The Fastest Way to Get Past Antitrust Reviews? Slow Down

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By Michael Greene

Oct. 19 — The quickest and most efficient way for companies to get mergers through the antitrust process may be to slow things down, a top Federal Trade Commission official said.

Deborah Feinstein, director of the FTC's Bureau of Competition, said companies anxious to get deals done have engaged in inappropriate information sharing or started acting like one organization before the antitrust process is completed.

Feinstein, speaking Oct. 17 at the Association of Corporate Counsel’s annual meeting in San Francisco, warned companies against “gun jumping.” The term is used by antitrust lawyers and regulators to describe the improper sharing of competitively sensitive information and the premature merging of companies.

There are appropriate ways to start planning for post-closing, and companies can't take steps that are unlawful, Feinstein said.

The FTC official added that approaching antitrust authorities early may help a merger pass the review process more efficiently even if doing so may make it feel as if things are slowing down.

Be Consistent

For global transactions, Feinstein told the ACC audience that companies should get their deal teams together early and have a consistent approach for engaging with regulators around the world. “We talk to each other” and know if a company is saying different things to other antitrust enforcers, she said.

Feinstein also said some companies have described their industries differently in offering memoranda than what is told to antitrust authorities. Many of these companies say their investment bankers wanted the memo to be phrased in a certain way to ensure the company can fetch a better price, she said.

“Well, that's not what you told the world when you were trying to sell the business, so I have to believe” the offering memo, Feinstein said. “If that’s not the case, then somebody has to rein in the bankers.”

It is important to get the facts straight, and transaction teams must determine the real conditions in their industries, Feinstein said. This concept that companies can say one thing to get the most money for their business, and something else to get their mergers through the antitrust process isn't going to work, she said.

The bureau has been especially aggressive in the pharmaceutical and health-care industries. According to Bloomberg Law data, pharma deals are challenged at a much higher rate than other mergers reported to the FTC, but ultimately have been approved with a consent order rather than blocked (109 CARE, 6/7/16).

Among other high-profile transactions, the bureau is set to review China National Chemical Corp.'s proposed $43 billion acquisition of Syngenta AG amid lawmakers' call for higher scrutiny of agricultural deals (160 CARE, 8/18/16).

To contact the reporter on this story: Michael Greene in San Francisco at mgreene@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

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