The leadership at both the US Department of Justice Antitrust Division (DOJ) and the US Federal Trade Commission have said they will refuse to, or at least will very rarely, enter consent decrees with remedies to resolve antitrust concerns about mergers, which is traditionally how many merger investigations were resolved. They have said they prefer to seek an injunction against transactions they deem anticompetitive. DOJ has not entered into a merger consent decree providing for remedies in almost 15 months, and the FTC has recently made clear that it will rarely enter such consent decrees.
For parties to transactions with potential antitrust issues, this presents a challenge: if the federal agencies are unlikely to accept a divestiture (or other remedy) proffered during the merger review process to avoid litigation, how should merging parties respond? In this note, we discuss how merging parties can navigate the agencies’ policies toward merger remedies. We focus on the potential benefits and challenges for parties seeking to employ a “fix-it-first” approach, i.e., modifying their transaction to address potential antitrust concerns—before or during the merger review process—without entering into a consent decree with the reviewing agency.
Parties interested in pursuing this strategy should work closely with experienced antitrust and corporate counsel. Members of WilmerHale’s antitrust and M&A teams are available to help parties assess the best path to achieving merger clearance. To stay updated on our writings on major developments affecting the M&A world, subscribe to the Material: WilmerHale M&A blog.
