The Federal Trade Commission (FTC) and Department of Justice (DOJ)’s aggressive approach towards mergers and acquisitions (M&A) is deterring companies from pursuing deals, write Bloomberg Law reporters Justin Wise and Mahira Dayal – threatening even procompetitive deals that pose no antitrust harms.
In the article, William Kovacic, a George Washington University law professor and former Federal Trade Commission chair, calls the Agencies’ approach “a tax on resources” and “something that can lead to swinging at pitches ‘outside the strike zone.’”
This approach clashes with decades of balanced competition policies which have established M&A as a fundamental pathway for life sciences companies to bring new breakthroughs to market. By broadly deterring even pro-innovation life sciences M&A, the Agencies approach risks obstructing new treatments and cures from reaching patients in need.
Key excerpts from the article are included below:
- “Firms attracting antitrust scrutiny are abandoning deals at their highest clip in years, as the Biden administration’s enforcers appear to make good on a policy pushing for more lawsuits and fewer settlements.”
- “US antitrust enforcers’ reluctance to settle has paired with an enforcement approach scrutinizing areas that previously gained little attention… The push has yielded a mixed scorecard, with some important legal fights ongoing.”
- “The pro-litigation stance has generally left parties with a black-and-white choice: ‘They can get sued and litigate or they decide to abandon the merger,’ said James Fishkin, a Dechert antitrust partner in Washington.”
- “Critics of the heavy enforcement also argue that it’s created an environment in which only the biggest players have the resources to manage protracted reviews or litigation.”
- “‘This is one of the big ironies of the current enforcement approach,’ Jesse Solomon, a Davis Polk & Wardwell antitrust partner in Washington, said. ‘The chilling effect is largely on the non-blockbuster deals that are getting in-depth reviews but cannot sustain the costs of those reviews.’”
- “The presidential election could carry important consequences for that agenda, but M&A lawyers acknowledge that Biden’s enforcers have effectively changed the conversation around antitrust. ‘The main effect,’ Barnett said, ‘is that it makes the companies thinking about merging think twice about it.’”
To read the full article, click here.