Mergers & Acquisitions

What Happened:

  • On May 7, 2019, Governor Jay Inslee of Washington State signed House Bill 1607 into law. The law goes into effect for transactions closing after January 1, 2020, and requires advance notice to the Washington Attorney General (AG) of certain transactions 60 days in advance of closing the transaction. The intent of the law is “to ensure that competition beneficial to consumers in health care markets across Washington remains vigorous and robust[.]”
  • Parties must file written notice with the AG for any deal that involves two or more hospitals, hospital systems, or other provider organizations that represent seven or more health care providers in contracting with insurance companies or third-party administrators. A “provider” includes a physician, nurse, medical assistant, therapist, midwife, athletic trainer, home care aide, massage therapist, among others.
    • The law can apply to transactions involving very small medical groups, as long as there are seven providers who contract with insurance providers. The law can also apply to transactions with non-Washington parties if the out-of-state party generates $10 million or more in revenue from Washington patients.
  • Given the relatively low thresholds for an AG filing, this law would require notifications for transactions that are not reportable under the Hart-Scott-Rodino Act (HSR Act), as well as those that are reportable under the HSR Act.
    • If a transaction is HSR reportable, the parties must submit their HSR filing to the AG.
    • If a transaction is not HSR reportable, parties must submit the following information in writing to the AG:
      • The names and addresses of the parties;
      • The locations where health care services are provided by each party;
      • A brief description of the nature and purpose of the proposed transaction; and
      • The anticipated effective date of the transaction.
    • The notification requirement applies to mergers, acquisitions and contracting affiliations. A contracting affiliation is a “formation of a relationship between two or more entities that permits the entities to negotiate jointly with carriers or third-party administrators over rates for professional medical services” but does not include arrangements among entities under common ownership.
    • The penalty for noncompliance is $200 per day.
    • The AG has 30 days from the date of notice to submit a request to the parties for additional information. If the AG has antitrust concerns, it may serve a civil investigative demand to investigate.


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What Happened:

  • The Federal Trade Commission (FTC), along with the Antitrust Division of the Department of Justice (DOJ), approved amendments to the Hart-Scott-Rodino (HSR) Rules and the instructions for completing the HSR Form.
  • After the amendments take effect on September 25, 2019, HSR filers will be required to use new 10-digit North American Product Classification

2018 saw a significant upswing in antitrust litigation against health care providers; 27 cases were filed in 2018 versus 17 in 2017. In the latest Antitrust Update for Health Care Providers, we discuss what caused the notable rise, what kinds of cases were brought over the past two years and how they were decided,

The first quarter of 2019 proved to be as active as ever for antitrust regulators in both the United States and Europe. In the United States, vertical merger enforcement was the focus of a few high-profile matters. The US DOJ has been working on an update to the Non-Horizontal Merger Guidelines, possibly providing clarification for

Antitrust regulators in the United States and Europe were very active in the final quarter of 2018 closing a large number of cases requiring in-depth investigations. In the United States, regulators continue their focus on the potential need to update their methods of reviewing high-tech transactions with public hearings on the future of antitrust enforcement.

The US Federal Trade Commission’s (FTC) Bureau of Competition announced the launch of a new Technology Task Force that will investigate anticompetitive conduct, review past transactions, as well as contribute to pending merger reviews. The FTC’s investigation of consummated transactions will not be limited to large transactions that meet the HSR filing thresholds, but will

The US Department of Justice (DOJ) recently sued former joint venture partners because they allegedly coordinated their competitive activities beyond the legitimate scope of their venture. This case illustrates several important points. First, companies who collaborate through joint ventures and similar arrangements need to be mindful that any legitimate collaborative activity does not “spill over” to restrain competition in other unrelated areas. Second, DOJ discovered the conduct during its review of documents produced in connection with a merger investigation. This is the most recent reminder of how broad ranging discovery in merger investigations can result in wholly unrelated conduct investigations and lawsuits. Third, one of the parties was a portfolio company of a private equity sponsor, highlighting how private investors can be targeted for antitrust violations.
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McDermott’s Annual EU Competition Review summarizes key developments in EU competition rules. During the previous year, several new regulations, notices and guidelines were issued by the European Commission. There were also many interesting cases decided by the General Court and the Court of Justice of the European Union. All these new rules and judicial decisions

On 16 January 2019, the Court of Justice of the European Union (CJEU) dismissed the appeal by the European Commission (Commission) against the 2017 judgment of the General Court of the European Union (GCEU). This annuls the Commission’s decision to block the proposed acquisition of TNT Express NV (TNT) by United Parcel Services (UPS) in its entirety (C-265/17 P). The judgment reminds the Commission that it must maintain a balance between the need for speed and the observance of the rights of the defence in merger proceedings.

IN DEPTH

Background

By decision on 30 January 2013, the Commission blocked the proposed acquisition of TNT by UPS (Case M.6570).

On 7 March 2017, the GCEU annulled the Commission’s decision in its entirety on the grounds that (i) the Commission infringed UPS’s rights of defence by failing to communicate to UPS the final version of an econometric model on which it relied in its prohibition decision and that (ii) UPS might have been better able to defend itself if it had at its disposal the final version of that model.

The Commission challenged the GCEU judgment before the CJEU. First, the Commission argued that it was not required to communicate the final econometric analysis to UPS. Second, the Commission claimed that even if UPS’s rights of the defence had been infringed, the GCEU should have dismissed UPS’s plea alleging infringement of the rights of the defence as ineffective because a significant impediment to effective competition (“SIEC”) could in any event be established in Denmark and the Netherlands without having to rely on the econometric model concerned.


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On January 31, the Board of the Mexican Competition Authority—the Federal Economic Competition Commission (COFECE)—approved REMY Holdings International’s acquisition of BorgWarner’s vehicle aftermarket business. However, the companies failed to file and were fined for their misconduct (~$153,134). The fine was less severe because the parties voluntarily acknowledged their failure to notify COFECE.

WHAT HAPPENED:

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