February 21, 2017
Antitrust: FTC Merger Remedy Study
This Arnold & Porter Kaye Scholer memo addresses the findings of the FTC’s Merger Remedy Study. Here’s the intro:
On February 3, 2017, the US Federal Trade Commission (FTC or Commission) released the findings of its “Merger Remedy Study” (the FTC Study) which examined the effectiveness of Commission-required remedies in transactions from 2006 to 2012. The FTC Study—its first on merger remedies in over 16 years—provides an important window into the FTC’s current thinking about merger remedies that may help businesses plan and position transactions for FTC approval. Moreover, it also provides several key insights that potential divestiture buyers should consider during and after completion of the divestiture to ensure the remedy is successful.
The FTC Study concluded that the current process for designing remedies, as well as the remedies themselves, generally have accomplished what the Commission has sought—to replace the lost competition from the initial transaction. As a result, the FTC confirmed that it will continue to follow many of its practices and policies today.
In terms of specific remedies, the FTC continues to have a strong preference for the divestiture of an ongoing business, & the memo highlights the features that the FTC looks for in divestiture plans.
– John Jenkins