reviews and investigations. Delay can mean death for a transaction’s consummation. Moreover, arrangements short of the outright sale of assets or a business, such as joint ventures and other strategic collaborations, can require ongoing communication and cooperation between competitors – heightening antitrust risks.
Thompson Hine lawyers regularly counsel clients—including buyers, sellers, targets and financial institutions—on the antitrust implications of mergers, acquisitions and joint ventures. We assess and predict how investigating enforcers will view a particular deal in a particular industry, and counsel clients how to shape or negotiate each deal in light of likely antitrust risks. We determine what notifications need to be filed, while proactively examining exemptions from and other solutions to complex notification questions. For reportable deals, we handle premerger filings under the Hart-Scott-Rodino Act, and coordinate filings under the European Union Merger Control regulations and other foreign merger control laws. We represent clients in negotiations with the Department of Justice and the Federal Trade Commission on merger clearance issues, and, for transactions involving international assets, interact with foreign counsel on the necessary regulatory filings with competition authorities throughout the world. Now that there are more than 100 jurisdictions with antitrust review regimes, we recognize that the risk of antitrust delay or opposition is greater than ever for global businesses.
Our standard merger approach is to form a deep understanding of the clients’ business and strategy involved in the transaction. We use that knowledge, coupled with our studied understanding of the sometimes changing perspectives of government enforcers, to assess whether a proposed deal may draw extensive scrutiny, including a so-called “Second Request” or non-reportable deal investigation – an increasing risk, as demonstrated by statistics recently released by the Antitrust Division – and prepare an effective case for the transaction to proceed, minimizing such scrutiny. We manage the merger review process, rather than being managed by it. Where appropriate, we prepare presentations and economic evidence (sometimes even prior to the HSR filing), and position the company to respond quickly in the event of a full blown investigation. We move deals through effective presentations to government antitrust enforcement lawyers and economists and, if necessary, carefully negotiated consent decrees.
In addition, we counsel on integration planning and “gun-jumping” issues in M&A transactions so that clients can execute quickly to achieve their desired synergies as soon as prudent after the deal closes. For JVs or other “competitor collaborations,” we help clients develop and institute firewalls and other policies or processes to minimize risk and ensure that pro-competitive business conduct does not veer off in problematic directions.
We also represent non-parties in investigated deals. We assist them when they are called upon to give evidence or be a witness in an investigation. We monitor non-parties’ interests and look for business opportunities when merging parties choose to divest assets or otherwise enter in negotiated settlements with investigating bodies. We give arbitrage advice to investor clients who seek to understand how a particular deal will fare if investigated by competition authorities.
Listed below are representative antitrust matters in which our partners have participated.
- Representing a leading medical device company in the $175 million acquisition of an international medical systems company.
- Representing a major pharmaceutical company in connection with an agreement to transfer to another pharmaceutical company certain rights to market defibrotide in the United States and elsewhere in the Americas.
- Representing the third largest independent owner of LNG carriers and the leading Japanese independent power producer in their $1.4 billion acquisition of a global ocean carrier’s LNG shipping fleet.
- Representing 13 financial institutions, including six of the top ten U.S. bank holding companies, on antitrust issues in connection with proposed joint ventures.
- Representing an international industrial bearings manufacturer in its $125 million acquisition by a leading global supplier of bearings, seals, mechatronics, lubrication systems and services.
- Representing a Vermont electric utility in its $702 million merger with a Canadian natural gas distribution company.
- Representing a consortium of several of the leading bank holding companies in the United States as founding participants in a joint venture to provide foreign exchange aggregation services.
- Representing a leading international tobacco company in its $22.7 billion acquisition of a U.S. cigar manufacturer.
- Representing a leading international manufacturer of bearings, with approximately 76,000 employees in 180 locations in more than 50 countries, in its takeover of one of the top five automotive suppliers worldwide.
- Representing a UK-based banking and insurance company in its $10.5 billion acquisition by a UK-based global financial services group with more than 30 million customers.
- Representing one of the world’s largest beer brewing companies, which operates more than 140 breweries in 70-plus countries, in its acquisition of a UK-based beer brewing company.
- Representing one of the largest temporary staffing and employment services agencies in the world, with almost 4,200 locations in more than 40 countries, in its $5.5 billion acquisition of a Netherlands-based international staffing services company.
- Representing a leading international supplier of office products in its takeover by the world’s largest office products company and second largest internet retailer, which serves consumers and businesses throughout North and South America, Europe, Asia, Australia and New Zealand.
- Representing the UK’s #1 cigarette maker in its $1.9 billion acquisition of the fourth largest cigarette manufacturer in the United States.
- Representing one of Europe’s leading private equity investors and one of the largest investment trusts on London’s stock exchange in its sale of an international provider of air and sea freight services to a global supplier of transport and logistics solutions.
- Representing a state in investigating and preparing a preliminary injunction action related to a corporate acquisition by a global agricultural products and services provider.
- Representation of clients in premerger national security clearances (CFIUS filings under Exon-Florio; ITAR filings).
- Representing Starbucks in its acquisition of Seattle's Best Coffee Co.
- Representing a major supermarket retailer who was a key witness in the FTC's lawsuit against Whole Foods.
- Representing multiple supermarket retailers in both company-wide and store-by-store acquisitions, including providing pre-deal counseling, advocating deals to the FTC, and negotiating divestures.
- Representing a leading food and agricultural company in investigated mergers and related divestitures in food products, including chocolate and masa corn flour.
- Representing radio and outdoor advertising companies in multiple investigated deals related to series of acquisitions in various advertising markets.