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The US-Israel Legal Review 2019 107
MERGER CONTROLS
By Rebecca Farrington
It is critical for parties to prepare for potential investigations by US and global antitrust authorities in
any transaction raising competitive issues, large or small, horizontal or vertical.
Early discussions becoming more common
While pre-filing has long been standard practice for cases in front of the European Commission and
other authorities around the world, this had not been common with the US authorities outside of
certain industries. More recently, however, US authorities have been encouraging early discussions
in transactions where the parties know there is a high likelihood of competition issues, including
encouraging parties to provide voluntary submissions of business documents and information
beyond what is required in their filings – and to provide it even before making their merger filings. By
doing so, both parties and enforcers hope to address issues earlier in the process to streamline and
focus any investigation.
Vertical mergers under scrutiny
Antitrust authorities are paying closer attention to potential competitive harms from vertical
mergers. Both the DOJ and the FTC have investigated and pursued allegedly anticompetitive vertical
mergers, the most notable example of which is the DOJ’s attempt to block the merger between AT&T
and Time Warner.
Structural remedies still favoured
The FTC andDOJ continue to favor structural remedies, such as divestitures, over behavioral remedies.
Bayer, for example, divested US$9 billion worth of assets, its largest divestment ever, to secure
consent for the Monsanto deal. Telecommunications groups CenturyLink and Level 3 sold overlapping
aspects of their businesses to obtain clearance, and Alere and Abbott Laboratories recently sold two
product lines to receive the go-ahead for their merger. Despite the prevalence of structural remedies,
the recent Staples/Essendant settlement is an example of a behavioral remedy – a firewall imposed to
prevent access to commercially sensitive data.
JOHN REISS
GLOBAL HEAD, MERGERS &
ACQUISITIONS GROUP
COLIN DIAMOND
CO-HEAD ISRAEL PRACTICE
DANIEL TURGEL
CO-HEAD ISRAEL PRACTICE