On September 3, 2020, the Antitrust Division of the DOJ issued a revised Policy Guide to Merger Remedies, following shortly after it announced a reorganization of its civil enforcement to create an Office of Decree Enforcement and Compliance.

The Policy Guide to Merger Remedies largely codifies a trend towards strengthening of the Division’s preference

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.

Antitrust in the United States

Antitrust attracted significant popular and political attention in 2019: State and federal enforcers launched investigations into “Big Tech” platforms; some enforcers and 2020 Democratic presidential candidates expressed

Last week, the Delaware Court of Chancery found that a target company in an agreed merger properly terminated the merger agreement following the passage of the specified “end date” where the buyer failed to exercise its right under the agreement to extend the end date.  See Vintage Rodeo Parent, LLC v. Rent-a-Center, Inc., C.A. No. 2018-0927-SG (Del. Ch. Mar. 14, 2019).  The decision is a stark reminder that courts will enforce the terms of a merger agreement as written, and that the failure to comply with seemingly ministerial formalities can have severe consequences.   
Continue Reading Target’s Termination of Merger Agreement Approved Based on Plain Contract Language

On May 18, 2017, the European Commission fined Facebook €110 million for providing incorrect or misleading information during its 2014 investigation of its acquisition of WhatsApp.  The magnitude of the fine dwarfs the few penalties the Commission has imposed in the past for similar infractions and, as Commissioner Vestager made clear, “sends a clear

The past four years of merger enforcement at the federal antitrust agencies saw more litigated challenges than we’ve seen in a long time.  This came about because President Obama made a commitment to merger enforcement and appointed senior officials in the agencies who would carry out his vision.  Our partner Dave Gelfand, who oversaw

Theresa May, the new UK Prime Minister, commented that the UK Government should adopt an industrial strategy capable of “stepping in” to defend sectors that are important to the UK economy from acquisition by overseas acquirors.  Linked is an alert memorandum prepared by our Brexit Working Group, which focuses on the existing powers available to the UK Government to prohibit acquisitions of UK companies (or indeed non-UK companies with UK operations) on “public interest” grounds within the confines of EU law and discusses how these might be expanded following Brexit.
Continue Reading Industrial Strategy Post-Brexit: The UK’s Power To Block Mergers On Public Interest Grounds

A settlement on July 12, 2016 by the DOJ with ValueAct for violations of the HSR Act’s notification requirements and an interpretation of the Exchange Act’s beneficial ownership reporting rules posted by the SEC staff on July 14, 2016 combine to provide new guidance that will have an immediate impact on shareholder activism and engagement.
Continue Reading New Guidance on the Impact of SEC Beneficial Ownership Reporting and HSR Act Notification Regimes on Shareholder Activism and Engagement

The filing by the DOJ of a complaint in federal court on April 4, 2016 against ValueAct — claiming that ValueAct’s purchase of shares of two public companies violated the HSR Act’s notification and waiting period requirements and seeking $19 million in civil penalties (based on the $16,000 per day penalty provisions of the HSR Act) – has the potential to have an immediate impact on the tactics used by brand name “activist hedge funds,” such as ValueAct, to accumulate shares without prior notice to either the issuers in question or the market generally.
Continue Reading What the ValueAct Complaint Means for Activism Tactics and the SEC’s Beneficial Ownership Reporting Regime

The FTC has settled an enforcement action against Third Point Funds and their management company related to their acquisition of stock in Yahoo! Inc.

Based on the FTC’s press release, the funds had acquired shares in Yahoo! that exceeded the requirements for pre-acquisition filings under the Hart-Scott-Rodino Act.  (Filing is currently required prior to acquiring more than $76.3m worth of shares.  Notice of the planned acquisition must be given to the target company prior to filing, potentially providing a very early notification to the target of the acquisition of its shares by an activist.)  To avoid this filing requirement, the Third Point funds relied on the “investment only” exception, which permits investors to acquire up to 10% of an issuer’s stock without observing the HSR Act’s notice and waiting period requirements – so long as the investor’s intent is passive.
Continue Reading Third Point Settles FTC Enforcement Action – Will HSR Serve as Early Notice of Activist Stakebuilding?