Mergers & Acquisitions Archives - Page 29 of 49

German Regulator Steps Up Enforcement of Merger Standstill Obligation

by Emily Townsend | May 17, 2011 | EC Developments, German Developments, Mergers & Acquisitions

The majority of merger control regimes around the world impose standstill or waiting period requirements for notifiable transactions, e.g. the US, the EU and most EU Member States. If a transaction meets the filing thresholds, it must be notified to the competent antitrust regulator and must not be closed without prior approval by the antitrust regulator or the expiration of the applicable waiting period.

Under German merger control rules, a notifiable merger must not be implemented without prior clearance decision. An infringement of the standstill obligation can (theoretically) lead to fines of up to 10 percent of the group’s worldwide turnover. In addition, the infringement of the standstill obligation renders the contracts ineffective under German merger control rules.

The German Federal Cartel Office (FCO) has recently taken a stricter approach to the enforcement of the merger standstill obligation. In the past, the risk of fines was minor if the merger did not lead to any serious competition concerns, if it was the group’s first infringement of the standstill obligation and if the company itself notified the FCO ex post of the implemented merger.

We see now a growing number of decisions imposing fines for the infringement of the standstill obligation (sometimes referred to as "gun jumping" in the United States). In May 2011, in the latest of a string of such decisions, the FCO imposed a substantial fine for infringement of the standstill obligation although the merger did not lead to any serious competition concerns and although the company had itself notified the implemented merger. These facts were only taken into account as mitigating factors for the calculation of the fine.

The European Commission has also recently imposed fines for the infringement of the standstill obligation.

In this changing environment, the filing requirement and the standstill obligation cannot be seen as a pure formality. It is therefore essential to always verify whether and in which jurisdictions a transaction is notifiable – and not to close the deal before the relevant competition authorities have cleared the deal.

Poultry Merger Challenge

by Emily Townsend | May 13, 2011 | Agriculture, DOJ Developments, Mergers & Acquisitions

by Gregory E. Heltzer and Carrie G. Amezcua

On May 10, the U.S. Department of Justice (DOJ) filed a civil lawsuit against George’s Inc. to block its $3M acquisition of Tyson Foods Inc.’s, Harrisonburg, Virginia chicken processing plant, showing that deals of all sizes face scrutiny. This case also continues the trend of challenges to non-reportable transactions by both the DOJ and FTC, as well as the DOJ’s current focus on the agriculture sector. It is also notable because the DOJ is alleging that the merger leads to monopsony power, a relatively rare allegation, but one that is increasingly used in challenging deals in the agriculture business.

The DOJ began investigating the acquisition when it was announced in mid-March, and issued Civil Investigative Demands to the parties on April 18, 2011. Despite their awareness of the DOJ’s concerns and ongoing data and document productions, the parties consummated the deal.

George’s and Tyson are two of only three chicken processors in the Shenandoah Valley. Chicken processors process and distribute "broilers," which are chickens raised for meat products. The processors compete for contracts with growers, who care for and raise chicks from the time they are hatched until the time they are ready for slaughter.

In its complaint, the DOJ alleges that the relevant product market is the "purchase of broiler grower services from chicken farmers." The DOJ then asserts that, following the proposed merger, chicken farmers would have only a single processor to sell their growing services to – in part because the only other processor in the 50-75 mile range, Pilgrim’s Pride, is at capacity. The DOJ alleges that the consolidation would not only harm grower’s contract prices but also lead to inferior contract terms on other, non-price factors. The DOJ argues that the relevant geographic market is limited to the Shenandoah Valley because of transportation costs for feed and live birds.

The full complaint can be found on the DOJ website: https://www.justice.gov/atr/cases/f270900/270983.pdf.

Be Aware of the EU Watch Dog: Commission Blocks Merger Between Aegean Airlines and Olympic Air

by Emily Townsend | Apr 29, 2011 | EC Developments, Mergers & Acquisitions

by Martina Maier and Philipp Werner

In January 2011, the European Commission decided that the proposed merger between Aegean Airlines and Olympic Air should be prohibited because it would have resulted in a quasi-monopoly on the domestic Greek air transport market. This decision shows that traditional airline merger remedies, such as slot releases, are sometimes insufficient to allay concerns of monopolization. It also illustrates that the Commission will take a tough stance on competition policy, even when facing strong political pressure to clear the merger for the sake of the economy.

To read the full article here, click here.

Cooperation Between Competition Authorities in Merger Review in the EU

by Emily Townsend | Apr 29, 2011 | EC Developments, Mergers & Acquisitions

by Philipp Werner and Christoph Voelk

The European Commission started a public consultation on a draft document which seeks to establish best practices on cooperation between national competition authorities (NCAs) in the EU when reviewing mergers. Although cooperation between NCAs exists already, especially through the European Competition Network (ECN), the best practices seek to formalize the cooperation between NCAs and thus providing more security and predictability for the parties and their legal advisers.

The best practices should enhance cooperation between NCAs in cases where the same merger is assessed by several NCAs because it does not meet the thresholds for review under the EU Merger Regulation. The Commission considers cooperation between NCAs as beneficial not only for the authorities but also for the merging parties: it will speed up the investigation process, reduce burdens on the merging parties and may help NCAs in designing remedies. Particularly in cases where serious concerns about the post merger situation exist, close cooperation between competition authorities will secure a non-conflicting and coherent outcome.

The object of the Commission’s draft is twofold:

First, NCAs should keep each other informed of important developments related to their investigation into the merger. Also, NCAs should liaise in cases where closer cooperation is necessary and keep each other informed about their progress. Most importantly, the Commission proposes that NCAs should in future discuss market definition, theories of harm, empirical evidence and the possible impact of a proposed merger.

Second, the draft also assigns a role to the merging parties. Merging parties should, as far as possible, provide NCAs with information as to where the merger will be filed, the dates of the proposed filing, geographic areas, sectors involved etc. Also, merging parties should assist in ensuring that remedies do not lead to inconsistencies and that such remedies are effective. Of importance is further the proposal that the merging parties, but also third parties, shall – as far as possible – grant waivers of confidentiality so that NCAs actually are permitted to discuss particular issues of a proposed transaction.

Comments on the Commission’s draft can be submitted until 27 May 2011 to comp-a2-mergers@ec.europa.eu.

The consultation page can be accessed via https://ec.europa.eu/competition/consultations/2011_merger_best_practices/index_en.html

U.S. Dept. of Justice and Germany’s FCO Permit Patent Acquisition With Modifications

by Emily Townsend | Apr 22, 2011 | DOJ Developments, German Developments, Mergers & Acquisitions

by Stefan M. Meisner

Yesterday, the U.S. Department of Justice announced that CPTN Holdings, LLC, a joint venture owned equally by Microsoft Corp., Apple, Inc. , Oracle Corp., and EMC Corp, has agreed to modify its agreement to acquire certain patents from Novell, Inc. in order to allay antitrust concerns raised by the transaction. The Department had expressed concerns that the original deal would threaten the ability of open source software to innovate and compete in critical software markets. The modifications to the deal will allow it to go forward, but the Department emphasized that it will continue to monitor distribution of the patents to ensure continued competition. The transaction also received antitrust clearance from Germany’s Federal Cartel Office. The German and American authorities cooperated closely on the matter, aided by waivers from the parties that allowed information sharing between the two agencies. Regulators are increasingly attuned to the effects of intellectual property transactions on competition.

For more information on the CPTN Holdings, LLC transaction, you may find the following links useful:

Department of Justice Press Release
https://www.justice.gov/atr/public/press_releases/2011/270086.htm

Law 360 article
https://www.law360.com/competition/articles/240355?utm_source=newsletter&utm_medium=email&utm_campaign=competition

FTC Dismisses Complaint in LabCorp

by Emily Townsend | Apr 22, 2011 | FTC Developments, Mergers & Acquisitions

by Stephen Wu

Earlier today, the FTC dismissed its complaint against LabCorp after failing to obtain a preliminary injunction in federal district court to prevent LabCorp from further integrating with WestCliff.

LabCorp had acquired WestCliff, a bankrupt lab services competitor in Southern California, in 2010, but the FTC chose to challenge the transaction in front of one of its administrative law judges and had sought a preliminary injunction from a federal district court to prevent LabCorp from integrating WestCliff pending the outcome of the administrative trial.

After losing its bid for a preliminary injunction at the district court, the FTC filed an emergency motion for an injunction pending an appeal that the Ninth Circuit Court of Appeals denied. This meant that LabCorp was free to integrate WestCliff pending the outcome of any appeal of the denial of the preliminary injunction or the FTC’s related administrative trial on the merits of the acquisition.

The FTC’s press release can be found at: https://www.ftc.gov/opa/2011/04/labcorp.shtm.

The Top Five (Avoidable) Antitrust Traps in M&A Transactions

by Emily Townsend | Feb 28, 2011 | DOJ Developments, FTC Developments, Mergers & Acquisitions

by Jon B. Dubrow, Joseph F. Winterscheid and Carla A. R. Hine

In M&A transactions, early involvement of antitrust counsel is essential to avoid unnecessary expense, delay and antitrust risks. Failure to involve antitrust counsel early on in the process may not only jeopardize the parties’ ability to obtain antitrust clearance, but it can also give rise to potential exposure for independent antitrust violations and deal risk. This article discusses five avoidable antitrust pitfalls to keep in mind early in any transaction planning process.

To read the full article, click here.

Market Definition Spurs District Court’s Decision Denying Product Ownership Challenge

by Emily Townsend | Sep 22, 2010 | FTC Developments, Mergers & Acquisitions

by Jon B. Dubrow, David Marx, Jr. and Rachael Lewis

The Federal District Court in Minnesota recently decided Ovation Pharmaceutical did not violate federal or state antitrust laws when it acquired Indocin IV and NeoProfen, the only two drugs approved for treatment of a specific heart condition that primarily affects premature babies, because the challengers failed to establish that the drugs were in the same product market. The decision raises significant issues to consider when evaluating antitrust risks in future transactions.

To read the full article, please visit: https://www.mwe.com/info/news/ots0910i.htm.

International News Issue 2 2010

by Emily Townsend | Jun 29, 2010 | Cartel Enforcement, Chinese Developments, Distribution/Franchising, EC Developments, German Developments, Healthcare Antitrust, IP Antitrust, Italian Developments, Joint Ventures/Competitor Collaboration, Mergers & Acquisitions, Monopolization/Abuse of Dominance, Private Litigation

McDermott Will & Emery’s International News, Issue 2, 2010, covers a range of legal developments of interest to those operating internationally. This issue focuses on Antitrust and Competition.

In this issue…

The full issue can be found at: https://www.mwe.com/info/news/int0210.htm.

Italian Merger Control Thresholds – New Revisions

by Emily Townsend | May 31, 2010 | Italian Developments, Mergers & Acquisitions

by Veronica Pinotti and Martino Sforza

The Italian Competition Authority has updated its merger control turnover thresholds. Effective as of 31 May 2010, Section 16(1) of Law no. 287 of 10 October 1990 requires prior notification of all mergers and acquisitions where either of the following conditions is fulfilled:

Aggregate turnover in Italy of all undertakings involved is above EUR 472 million (revised under the terms of the same Section 16(1))
Aggregate turnover in Italy of the target company is above EUR 47 million (as revised)

No notification is required if the target is a foreign company which did not generate any turnover in Italy in the last three years and is not expected to do so as a result of the transaction.

Italy’s merger control thresholds are adjusted annually to take into account increases in the GDP deflator index. The updated thresholds are published in the Competition Authority’s Bulletin once this increase in index is announced officially.

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