BREAKING: New Federal Draft Merger Guidelines Announced
On July 19, the Federal Trade Commission (FTC) and Department of Justice (DOJ) jointly released updated draft guidelines for their antitrust review of mergers and acquisitions. The new proposed guidelines were established following public comments solicited from the past 18 months and aim to better evaluate business and competition in the modern economy and current market realities.
The draft guidelines provide 13 principles the agencies will use in determining whether a transaction is anticompetitive and take into consideration increasing concern over new forms of consolidation including vertical mergers, cross-market mergers, and private equity acquisition. Most notably, the revamped guidelines would target vertical mergers, series of multiple acquisitions within the same market, and partial ownership and minority interests in acquisitions. Additionally, the proposed guidelines provide that a deal may be presumed to harm competition if the company’s market share after the acquisition would be greater than 30% or if the measure of market concentration measure Herfindahl-Hirschman Index (HHI) would exceed 1,800 points.
The public comment period on the draft guidelines is open for 60 days until September 18, after which the guidelines will be updated and finalized. Once finalized, these new guidelines would apply to all forms of mergers as the current merger guidelines since the horizontal merger guidelines of 2010 and vertical merger guidelines of 2020 were withdrawn. Stay tuned to the Source Blog for more in-depth analysis and latest developments on the final guidelines.