Settling Merger Cases


In almost every merger, the goal is to convince the government not to bring a case challenging the transaction, rather than to win the case in court . Most merger investigations are resolved through the parties convincing the government that the apparent problems do not stand up to analysis. When that fails, the parties may offer to settle the investigation in a manner that satisfactorily addresses the governments concern but permits the transaction to proceed, normally with certain socalled curative divestitures. These settlements are embodied in consent decrees at both the FTC and DOJ.

There are a number of important strategies to successfully negotiating consent decrees with the federal antitrust authorities.

The consent decree negotiation process can take a relatively long time and delay consummation of a merger while it is ongoing. As a result, it is important that the antitrust lawyer and client communicate clearly from the outset so that the lawyer understands and can help the client to accomplish its strategic objectives. The lawyer needs to find out what the client is trying to accomplish, and to help the client weigh the consequences of delay in completing the deal against the costs of various parts of the potential settlement that the staff is seeking. The lawyer needs to identify objectively for the client what type of divestiture package clearly wont work and will cause delay if sought to be pursued as opposed to a package upon which there is a reasonable prospect of prevailing.

Protracted consent decree negotiations will delay consummation of the merger, deferring the attainment of synergies in the overall deal (not just the part that raises competitive problems). These synergies may be much more significant to the client than avoiding the divestiture of a few more assets to get the settlement completed sooner.

Be familiar with processes and practices employed at the FTC and DOJ respectively. While the approaches of the two agencies are broadly similar, there are real and important differences. For example, the FTC frequently requires an up-front buyer settlement, one that requires the parties to first find a buyer for the assets to be divested and enter into a contract for the divestiture so that the merger and the divestiture are completed contemporaneously or in close proximity. The DOJ rarely imposes a buyer up- front approach.

Understand the typical terms that the FTC or DOJ insist upon in their consent decrees what is frequently referred to by agency staffs as the boilerplate in a consent decree. It is possible for parties to get bogged down arguing with staff on points that the reviewing agency is unlikely to change because the provision in question is the norm in many prior deals. Avoid fighting over terms that are not going to be changed by the agencies. Conversely, a good working knowledge of the normal consent decree provisions will allow you to know when the staff is overreaching so that you pick the right issues to fight on.




Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
ISBN: N/A
EAN: N/A
Year: 2004
Pages: 102

flylib.com © 2008-2017.
If you may any questions please contact us: flylib@qtcs.net