You don’t need us to tell you that a merger or acquisition can be a wise business move. But to exploit as much as you can out of the process, you have to know how to competently navigate it in light of the law. And that’s no easy thing to do given the changing landscape in the business world and the legalities that apply to it. In fact, in recent developments, the federal government has increased its scrutiny of big mergers and acquisitions in an attempt to curtail those transactions that it feels are anticompetitive in nature.
The Justice Department seeks public comment
Just recently, the Justice Department has made calls for public comment on how it can more effectively implement merger analysis processes that will more effectively identify illegal and otherwise anticompetitive mergers. The focus is to identify gaps in the current assessment guidelines, such as the impact that a merger has on quality and innovation.
This comes on the tails of major transactions, including Microsoft’s proposed $70 billion dollar purchase of Activision Blizzard, which could make Microsoft one of the biggest gaming companies in the industry, and Meta’s (formerly Facebook) acquisition of social media platforms Instagram and WhatsApp. In fact, in the latter case, pending litigation seeks to break the company apart to create more competition in the social media marketplace.
Some of these deals are being blocked, too. For example, the federal government recently prevented publisher Penguin Random House’s proposed acquisition of Simon & Schuster out of fear that it would give Penguin Random House too much power over which books would be published in the United States.
What an aggressive Department of Justice means for you
The changes made to federal analysis of these deals could spell trouble for businesses that are looking to consolidate operations and expand consumer bases, especially when the two companies involved are direct competitors. To increase the chance of successfully navigating a major merger or acquisition, then, businesses will likely have to show that there won’t be a major impact to consumer prices, worker wages, innovation, quality, and competition in the marketplace. You can look at the Department of Justice’s Horizontal Merger Guidelines to see the current analytical framework that it employs when assessing these kinds of mergers, but keep in mind that those guidelines may be broadened.
Navigating the merger and acquisition process is no easy task, of course, and may require extensive research. However, if you want to maximize the chances of your deal being approved by federal regulators, then you’ll want to make sure that you’re leaving no stone unturned and that you’re anticipating what the government may be looking for when analyzing your proposed transaction. Be prepared for the government to gather evidence from your business and the other party to the merger, as well as from consumers and other participants in the industry.
Confidently navigate your merger or acquisition
There’s certainly a lot on the line in a merger or acquisition. If you aren’t as diligent as you should be, then you could not only lose out financially, but you could also be at risk of having your business later broken up by federal regulators.
Therefore, it’s in your best interests to fully understand applicable laws and how they apply to your set of circumstances. An experienced law firm like ours can help you navigate the intricacies of your case so that you can maximize your chances of obtaining a favorable outcome. If you think that your business can benefit from the type of advocacy that knows how to increase your profits, strategically position you in the marketplace, and address Department of Justice concerns, then now is the time to speak with an attorney of your choosing.