USA Law and Practice Contributed by: Bradley Justus, Lisl Dunlop, Josh Jowdy and Sandhya Taneja, Axinn
ments, but may not fully reflect the preferences of the current administration. In 2022, the DOJ withdrew its parallel 2020 Merger Remedies Manual. When the Agencies determine that a horizontal merger is likely to have anti-competitive effects, the Agen - cies generally prefer structural remedies consisting of divesting an ongoing standalone business unit. Structural divestitures consisting of less than a stan - dalone business must include all assets (or licences to those assets) necessary for the divestiture purchaser to be an effective, long-term viable competitor of the merged entity. The Agencies typically require the par - ties to obtain prior approval of a contractually bound buyer for the divested assets before they will approve the consent agreement. As mentioned above, the Agencies accept behaviour - al or conduct remedies in very limited circumstances and have expressed scepticism about whether behav - ioural remedies are effective. In very rare cases, the Agencies have also pursued disgorgement of profits in consummated mergers as a remedy. The FTC’s authority to obtain disgorgement is currently in question under a recent Supreme Court ruling. 5.3 Legal Standard The FTC’s 2012 Negotiating Merger Remedies State - ment notes that “acceptable” remedies must “main - tain or restore competition in the markets affected by the merger”. The DOJ’s 2020 Merger Remedies Manual, which was withdrawn by the Biden adminis - tration DOJ, similarly states that the DOJ will insist on a remedy that preserves competition. 5.4 Negotiating Remedies With Authorities The Agencies have different procedures for accepting and finalising negotiated remedies. DOJ The parties and the DOJ staff negotiate a consent agreement in the form of a Proposed Final Judg - ment (PFJ). Once the PFJ has been approved by the Assistant Attorney General, the Agency files in federal district court a complaint, the PFJ and a competitive impact statement. The court enters a preliminary order
accepting the PFJ, which usually permits the parties to close the transaction. Under the Tunney Act, the DOJ must publish the PFJ and related materials for a 60-day public-comment period, following which it submits a report to the court that the PFJ is in the “public interest” and the court makes the PFJ final. The Tunney Act process is usually uneventful; how - ever, in one notable case (CVS/Aetna, 2019), a judge did ask the parties to hold the acquired business separate pending public comment, and conducted hearings with live witnesses before concluding that the settlement was in the public interest. FTC The parties and the FTC staff negotiate a proposed consent agreement, which must be signed by the staff and merging parties, approved by the Director of the Bureau of Competition, and approved by a majority of the Commissioners. At this point, the parties are usually permitted to close their transaction. The FTC then opens a 30-day public comment period, issuing an administrative complaint, provisional Decision and Order, and an Analysis of Proposed Consent Order to Aid Public Comment. Following the public comment period, the FTC can accept the Decision and Order as final, reject it, or revise it. 5.5 Conditions and Timing for Divestitures Conditions and Timing See 5.4 Negotiating Remedies With Authorities . Monitoring and Enforcement The Agencies monitor and enforce compliance with negotiated remedies. Where provided in the consent agreement, the Agencies may also appoint monitors to ensure the compliance and effectiveness of the remedy. 5.6 Issuance of Decisions The Agencies do not affirmatively approve proposed mergers. They simply allow the HSR waiting period to expire or terminate the waiting period early. Occa - sionally, for significant transactions, the Agencies will issue a press release when closing an investigation and/or a “closing statement” explaining the reasons for closing the investigation, such as the FTC’s Febru - ary 2023 statement on the closing of its investigation of Amazon’s Acquisition of One Medical and the DOJ’s
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