This Dechert memo reports on the timing of merger investigations during the second quarter of 2021.  Here are some of the highlights:

– Despite Big Tech headlines, the percentage of significant U.S. merger investigations involving technology companies was below the average for the last decade. By contrast, merger investigations in traditional sectors like industrial products and services and financial services increased. Meanwhile, healthcare and pharmaceuticals remained the largest focus of significant U.S. merger investigations, in line with historic averages.

– The 11 significant U.S. merger investigations concluded during the first half of 2021 under the Biden Administration (5 DOJ; 6 FTC) are well below the 17 concluded in the first half of 2020 (6 DOJ; 11 FTC), but close to the 12 concluded at the start of the Trump Administration in the first half of 2017 (4 DOJ; 8 FTC).

– The duration of significant U.S. merger investigations declined compared to last quarter. The average duration for first half of 2021 was 12.1 months, but there remains a wide disparity for individual investigations even within the same industries.

– An announced joint review of existing merger guidelines encouraged by the White House, combined with new leadership at both antitrust agencies, foreshadows potential bigger changes ahead.

Another thing that the first half stats make clear is that the agencies are ratcheting up enforcement pretty significantly. The memo points out that almost half of the significant U.S. merger investigations that were wrapped-up during the first half of 2021 resulted either in the filing of a complaint or a decision to abandon the transaction. By comparison, in the first half of the Trump administration’s first year, only two of 12 significant merger investigations concluded with a complaint or an abandoned transaction, and more investigations concluded in a complaint or an abandoned transaction in the first half of 2021 than in either 2017 or 2018.

– John Jenkins

The Committee on Foreign Investment in the United States recently published its Annual Report to Congress on all notices and declarations filed with CFIUS in 2020 and all reviews or investigations completed during the year.  This Fried Frank memo summarizes the results of the report and discusses emerging trends.  This excerpt discusses CFIUS’s 2020 investigations:

In 2020, 47% (88) of the 187 notices went into the 45-day investigation phase, following the 45-day review phase. This is consistent with 2019, when 49% of notices went into the investigation phase. The clearance rate during the review period has increased considerably since the August 13, 2018 effective date of FIRRMA, which extended the statutory review period from 30 to 45 days.

In 2017, prior to the implementation of FIRRMA, 73% of notices proceeded to the investigation phase. Similarly, 76% of notices filed in 2018 before FIRRMA’s effective date proceeded to investigation. The rate of investigation in 2020 may reflect not only CFIUS’s time pressure easing as a result of the additional time in the review period, but also the decrease in inbound sensitive Chinese investment that often triggered a CFIUS investigation.

Transaction notices were filed from 40 different countries in 2020. Japan was the largest filer with 19. China was second with 17 notices, which the memo points out continued a 3 year downward trend in filings by Chinese acquirers, which peaked at 60 in 2017.

– John Jenkins