Litigated merger challenges
On 20 November 2017, the Department of Justice (DOJ) filed a complaint to block AT&T/DirectTV's US$85 billion acquisition of Time Warner Inc, one of the largest mergers in American history.
A bench trial on the merits of the transaction began on 19 March 2018 before Judge Richard Leon in US District Court for the District of Columbia.
On 12 June 2018, Judge Richard Leon approved the merger, holding that the DOJ had failed to show that the merger, if completed, likely would create substantial anticompetitive harm.
The Fair Trade Commission (FTC) issued an administrative complaint on 5 December 2017 challenging the merger of two major producers of chemicals used in paint, plastic and paper products.
On 23 January 2018, Tronox filed a separate action against the FTC in the Northern District of Mississippi, alleging that the FTC's challenge to block the deal without also seeking a court order violates the Administrative Procedure Act by robbing Tronox of the opportunity to seek a quick decision on whether the FTC's objections to the deal have merit.
Sanford Health/Sanford Bismarck/Mid Dakota Clinic
On 21 June 2017, the FTC, acting jointly with the Office of the Attorney General of North Dakota, filed an administrative complaint to block the proposed merger of North Dakota healthcare providers, Sanford Health, Sanford Bismarck and Mid Dakota Clinic, PC.
On 14 December 2017, US magistrate judge Alice Senechal for the District of North Dakota sided with the FTC and the Attorney General of North Dakota in issuing a preliminary injunction, stating that the FTC would likely succeed in proving that the deal would harm competition in several services and result in a combined entity possessing a 75 per cent market share for adult primary care physicians and a 100 per cent market share for general surgery physicians.
Two days later, Sanford and Mid Dakota appealed to the Eighth Circuit, claiming that the District Court erred in defining the relevant market and ignored pro-competitive efficiencies.
Wilhelm Wilhelmsen/Drew Marine
On 23 February 2018, the FTC filed an administrative complaint challenging the proposed merger of the world's two largest suppliers of chemicals used to treat boiler and engine cooling water on large ocean vessels: Wilhelmsen Maritime Services, based in Norway, and Drew Marine Group, based in New Jersey.
The merging parties moved to stay the administrative trial in light of the parallel proceeding in DC District Court on whether to issue a preliminary injunction.
On 29 May 2018, the DOJ filed a complaint in the US District Court for the District of Columbia to challenge the merger between Bayer AG and Monsanto, the world's two largest agricultural companies.
The DOJ simultaneously filed a proposed settlement granting conditional approval for the US$66 billion transaction, which would require Bayer AG to divest businesses and assets collectively worth approximately US$9 billion – the largest negotiated merger divestiture in history – in order to fully satisfy horizontal and vertical competition concerns.
Northrup Grumman/Orbital ATK
On 5 June 2018, the FTC granted conditional approval of Northrup Grumman's acquisition of Orbital AK, but required Northrup to sell its solid rocket motors (SRMs) to its competitors on a non-discriminatory basis and to erect firewalls separating its SRM business from the rest of its operations.
According to the complaint, the acquisition would likely be anticompetitive by allowing the combined entity to withhold access to its solid rocket motors or increase SRM prices to competitors.
The DOJ conditioned approval of Paris-based Danone's US$12.5 billion acquisition of The WhiteWave Foods Company on the parties divesting Danone's Stonyfield Farms business to an independent buyer.
The DOJ stated its primary concern was the possibility of cooperative behaviour, including strategising, coordinated marketing and the exchange of confidential information, which would have resulted in farmers receiving less favourable contract terms for the purchase of their raw organic milk.
Mergers abandoned prior to litigation
JM Smucker/Conagra Brands
On 30 May 2017, JM Smucker Co, which owns the Crisco cooking oil brand, announced its intentions to acquire Conagra Brands' Wesson cooking oil brand for US$258 million, thereby obtaining all intellectual property rights to the Wesson brand, as well as inventory and manufacturing equipment.
Carolinas Healthcare System
On 9 June 2016, the DOJ and the North Carolina Attorney General brought a suit against the Carolinas Healthcare System (CHS), alleging that anti-steering provisions in its contracts are in violation of section 1 of the Sherman Act.
• they directly prevent insurers from offering networks that do not include CHS or tiered networks that feature CHS competitors; and
• they place restrictions on insurers that prevent them from providing truthful information to patients about the value of CHS's services compared to its competitors.
The FTC and DOJ previously issued statements targeting anti-steering provisions on 28 October 2011.
On 30 March 2017, Judge Robert Conrad of the District Court for the Western District of North Carolina authorised the case to go forward by denying CHS's motion for judgment on the pleadings, writing that it is plausible that the hospital system's market power has the potential for genuine adverse effects on competition.
Steves & Sons/Jeld-Wen
On 6 June 2018, the DOJ filed a statement of interest regarding equitable relief in a lawsuit in the Eastern District of Virginia filed by Steves & Sons – an interior door manufacturer headquartered in San Antonio – against its Charlotte-based competitor Jeld-Wen.
The DOJ's statement of interest offers the District Court a conceptual framework for evaluating the divestiture, but declines to address the facts head-on.
On 3 December 2017, CVS Health announced its plans to acquire Aetna for US$69 billion in a vertical transaction that would pair up the largest retail pharmacy chain and one of the two largest pharmacy benefit managers (PBMs) with the third-largest health insurer in the United States.
Federal regulators have said little about the deal; however, they issued Second Requests to the parties on 1 February 2018.
On 8 March 2018, Cigna – one of the nation's five largest health insurers – announced its plans to acquire Express Scripts – the nation's largest pharmacy benefit manager – for US$67 billion.
1 Complaint at 1, United States v AT&T Inc, No. 2017-25 (DDC 20 November 2017), ECF No. 1.
2 News Release, AT&T Inc, AT&T to Acquire Time Warner (22 October 2016), available at http://about.att.com/story/att_to_acquire_time_warner.html.
3 Complaint, supra note 1, at 1.
6 Press Release, Dep't of Justice, Justice Department Files Antitrust Lawsuit to Block AT&T's Acquisition of T-Mobile (31 August 2011), www.justice.gov/opa/pr/justice-department-files-antitrust-lawsuit-block-att-s-acquisition-t-mobile.
7 Rick Mitchell, Wake Up Call: Trial Starts Today Over Blocked AT&T-Time Warner Deal, Big Law Business (19 March 2018), available at https://biglawbusiness.com/wake-up-call-trial-starts-today-over-blocked-att-time-warner-deal/.
8 nMichael Hiltzik, ‘Trump Administration Sues to Block AT&T/Time Warner Merger: Here’s why Trump is Doing the Right Thing for the Wrong Reason’, LA Times (20 November 2017, 3:05PM), available at www.latimes.com/business/hiltzik/la-fi-hiltzik-att-cnn-20171113-story.html.
9 Heidi Przybyla & Pete Williams, 'Former DOJ Officials Raise Trump AT&T Interference Concerns', NBC News (9 March 2018, 11:00PM), available at https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036.
10 Bryan Koenig, Comcast Exec Saps Gov't Theory On AT&T-Time Warner Union, Law360 (29 March 2018), available at https://www.law360.com/articles/1027592/comcast-exec-saps-gov-t-theory-on-at-t-time-warner-union.
11 United States v AT&T Inc, No. 17-2511 (DDC 12 June 2018).
12 Id at 98-99.
13 Id at 1.
14 Id at 170–73.
15 Sara Salinas, ‘AT&T Wins: Judge Clears $85 Billion Bid for Time Warner with No Conditions’, CNBC: Tech (12 June 2018, 4:14PM), available at https://www.cnbc.com/2018/06/12/att-time-warner-ruling.html.
16 Notice of Appeal, United States v AT&T Inc et al, 1:17-cv-02511-RJL (DDC 12 July 2018).
17 Complaint, In the Matter of Tronox Ltd, No. 9377 (FTC 5 December 2017).
18 Press Release, Fed. Trade Comm'n, FTC Challenges Proposed Merger of Major Titanium Dioxide Companies (5 December 2017), available at https://www.ftc.gov/news-events/press-releases/2017/12/ftc-challenges-proposed-merger-major-titanium-dioxide-companies.
19 Id at 4.
20 Id at 6.
21 Chuck Stanley, 'FTC Won't Pause Challenge to $2.4B Tronox-Cristal Deal', Law360 (17 May 2018, 8:18PM), available at https://www.law360.com/articles/1044717/ftc-won-t-pause-challenge-to-2-4b-tronox-cristal-deal.
22 Brief for FTC at 32, In the Matter of Tronox Ltd, No. 9377 (FTC 15 December 2017).
23 Valspar Corp v EI Du Pont De Nemours & Co, 873 F3d 185 (3d Cir. 2017).
24 Complaint at 1–6, Tronox Ltd v Fed. Trade Comm'n, No. 1:18cv10-SA-RP (ND Miss. 23 January 2018), ECF No. 1.
25 Id at 12.
26 Id at 14.
27 Notice of Voluntary Dismissal at 1–2, Tronox Ltd v Fed. Trade Comm'n, No. 1:18cv10-SA-RP (ND Miss. 3 March 2018), ECF No. 24.
28 Motion to Stay, Fed. Trade Comm'n v Tronox Ltd, No. 9377 (FTC 5 May 2018).
30 Case Overview of Tronox/Cristal USA, FTC Enforcement, available at https://www.ftc.gov/enforcement/cases-proceedings/171-0085/tronoxcristal-usa (last updated 25 May 2018).
31 Melissa Zona, ‘Tronox’s Acquisition of Cristal Cleared by Saudi Arabia’s General Authority for Competition’, PR Newswire (29 January 2018 8:00 PM), available at https://www.prnewswire.com/news-releases/tronoxs-acquisition-of-cristal-cleared-by-saudi-arabias-general-authority-for-competition-300589408.html.
32 FTC Complaint at 1–4, In the Matter of Sanford Health, No. 9376 (FTC 21 June 2017).
35 Order Granting Injunction at 1–3, Fed. Trade Comm'n v Sanford Health, No. 1:17-cv-133 (DND 13 December 2017), ECF 137.
36 Memorandum Opinion Granting Injunction at 30–35, Fed. Trade Comm'n v Sanford Health, No. 1:17-cv-133 (DND 15 December 2017), ECF 140.
37 Brief for Appelees at 2–15, Fed. Trade Comm'n v Sanford Health, No. 17-3783 (8th Cir. 5 March 2018).
38 See Appellants' Statement of Issues at 1–3, Fed. Trade Comm'n v Sanford Health, No. 17-3783 (8th Cir. 9 January 2018).
39 Brief for Appelees at 2–15, Fed. Trade Comm'n v Sanford Health, No. 17-3783 (8th Cir. 5 March 2018).
40 Complaint at 1, In the Matter of Wilhelm Wilhelmsen, No. 9380 (FTC 22 February 2018).
41 Id at 3-6.
42 Respondent's answer at 3, In the Matter of Wilhelm Wilhelmsen, No. 9380 (FTC 16 March 2018).
43 Id at 1.
45 Temporary Restraining Order, Fed. Trade Comm'n v Wilhemsen, No. 18-cv-00414-TSC (DDC 23 February 2018), ECF No. 7.
46 Motion for Injunction at 16-21, Fed. Trade Comm'n v Wilhemsen, No. 18-cv-00414-TSC (DDC 8 May 2018), ECF No. 49-1.
47 Id at 32-34.
48 Motion to Stay at 1–2, In the Matter of Wilhelm Wilhelmsen, No. 9380 (FTC 15 May 2018).
49 DOJ Complaint at 1–4, United States v Bayer AG, No. 1:18-cv-01241 (DDC 29 May 2018), ECF No. 1.
50 Id at 5–10.
51 Id at 5–15.
52 Id. at 2-3.
53 Press Release, Dep't of Justice, Justice Department Secures Largest Negotiated Merger Divestiture Ever to Preserve Competition Threatened by Bayer's Acquisition of Monsanto (29 May 2018), available at https://www.justice.gov/opa/pr/justice-department-secures-largest-merger-divestiture-ever-preserve-competition-threatened.
56 Proposed Final Judgement at 18–31, United States v Bayer AG, No. 1:18-cv-01241 (DDC 29 May 2018), ECF No. 2-2.
57 Press Release, European Comm'n, Mergers: Commission Clears Bayer's Acquisition of Monsanto, Subject to Conditions (21 March 2018), available at http://europa.eu/rapid/press-release_IP-18-2282_en.htm.
58 Decision and Order at 1-3, In the Matter of Northrop Grumman Corp, No. C-4652 (FTC 5 June 2018).
60 FTC Complaint at 3–5, In the Matter of Northrop Grumman Corp, No. C-4652 (FTC 5 June 2018).
63 Decision and Order, supra note 58, at 1–3 (FTC 5 June 2018).
64 Press Release, 'Fed. Trade Comm'n, FTC Imposes Conditions on Northrop Grumman's Acquisition of Solid Rocket Motor Supplier Orbital ATK, Inc' (5 June 2018), available at https://www.ftc.gov/news-events/press-releases/2018/06/ftc-imposes-conditions-northrop-grummans-acquisition-solid-rocket.
65 DOJ Consent Decree, United States v Danone SA, No. 1:17-cv-00592 (DDC 3 April 2017), ECF No. 2.
66 Press Release, supra note 64.
67 Press Release, 'Dep't of Justice, Justice Department Requires Divestiture of Danone's Stonyfield Farms Business in Order for Danone to Proceed with WhiteWave Acquisition' (3 April 2017), available at https://www.justice.gov/opa/pr/justice-department-requires-divestiture-danone-s-stonyfield-farms-business-order-danone.
70 Final Judgement, United States v Danone SA, No. 1:17-cv-0592 (DDC 13 July 2017), ECF No. 12.
71 News Release, JM Smucker, 'The JM Smucker Company to Acquire the Wesson Oil Brand from Conagra Brands, Inc' (30 March 2017), available at http://www.jmsmucker.com/investor-relations/smuckers-financial-news-releases/article/2277288.
72 Press Release, Fed. Trade Comm'n, 'FTC Challenges Proposed Acquisition of Conagra's Wesson Cooking Oil Brand by Crisco owner, JM Smucker Co' (5 March 2018), available at https://www.ftc.gov/news-events/press-releases/2018/03/ftc-challenges-proposed-acquisition-conagras-wesson-cooking-oil.
73 Complaint at 11–12, In the Matter of The JM Smucker Co, No. 9381 (FTC 5 March 2018).
74 Maria Armental, 'Smucker, Conagra Call Off Wesson Oil Deal After FTC Challenge', Wall Street Journal (6 March 2018), available at https://www.wsj.com/articles/smucker-conagra-call-off-wesson-oil-deal-after-ftc-challenge-1520376297.
75 Joint Motion to Dismiss Complaint, In the Matter of The JM Smucker Co, No. 9381 (FTC 7 March 2018).
76 Press Release, 'Dep't of Justice, Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering Restrictions' (9 June 2016), available at https://www.justice.gov/opa/pr/justice-department-and-north-carolina-sue-carolinas-healthcare-system-eliminate-unlawful.
78 Complaint at 2–4, United States v Charlotte-Mecklenburg Hosp Auth, No. 3:16-cv-00311-RJC-DCK (WDNC, 9 June 2016), ECF No. 1.
79 See Fed. Trade Comm'n & Dep't of Justice Antitrust Div., Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (28 October 2011), available at https://www.justice.gov/sites/default/files/atr/legacy/2011/10/20/276458.pdf.
80 Order at 7-11, United States v Charlotte-Mecklenburg Hosp Auth, No. 3:16-cv-00311-RJC-DCK (WDNC 30 March 2016), ECF No. 46.
82 Order, supra note 86, at 15–17.
84 Order Denying Motion to Extend Time, United States v Charlotte-Mecklenburg Hosp Auth, No. 3:16-CV-311-RJC-DCK (WDNC 14 June 2018), ECF No. 83.
85 DOJ Statement of Interest at 2–3, Steve & Sons, Inc v Jeld-Wen, Inc, No. 3:16-cv-00545-REP (ED Va. 6 June 2018), ECF No. 1640.
86 Id. at 1–2.
87 Sergio Chapa, ‘Door Industry Awaits Outcome of Legal Battle Involving Charlotte’s Jeld-Wen’, Charlotte Business Journal (25 May 2018), available at https://www.bizjournals.com/charlotte/news/2018/05/25/door-industry-awaits-outcome-of-legal-battle.html.
89 Memorandum Supporting Motion to Dismiss, supra note 88, at 1–2 (ED Va. 5 August 2018).
90 DOJ Statement of Interest, supra note 91, at 2.
92 Chapa, supra note 93.
93 See DOJ Statement of Interest, supra note 91, at 2–6.
94 Id at 3–6.
95 Id at 6.
96 Plaintiff's Motion for Judgement as a Matter of Law, Steve & Sons v Jeld-Wen, No. 3:16-cv-545-REP (EDVA 15 June 2018), ECF No. 1627.
97 News Release, CVS Health Corp, 'CVS Health to Acquire Aetna; Combination to Provide Consumers with a Better Experience, Reduced Costs and Improved Access to Health Care Experts in Homes and Communities Across the Country' (3 December 2017), available at https://cvshealth.com/newsroom/press-releases/cvs-health-acquire-aetna-combination-provide-consumers-better-experience.
98 Letter to from Diana Moss, President, American Antitrust Inst, to Makan Delrahim, Assistant Attorney Gen., 'Re: Competitive and Consumer Concerns Raised by the CVS-Aetna Merger 1–2' (26 March 2018), available at http://www.antitrustinstitute.org/sites/default/files/CVS-Aetna_AAI%20Letter_3.26.18.pdf.
99 CVS Health Corp, Current Report (Form 8-k) (1 February 2018).
100 US: CVS, Aetna Unscathed Through Congressional Hearing, Competition Policy Int'l (1 March 2018), available at https://www.competitionpolicyinternational.com/us-cvs-aetna-unscathed-through-congressional-hearing.
101 Letter to from Diana Moss to Makan Delrahim, supra note 104.
102 News Release, Cigna, Cigna to Acquire Express Scripts (8 March 2018), available at https://www.cigna.com/assets/docs/about-cigna/Investor%20Relations/cigna-corp-esrx-acquisition-investor-presentation.pdf.
104 Cigna Corp, Current Report (Form 8-k) (23 April 2018).
King & Spalding’s antitrust practice group provides sophisticated and business-oriented advice on all aspects of competition law, including mergers and acquisitions, joint ventures and other strategic alliances; government civil and criminal investigations; private antitrust litigation; and counselling. Described by Chambers USA as ‘a sharp, practical, and business-oriented group,’ our group has been recognised as one of the top antitrust practices in the country. Clients seek our counsel on the antitrust risks of national and international mergers and joint ventures, and they look to us to obtain US and international agency merger approvals for such transactions. We have also successfully defended numerous companies in multi-district antitrust litigation, including winning dismissals at the outset of all claims in recent cases. We provide clients with a practical, business-minded team that achieves results in cases through our expertise and the ability to build strong relationships with our clients, co-counsel and other members of the defence team.
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