Mergers & Acquisitions Archives - Page 24 of 49

Mergers & Acquisitions

Office Supplies Surprise: FTC Approves Office Depot-OfficeMax Merger

by Emily Townsend | Nov 7, 2013 | FTC Developments, Mergers & Acquisitions

On Friday, November 1, 2013 the Federal Trade Commission (FTC) ended a seven-month investigation of the proposed merger between Office Depot Inc. and OfficeMax Inc., allowing the transaction to move forward.

The merger between the second and third largest office supply superstores (OSS) is not the first time the FTC has been interested in OSS transactions. In 1997, the FTC successfully blocked a proposed merger between the two largest OSS in FTC v. Staples, Inc., 970 F.Supp. 1066 (D.D.C. 1997). The FTC’s seemingly contradictory positions can be discerned, however, by the changes in the competitive landscape for OSS.

As acknowledged in the FTC’s statement concerning the proposed merger, OSS now compete with online retailers and mass merchants far more than in 1997. In fact, in Staples, the court determined that while mass merchants, wholesale clubs and mail order firms sold office supplies, prices at OSS were primarily affected by the presence of another OSS in the geographic market. Because of this determination, the FTC was successful in arguing that the relevant product market was the sale of consumable office supplies just through OSS.

Now, OSS compete rigorously with the growing number and size of online retailers and mass merchants. As the FTC found, OSS “closely monitor” and “respond competitively” to non-OSS retailers. Indeed, the FTC noted that OSS are responding to such competition not only through staples of competition such as price matching and price-checking, but also through innovation, such as “offering in-store pickup for online purchases and using in-store internet kiosks to order products online.”

The rapidly changing landscape in the consumable office supplies market is highlighted by two contrasting outcomes sixteen years apart. It highlights the importance of staying abreast of how changes in market dynamics and modernizing competition law may affect regulators’ view of potential transactions. As exemplified in this case, such knowledge can lead to a successful evaluation of a transaction that was previously thought to be impossible.

China’s MOFCOM Launches Electronic Merger Filing System

by Emily Townsend | Oct 28, 2013 | Chinese Developments, Mergers & Acquisitions

Beginning on October 28, 2013, all merger control cases before China’s Ministry of Commerce (MOFCOM) will have to be filed, and only be filed, in electronic form. In the past, it was required by MOFCOM to provide both hard and soft copies (i.e., paper or scanned copies) of all materials submitted. The new filing system uses software developed by MOFCOM itself (System) that incorporates a digitalized merger notification form updated by MOFCOM in June 2012 (please see “China Streamlines Antitrust Notification Process” https://www.mwechinalaw.com/news/2012/chinalawalert061c.htm).

The System appears to work well. Generally, the System allows a filing party to submit all data and information required by MOFCOM in electronic form (i.e., either by typing into or choosing an option in the software). A data package, incorporating all data and documentation submitted in support of the filing, will be generated by the software automatically.

The launch of this new System is unlikely to change the procedure of merger filing to any great extent. However, it does allow MOFCOM to collect and compile data in a much more efficient and timely manner. This new System also allows MOFCOM to much more easily compare information provided by others in the same or a similar industry, and to compare information submitted by the same party in different cases. The new System will therefore require a higher level of vigilance by notifying parties to ensure they provide accurate and consistent information. Also, counsel practicing in this area can expect to see an improvement in efficiency, and likely more sophisticated assessment by MOFCOM of mergers, acquisitions and joint ventures, as this new tool should help with data analysis.

Support for Airlines Merger Grows

by Young Cynn | Oct 25, 2013 | DOJ Developments, Mergers & Acquisitions

Mayors from Charlotte, Chicago, Dallas, Fort Worth, Philadelphia, Phoenix and Miami-Dade County wrote to Attorney General Eric Holder on Wednesday, urging him to allow American Airlines Inc. and U.S. Airways Group Inc. to merge. The mayors encouraged the Justice Department to “reconsider [the] ill-conceived lawsuit,” and asserted that the deal would benefit both consumers and their respective communities where the largest hubs for the two airlines are located. “Without this merger,” the letter continued, “American and U.S. Airways will be at a permanent competitive disadvantage to Delta and United, each of which has been allowed to build superior route networks through mergers that were cleared by the Justice Department.” The letter comes one week after 68 House Democrats, led by legislators from Texas and Arizona – home to American and U.S. Airways headquarters, respectively – wrote a similar letter of support to President Barack Obama, pressing him to call off the lawsuit. The Justice Department and seven state Attorneys General sued to block the $11 billion merger back in August, but the Texas Attorney General dropped out of the lawsuit earlier this month.

Assistant Attorney General Addresses Antitrust Remedies in First Formal Remarks

by Emily Townsend | Oct 16, 2013 | Cartel Enforcement, DOJ Developments, Mergers & Acquisitions

On September 25, 2013, Assistant Attorney General Bill Baer gave his first formal remarks since becoming head of the Antitrust Division at the United States Department of Justice (DOJ) in January. Speaking at Georgetown Law’s Seventh Annual Global Antitrust Enforcement Symposium, Baer’s address was entitled “Remedies Matter: The Importance of Achieving Effective Antitrust Outcomes.”

Baer emphasized that achieving a remedy that preserves or restores competition is more important than the government winning a particular lawsuit. He then addressed remedies in four contexts: merger remedies, civil non-merger remedies, civil disgorgement and criminal remedies.

Regarding mergers, Baer said that the DOJ “should only consider remedies that effectively resolve the competitive concerns and protect the competitive process.” He indicated that some deals are nearly unfixable and noting that litigation is not DOJ’s preferred option, Baer warned that reaching a consent decree takes time and cautioned parties against waiting until late in an investigation to engage the DOJ in negotiations. The proposed acquisition of Grupo Modelo by Anheuser-Busch InBev initially included a component addressing antitrust concerns, but the DOJ wanted more. Baer used the consent decree in that matter to highlight important provisions in “an effective merger remedy:” structural relief, a fully-vetted up-front buyer, a monitoring trustee and a conveyance of intellectual property and know-how.

For civil non-merger remedies, Baer pointed to the e-books litigation involving Apple and five of the six largest publishers in the United States. In prosecuting Apple for its role in the civil price-fixing conspiracy, DOJ was seeking a remedy “that would stamp out any lingering effects of the conspiracy,” prevent similar conduct in the future, and ensure Apple’s compliance, with “success … measured not by [DOJ’s] ability to prove the violation, but rather by the effectiveness of the remedies … obtained.” Baer believes the final judgment accomplishes this through antitrust compliance requirements, including an external compliance monitor.

Baer said that civil disgorgement is appropriate where an offending party would have otherwise “retained the monetary benefits of its anticompetitive conduct.” He also indicated that it would be a remedy considered in both merger and conduct cases. Pointing to the “broader legal landscape” and what some observers see as hurdles in private antitrust cases, Baer said that the DOJ would take into account the likelihood of success in private actions when it fashions its public remedies.

For criminal remedies, Baer discussed DOJ’s prosecution of AU Optronics Corporation, its U.S. subsidiary and two top executives for a criminal price-fixing conspiracy. The remedy included a $500 million fine, probation and an independent monitor to oversee an antitrust compliance program.

Baer appears open to developing creative remedies to achieve outcomes the agency finds most effective in “remedy[ing] anticompetitive conduct and guard[ing] against any recurrence.” Throughout the speech he emphasized the use of external monitors (the costs of which are borne by the offending parties) and difficult remedies to “fix” past offenses, including disgorgement and unwinding consummated mergers.

Tweet: No Antitrust Problems Here

by Emily Townsend | Oct 7, 2013 | FTC Developments, Mergers & Acquisitions

by Lincoln Mayer

The Federal Trade Commission (FTC) has approved social media heavyweight Twitter’s $350 million stock acquisition of MoPub. Twitter’s purchase of the mobile advertising exchange, which helps companies place ads on mobile devices, is expected to enhance Twitter’s ability to tailor mobile ads to users. The size of the deal triggered the Hart-Scott Rodino (HSR) Act’s mandatory filing requirement, but the FTC concluded that the acquisition posed no anticompetitive obstacles.

This high-profile transaction is a reminder of the value of good planning and involving antitrust counsel early in the planning process, even where the parties do not anticipate significant antitrust issues. With enough advance warning, counsel can work with the antitrust agencies to showcase the procompetitive aspects of the transaction, mitigate any problematic aspects and seek rapid clearance of deals that, at least from a competitive standpoint, are relatively straightforward. In Twitter’s case, that meant being able to resolve a potential regulatory issue involving its largest acquisition to date before the launch of Twitter’s initial public offering.

FTC and DOJ Accepting HSR Filings During Shutdown

by Emily Townsend | Oct 1, 2013 | DOJ Developments, FTC Developments, Mergers & Acquisitions

by Gregory Heltzer

The Federal Trade Commission (FTC) and Department of Justice (DOJ) both announced that they will have limited staff on hand to accept Hart-Scott-Rodino (HSR) premerger notification filings during the U.S. federal government shutdown. The HSR Act requires that parties subject to the Act must wait 30 days before closing their transaction. This waiting period provides the agencies with time to determine whether to challenge a transaction prior to closing. During the shutdown, the FTC will continue HSR investigations to the extent that “a failure by the government to challenge the transaction before it is consummated will result in a substantial impairment of the government’s ability to secure effective relief at a later time.” (See, FTC Shutdown Plan.) Likewise, the DOJ will also prepare cases that must be filed due to expiration of the HSR waiting period. (See, DOJ Shutdown Plan.) We will provide updates if and when we learn more regarding the protocols for merger review during the shutdown.

FTC Reaches Unique Settlement with Phoebe Putney Health System Resolving Lengthy Hospital Merger Challenge

by Emily Townsend | Aug 28, 2013 | FTC Developments, Healthcare Antitrust, IP Antitrust, Mergers & Acquisitions

by Carrie G. Amezcua and Stephen Wu

The U.S. Federal Trade Commission (FTC) and Phoebe Putney Health System settled the FTC’s complaint that the health system’s merger with Palmyra Park Hospital violated the antitrust laws. Unique state statutes and regulations effectively prevented the FTC from obtaining its usual remedy for unlawful mergers or acquisitions, a divestiture. Instead, the FTC is requiring Phoebe Putney to provide prior notice of certain future acquisitions and prohibiting it from objecting to state applications by competitors to enter or expand in the marketplace.

To read the full article, click here.

Antitrust and Healthcare: A Comprehensive Guide

by Emily Townsend | Jul 9, 2013 | Healthcare Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

McDermott Will & Emery is pleased to announce the publication of Antitrust and Healthcare: A Comprehensive Guide, First Edition. This new publication, produced by American Health Lawyers Association provides invaluable “practice pointers” to help healthcare industry participants, and their counsel, minimize antitrust risk and more successfully plan and execute business and litigation strategies. McDermott partner, David Marx, Jr., co-authored this first edition with Christine L. White and Saralisa C. Brau of the Federal Trade Commission. The authors draw on their significant government enforcement and private-sector counseling and litigation experience to explain the application of antitrust principles to the different segments of the healthcare industry and the specific issues they confront. Health care lawyers and antitrust practitioners will find this new guide a complete resource for representing all types of organizations including healthcare providers; commercial insurance companies and managed care organizations; for-profit, not-for-profit, and government-owned or controlled concerns; self-insured employers; and professional partnerships. Sections covered include:

Antitrust Overview
Mergers, Acquisitions, and Issues of Legality
Premerger Notification and Transaction Planning
Joint Ventures
Provider Networks and Managed Care Contracting
Trade Associations and Group Purchasing Organizations
Medical Staff Privileges, Exclusive Physician Contracts, and Peer Review
Monopolization
The Robinson-Patman Act
Exemptions and Immunities

The full table of contents can be viewed here. To purchase the book, click here.

American Airlines, US Airways Merger Faces Additional Challenges

by Emily Townsend | Jul 8, 2013 | Mergers & Acquisitions

by Megan Morley

Last week, the proposed merger of American Airlines and US Airways faced additional scrutiny when nineteen states joined the U.S. Department of Justice’s investigation of the pending transaction. Greg Abbott, Texas Attorney General, is leading the effort on behalf of a group of attorneys general from states including New York, California and Florida. This move by the states comes after the Government Accountability Office released a report last month that concluded the merger would reduce competition by eliminating an effective competitor in 1,665 routes.

Additionally, 40 consumers filed a suit against the airlines in the Northern District of California this week seeking to stop the merger. Ford, et al. v. US Airways Group, et al., case number 13-cv-3041. The complaint alleges that the deal would lead to anticompetitive effects that harm consumers, such as additional charges for amenities normally included in the ticket price, a decline in the quality of service, and the reduction of the number of flights. It also notes previous consolidations in the airline industry, including the Delta Air Lines and Northwestern Airlines merger in 2008, and claims these prior transactions caused similar anticompetitive effects. Plaintiffs argue that the combination would create the largest airline in the world and that the airline would control almost 25 percent of the U.S. market. US Airways called the suit “without merit” and believes that the deal will be successfully concluded in the third quarter.

This private action brought against the airlines serves as a reminder that any merger under review by a government agency, especially high-profile deals, faces potential follow-on civil suits. Companies contemplating a transaction should understand this risk and should be prepared to respond quickly against the allegations to successfully defend the merger.

$720,000 Civil Penalty for Failure to File HSR

by Emily Townsend | Jun 21, 2013 | DOJ Developments, FTC Developments, Mergers & Acquisitions

by Carla A. R. Hine

Today the Department of Justice (DOJ), on behalf of the Federal Trade Commission (FTC), announced a settlement with MacAndrews & Forbes for failing to file Hart-Scott-Rodino (HSR) in connection with the acquisition of voting securities of Scientific Games (SG). MacAndrews & Forbes, which is a wholly-owned holding company of Ronald Perelman, will pay $720,000 for failing to file HSR.

MacAndrews & Forbes had filed HSR and observed the waiting period for a prior acquisition of SG voting securities. Under the HSR Rules, a buyer that has filed HSR and observed the waiting period can continue to acquire voting securities of an issuer valued up to the next notification threshold for a period of five years following expiration of the HSR waiting period. (The relevant notification thresholds in acquisitions of less than 50 percent of the voting securities are $50 million, $100 million and $500 million, each of which are adjusted annually.) However, if the buyer will pass the next notification threshold, or acquire additional stock after the five year period expires, a new HSR filing is required. The HSR size-of-transaction is determined by valuing what a buyer will hold as a result of the transaction. In other words, the buyer needs to look at the value of the voting securities of an issuer it currently holds aggregated with the value of the stock it will acquire. The value of publicly traded stock, such as SG’s, is determined by looking at the lowest closing quotation price in the preceding 45 calendar days. As such, if a stock goes up in value over time, even acquisitions of small tranches of shares can put an acquiring person above a notification threshold.

That is what happened in MacAndrews & Forbes’s case. It had filed HSR in February 2007 and the five year period in which it could make additional acquisitions expired when it acquired an additional 800,000 shares, valued at $6.5 million, in June 2012. This acquisition, when aggregated with the value of SG stock MacAndrews & Forbes already held, exceeded the filing threshold. MacAndrews & Forbes realized the inadvertent failure to file, and submitted a corrective filing in September 2012. The takeaways here are to remember that HSR thresholds consider both what a buyer already holds in addition to what else it will acquire, and that subsequent potential HSR obligations need to be monitored over time.

To view the press release, click here.

To view the complaint, click here.

Older Posts »

« Newer Posts

BLOG EDITORS

Gregory E. Heltzer

BLOG EDITORS

STAY CONNECTED

TOPICS

ARCHIVES

RECENT POSTS