Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
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.
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 firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)