Category Archives: Mergers & Acquisitions

Trump Administration Signals Strong Approach to Antitrust Enforcement

by Sheila R. Adams James, Ronan P. Harty, Christopher Lynch, Mary K. Marks, Suzanne Munck af Rosenschold, Howard Shelanski, Caroline Ziser Smith, and Jesse Solomon

Top left to right: Sheila R. Adams James, Ronan P. Harty, Christopher Lynch, and Mary K. Marks. Bottom left to right: Suzanne Munck af Rosenschold, Howard Shelanski, Caroline Ziser Smith, and Jesse Solomon. (Photos courtesy of Davis Polk & Wardwell LLP)

As the first month of the Trump administration comes to a close, we provide updates on key developments in Trump 2.0 antitrust enforcement, particularly focused on merger review.  Early hints suggest that the Trump administration may be more measured in moving away from the Biden administration’s aggressive approach on antitrust than many observers initially anticipated.

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FTC’s Consent Order Against Marriott: Expectations for Reasonable Security

by Erez Liebermann, Jim Pastore, Christopher S. Ford, Michael Bloom, Mengyi Xu, Achutha Raman, and Michelle Shen  

Photos of the authors

Top left to right: Erez Liebermann, Jim Pastore, Christopher S. Ford, Michael Bloom.
Bottom left to right: Mengyi Xu, Achuta Raman and Michelle Shen. (Photos courtesy of the authors.)

Introduction

On December 20, 2024, the Federal Trade Commission (the “FTC”) finalized a consent agreement (“Consent Order”) with Marriott International, Inc. and its subsidiary Starwood Hotels & Resorts Worldwide LLC (collectively, “Marriott”) to settle allegations that Marriott failed to implement reasonable data security measures, resulting in three large data breaches from 2014 to 2020 and affecting more than 344 million customers worldwide. With obligations extending 20 years, the Consent Order requires Marriott to, among other remedial steps, implement a comprehensive information security program (“ISP”) with prescribed security measures, the effectiveness of which will be subject to a third-party independent biennial assessment. Key elements of the required ISP include multi-factor authentication (“MFA”), encryption, asset inventory, written documentation, and vulnerability and patch management. The final Consent Order is materially identical to the proposal announced on October 9, 2024.

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M&A Antitrust Alert: FTC Imposes Significant Gun-Jumping Penalty for Unlawful Pre-Merger Coordination Among Crude Oil Producers

by Reb D. Wheeler, William H. Stallings, Scott P. Perlman, Oral D. Pottinger, Gail F. Levine, Andrew J. Stanger, Joshua W. Eastby, and Brian E. Saleeby 

Top left to right: Reb D. Wheeler, William H. Stallings, Scott P. Perlman, and Oral D. Pottinger. Bottom left to right: Gail F. Levine, Andrew J. Stanger, Joshua W. Eastby, and Brian E. Saleeby (Photos courtesy of Mayer Brown LLP)

M&A practitioners have long regarded the integration planning and execution process as one of the keys to a successful M&A transaction. However, in deals subject to pre-merger antitrust clearance, it is critical to navigate the line between deal provisions and arrangements intended to preserve the value of the target business and allow the parties to prepare for post-closing integration, versus those that could result in the buyer exerting control over the target business or accessing competitively sensitive information prior to closing in a manner that could be seen as potentially harming competition in violation of the US antitrust laws. This conduct, commonly referred to as “gun-jumping,” can result in investigations by the Federal Trade Commission (FTC) and the Justice Department’s Antitrust Division (DOJ) as well as significant civil penalties for violation of the pre-merger notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”).

A noteworthy complaint filed by the DOJ on January 7, 2025, at the request of the FTC, serves as a reminder of the risks to merging parties of not properly navigating these considerations during the pre-closing period. DOJ’s complaint alleges that the Defendants, merging crude oil producers XCL Resources Holdings, LLC (“XCL”), Verdun Oil Company II LLC (“Verdun”), and EP Energy LLC (“EP”), engaged in gun jumping in violation of the HSR Act by allowing Verdun and XCL to immediately assume control over certain of EP’s day-to-day business operations and by exchanging non-public, competitively sensitive information (CSI) before the HSR Act’s waiting period had elapsed. The proposed settlement provides for a $5.6 million civil penalty, which the FTC heralded as “the largest dollar penalty imposed for a gun-jumping violation in U.S. history.”[1]

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Five Must-Watch Antitrust Storylines for 2025

by Gail F. Levine, Rachel J. Lamorte, Lauren E. Knudson, Mia Ruiz, William H. Stallings, and Ora Nwabueze

Photos of the authors

Top left to right: Gail F. Levine, Rachel J. Lamorte, and Lauren E. Knudson. Bottom left to right: Mia Ruiz, William H. Stallings, and Ora Nwabueze. (Photos courtesy of Mayer Brown)

Many businesses and organizations are in the unique position of having already observed four years of antitrust enforcement under President-elect Donald J. Trump. That, plus the well-publicized records of his announced nominees for antitrust positions, provides heightened insight into enforcement priorities for his second term.

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The FTC Finalizes Sweeping Changes to HSR Reporting Obligations

by Ilene Knable Gotts, Christina C. Ma, Monica L. Smith and Gray W. Decker

From left to right: Ilene Knable Gotts, Christina C. Ma, Monica L. Smith and Gray W. Decker. (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

On October 10, 2024, the Federal Trade Commission (“FTC”), with the concurrence of the Antitrust Division of the Department of Justice (“DOJ”), announced the FTC’s unanimous vote to adopt a final rule implementing significant changes to the reporting obligations under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”).  Though not as extensive and burdensome as the original proposed changes (see our prior memo analyzing the proposed changes), these changes will increase parties’ filing burden and limit their ability to file quickly, even in non-problematic transactions.  Absent judicial intervention, the final rule will become effective 90 days after it is published in the Federal Register (i.e., approximately mid-January 2025).  The FTC also announced that, once the final rule goes into effect, it will lift the three-and-a-half-year “temporary suspension” of granting early termination of the HSR waiting period in transactions not needing further agency investigation.

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Wachtell Publishes Financial Institutions M&A Guide for 2024

Editor’s Note: This post contains excerpts from Wachtell, Lipton, Rosen & Katz’s Guide: “Financial Institutions M&A 2024: Seizing Opportunities, Navigating Pitfalls,” the full version of which is available here. 

by Ed Herlihy, Richard Kim, Nick Demmo, David Shapiro, Matt Guest, Mark Veblen, Brandon Price, and Jake Kling

Photos of the authors

Top left to right: Ed Herlihy, Richard Kim, Nick Demmo, and David Shapiro
Bottom left to right: Matt Guest, Mark Veblen, Brandon Price, and Jake Kling
(Photos courtesy of Wachtell, Lipton, Rosen & Katz)

KEY TRENDS IN FINANCIAL INSTITUTIONS M&A DURING 2023

I. M&A FALLS FOR A SECOND CONSECUTIVE YEAR OWING TO GEOPOLITICAL, MACROECONOMIC AND REGULATORY FACTORS

Financial institutions M&A fell for the second year in a row in 2023. Like most other sectors of the economy, financial institutions faced significant M&A headwinds during the year, including geopolitical instability, elevated inflation, high interest rates, challenging and often volatile equity markets, enhanced antitrust risks and uncertainty, and recessionary fears that softened only towards the end of the year.

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Semiconductor Chips and Cloud Computing: A Quote Book

by Staff at the Federal Trade Commission’s Office of Technology

The FTC’s Tech Summit on AI[1] highlighted three panels that reflect different layers of the AI tech stack – hardware and infrastructure, data and models, and front-end user applications. Here, we publish the first in a three-part series of “Quote Books” summarizing each of the three panels. This first quote book is focused on hardware and infrastructure, including semiconductor chips and cloud computing.

 

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DOJ Continues to Modernize its Criminal Antitrust Enforcement Strategy

by Richard A. Powers

(Photo courtesy of the author)

Over the past few years, the Justice Department has been hard at work on a comprehensive update to the way it detects, investigates, and prosecutes price-fixing cartels. Several recent announcements, including at last week’s ABA White Collar Conference, preview the DOJ Antitrust Division’s next steps in this generational shift—the goals of which are to refine disclosure incentives, promote individual accountability, and obtain trial convictions.

First, on March 7, 2024, Deputy Attorney General Lisa Monaco announced the DOJ is kicking off a 90-day whistleblower “policy sprint”; the finish line is a new program to complement existing regulators’ programs, rewarding qualifying whistleblowers for bringing non-public, previously unknown misconduct to the DOJ’s attention. The Antitrust Division has long sought to encourage individual self-reporting as a complement to its corporate VSD policy, so expect that this initiative will aim to improve that incentive structure. Next, the DOJ updated the Justice Manual to incorporate the M&A safe harbor policy that it announced last fall. Notably for antitrust practitioners, the JM updates included changes to the Antitrust Division’s leniency policy that provide much-needed clarification on how companies that detect potential collusion at an M&A target can avoid inheriting those liabilities by promptly reporting to DOJ. Third, senior Antitrust Division officials continue to emphasize that they are focused on developing investigations through affirmative investigative techniques, such as wiretaps and whistleblowers.

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U.S. M&A Antitrust Enforcement: 2023 and the Year Ahead

by Ilene Knable Gotts, Nelson O. Fitts, Damian G. Didden, Christina C. Ma, and Monica L. Smith.

Photos of Authors

From left to right: Ilene Knable Gotts, Nelson O. Fitts, Damian G. Didden, Christina C. Ma, and Monica L. Smith (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

In 2023, leadership of the Federal Trade Commission and the Antitrust Division of the Department of Justice maintained an aggressive approach to merger enforcement, investigating and challenging transactions on the basis of a broad range of theories of harm articulated in the agencies’ newly issued 2023 Merger Guidelines. Although some transaction parties abandoned their deals at the prospect of a lengthy investigation or litigation, others defended their transactions in court, where the agencies met with mixed success. The FTC and DOJ also continued to disfavor merger settlements, entering into only three such consent decrees in 2023. 

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A View from Abroad: Unpacking DOJ’s M&A Safe Harbor Policy, Part II

by Joel M. Cohen, Marietou Diouf, James Hsiao, Francisco Málaga Diéguez, Aleksandra Oziemska, Jean-Pierre Picca, Anneka Randhawa, Jean-Lou Salha, Dr. Daniel Zapf, Dr. Nicolas Rossbrey, and Dr. Tine Schauenburg

Photos of the authors.

Top left to right: Joel M. Cohen, Marietou Diouf, James Hsiao, Francisco Malaga, Aleksandra Oziemska, and Jean-Pierre Picca. Bottom left to right: Anneka Randhawa, Jean-Lou Salha, Daniel Zapf, Dr. Nicolas Rossbrey, and Dr. Tine Schauenburg (Photos courtesy of White & Case LLP)

On October 4, 2023, United States Deputy Attorney General (DAG) Lisa Monaco announced a new Department of Justice (DOJ) Mergers & Acquisitions Safe Harbor policy that encourages companies to self-disclose criminal misconduct discovered by an acquiring company during the acquisition of a target company.  Under the policy, the acquiring party will receive a presumption of criminal declination if it promptly and voluntarily discloses criminal misconduct, cooperates with any ensuing investigation, and engages in appropriate remediation, restitution and disgorgement. While the DOJ has offered little guidance as to what it might expect from a company that self-discloses under the policy, many jurisdictions outside the United States offer corporate self-disclosure and cooperation incentives. This alert analyzes several of those practices in Europe and Asia, and what can be learned from their application. Continue reading →