This recent Wachtell Lipton memo reviews U.S. M&A antitrust enforcement during 2019 and gazes into the crystal ball to predict what 2020 may bring. Here’s an excerpt addressing the role of state AGs:
Also worth watching in 2020 will be potential increased activism by state AGs in merger reviews. Traditionally, state AGs have participated in the federal agencies’ review of mergers and sometimes joined them in court challenges or settlements. Rarely has an AG brought a challenge of a transaction reviewed and cleared by one of the federal agencies.
Last year’s challenge of the T-Mobile-Sprint merger, led by California and New York, is the most significant instance of such intervention to date, and a clear sign that state AGs are willing to pursue independent merger enforcement actions when they believe the federal agencies have been too lax.
The memo notes that 2019 was an active year for enforcement, with the FTC & DOJ challenging four proposed transactions in court and requiring remedies in 17 more. In addition, five deals were abandoned due to opposition from regulators. In 2020, parties should expect close scrutiny of strategic deals, with structural divestitures to an identified buyer likely to remain the remedy of choice if antitrust concerns are present.
– John Jenkins