Fed hit by “tidal wave” of applications for merger

Merger filings are on the rise, delaying regulatory reviews this year, the FTC told the companies on Tuesday.

More than 2,000 applications were filed in July, up from 815 in the period same period last year and 1136 inches Dec 2019, according to federal data. The FTC has warned that companies may complete the proposed merger before the FTC completes its reviews, but regulators can retroactively challenge transactions if they violate antitrust laws.

“The FTC has been hit by a wave of merger applications that limits the agency’s ability to thoroughly investigate transactions ahead of the statutory deadlines,” Acting Competition Bureau Director Holly Vedova wrote in a blog post. message… “For transactions that we cannot fully investigate in a timely manner, we have started sending out standard letters notifying companies that the FTC investigation remains open and reminding companies that the agency may subsequently determine that the transaction was illegal. Companies that choose to proceed with transactions that have not been fully investigated are committed at their own risk. “

Healthcare companies may have to wait longer for regulatory approvals, resulting in higher transaction costs. Registration under the Hart-Scott-Rodino Act is required for transactions in excess of $ 92 million, including most healthcare-related mergers.

The FTC usually has 30 days to determine if the agency wants more information about the transaction. If the authorities ask for more information, the deal is postponed until the parties do so. Federal regulators can then file a complaint to challenge the proposed merger. The agency noted that the FTC can challenge the deal regardless of whether it was investigated.

The FTC may send warning letters to inform merging organizations that an investigation remains open even after the review period has passed.

“Any failure to act by the commission prior to the expiration of the waiting period should not be construed as determining the legality of the transaction,” a sample warning. letter is reading.

President Joe Biden’s administration has pledged to take tough action on the proposed mergers that will halt competition. Federal governments and policymakers are also looking to make one-sided markets more competitive by increasing FTC and DOJ budgets, adjusting standards for acceptable mergers, and supporting retrospective analysis of mergers, among other things.

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