USA Law and Practice Contributed by: Bradley Justus, Lisl Dunlop, Josh Jowdy and Sandhya Taneja, Axinn, Veltrop & Harkrider LLP
behavioural remedies. In the Biden administra - tion, both Agencies indicated that merger rem - edies will only be available as a way to address competitive concerns in exceptional cases; however, the new Trump administration lead - ership has indicated a return to acceptance of merger remedies. While remedy discussions may take place at any stage in the review process, they rarely begin before the Agency staff have investigated the transaction and identified concerns. In transac - tions with narrow but obvious concerns, par - ties may approach the Agency early with a pre- arranged “fix”. The FTC’s 2012 Negotiating Remedies Manual provides insight into its negotiating process and requirements, but may not fully reflect the prefer - ences of the current administration. In 2022, the DOJ withdrew its parallel 2020 Merger Remedies Manual, though it may be reinstated by the new administration. When the Agencies determine that a horizontal merger is likely to have anti-competitive effects, the Agencies generally prefer structural remedies consisting of divesting an ongoing standalone business unit. Structural divestitures consisting of less than a standalone business must include all assets (or licences to those assets) neces - sary for the divestiture purchaser to be an effec - tive, long-term viable competitor of the merged entity. The Agencies typically require the parties 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 behavioural or conduct remedies in very limited circumstances and have expressed scepticism
about whether behavioural remedies are effec - tive. In very rare cases, the Agencies have also pur - sued 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 Statement notes that “acceptable” remedies must ”maintain or restore competition in the markets affected by the merger”. The DOJ’s 2020 Merger Remedies Manual, which was with - drawn by the Biden administration 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; however, in one notable case (CVS/ Aetna, 2019), a judge did ask the parties to hold the acquired business separate pending pub -
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