July 26, 2010

In Antitrust Blitz, FTC Targets Consummated Mergers

by Jenna Greene
The National Law Journal

There's no such thing as a done deal. That's the message from federal antitrust enforcers, who in recent months have ramped up attacks against consummated mergers, aggressively breaking up already combined companies.

In the past two weeks alone, the Federal Trade Commission announced two consent orders requiring companies to sell off assets from past mergers deemed anti-competitive. Court cases are pending as well. The FTC in May filed suit against The Dun & Bradstreet Corp., targeting its purchase of a competing education data provider 15 months after the fact, while the U.S. Department of Justice has challenged Dean Foods Co.'s acquisition of Foremost Farms last year. "If evidence of an anti-competitive effect emerges, we'll take a look at that," said Richard Feinstein, director of the FTC's Bureau of Competition. "Our track record makes that clear."

It's not new for the antitrust agencies on occasion to go after consummated deals. What's different is the number and variety of mergers under fire, from big deals like Fidelity National Financial Inc.'s $258 million purchase of LandAmerica Financial Group Inc.'s title insurance business to tiny transactions like Election Systems & Software Inc.'s $5 million deal to buy Premier Election Solutions Inc.

Since the start of fiscal year 2009, the FTC has challenged seven consummated mergers. By comparison, during the previous five years, the FTC averaged just one complaint per year.

As for the Justice Department, challenges to consummated deals have held steady -- two so far in 2010, one in 2009, one in 2008, two in 2007. But there's been a spike in civil investigative demands -- similar to subpoenas -- issued by the department, indicating heightened interest in the area. Seven such demands were issued in 2009, while five to date have issued in 2010, compared to two in 2008 and one in 2007.

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