A recent speech by Deputy Assistant Attorney General Leslie Overton emphasized the risk in consummating mergers that do not have to be reported under the HSR Act, but have (or may have) adverse effects on competition.  Ms. Overton emphasized that the Antitrust Division devotes substantial resources to, and challenges, non-reportable mergers.  The Antitrust Division learns about non-reportable mergers from a number of sources, including customers, industry contacts and trade publications.  A successful government challenge to a merger can have drastic consequences for the buyer.  The remedy is generally divestiture of key assets and not rescission.  The buyer may have paid substantial money for these assets, but will lose them without receiving much value.  In addition, any profits earned because of adverse effects of competition are subject to disgorgement.  And perhaps most significantly, the buyer and the seller can be sued for treble damages in class actions brought by injured customers.  In an article entitled Buyer Beware: Consummating Non-HSR Reportable Mergers May Prove Costly In The End, published by the ABA Antitrust Litigator, the author herein discusses these risks.  In sum, parties to non-reportable transactions face significant risks if they consummate an anti-competitive merger.

Author: Matthew S. Wild (Wild Law Group PLLC)