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Executive Summary: Trends in Merger Investigations and Enforcement at the U.S. Antitrust Agencies: Fiscal Years 2010–2019

This annual update offers context for evaluating possible outcomes of individual cases as they proceed through the regulatory review process. Unless otherwise noted, the highlights below refer to FY 2019, which covers October 2018–September 2019.

Transactions, Clearances, and Second Requests[i]

  • There were 2,030 reported transactions, only two more than in FY 2018.[ii] 

  • Clearances (i.e., transactions cleared for further agency investigation) as a share of reported transactions declined relative to the prior fiscal year. (page 4)

  • In contrast, second requests as a percentage of cleared transactions rose after a three-year decline. 

  • Nearly half of second requests involved transactions exceeding $1 billion. 

  • The Manufacturing industry had the largest share of reported transactions. 

Enforcement Rates by Industry

  • Between FY 2018 and FY 2019, the cross-industry Enforcement Rate Indicator (ERI) increased. This was driven by increases in the ERIs in the Manufacturing, Health Services, Pharmaceuticals, and Retail Trade sectors. (page 8)

  • Manufacturing, Health Services, and Pharmaceuticals continued to have large shares of clearances relative to their shares of reported transactions. 

  • Utilities, Retail Trade, and Manufacturing had the highest proportions of clearances converted to second requests. 

Challenges

  • The agencies challenged 38 mergers in FY 2019, one fewer than in FY 2018. As a fraction of reported transactions and as a fraction of second requests, challenges were below their FY 2010–FY 2018 average. 

  • About half (47 percent) resolved in consent orders or decrees. The parties abandoned or restructured their transactions in 39 percent of the challenges, and court proceedings were initiated in 13 percent. These percentages are broadly in line with historical trends observed between FY 2010 and FY 2018. 

In FY 2019, the agencies initiated five court proceedings, and state attorneys general initiated one court proceeding. Merging parties prevailed in all three court proceedings that went to trial.

  • The agencies initiated five court proceedings. Trials were held in two of these proceedings with the merging parties prevailing in both. 

  • In a rare move, attorneys general of nine U.S. states and the District of Columbia filed a suit in federal court to enjoin a proposed merger before the DOJ had completed its investigation and approved the merger with conditions. The merging parties eventually prevailed at trial. 

2020 Reported Merger Transactions

  • In the wake of the COVID-19 pandemic, merger filings fell by 49 percent in the third fiscal quarter of 2020 but rebounded to FY 2019 levels in August and September 2020. 

Read the report, Trends in Merger Investigations and Enforcement at the U.S. Antitrust Agencies: Fiscal Years 2010–2019

 

[i]  Clearances and second requests follow transaction filings with a delay. As a result, a transaction filing toward the end of a fiscal year could be cleared or issued a second request in the next fiscal year. The government’s HSR Reports tabulate transactions, clearances, and second requests in the fiscal year in which they occur. Therefore, the “share” of transactions cleared or receiving a second request could be artificially increased by recording a clearance or second request for a transaction reported toward the end of the prior year. It could also be artificially decreased by missing a clearance or second request for a transaction reported toward the end of the current year. There is no reason to believe that one of these biases systematically dominates the other. Similarly, for any given time period, the percentage of second requests to clearances, although informative, must be interpreted with caution. Some transactions receiving second requests in the current fiscal year may have been cleared in the previous fiscal year. Further, some second requests issued during the current fiscal year could be challenged in the next fiscal year.

[ii]    See HSR Reports FY 2010‒FY 2019, covering October 2010–September 2019. Throughout this report, the terms “reported merger transactions,” “reported transactions,” or “transactions” refer to what the HSR Reports describe as “adjusted transactions in which a second request could have been issued.” In addition to adjusted transactions, the HSR Reports include information on filings that could differ from transactions for a number of technical reasons, including that filings could be withdrawn before any agency action. Because this report compares the number of agency actions with the number of transactions on which the agencies could have acted, “adjusted transactions” are more relevant than filings.

Copyright ©2021 Cornerstone ResearchNational Law Review, Volume X, Number 354
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About this Author

Kivanç Kirgiz Litigation and Financial Analysis Cornerstone Research
Vice President

Kivanç Kirgiz has more than fifteen years of experience applying economic and financial analysis to issues arising in business litigation. Dr. Kirgiz has worked on many large-scale antitrust matters involving allegations of collusion, price fixing, bid rigging, monopolization, and exclusionary conduct. He has worked with counsel to develop case strategy and has managed case teams that have analyzed class certification, liability, and damages issues for testifying experts. Dr. Kirgiz has experience in a variety of industries, including healthcare, auto parts, insurance, energy, chemicals,...

202.912.8908
Bob Majure Cornerstone Research
Vice President

Bob Majure has wide-ranging expertise with merger and joint venture analysis, antitrust proceedings, regulatory actions, and appellate filings. He has experience across many industries, including agriculture, energy, health insurance, high tech, industrial equipment, media, professional services, telecommunications, and transportation.

Dr. Majure is the former Director of Economics for the Antitrust Division of the U.S. Department of Justice. In this role, he worked closely with the Deputy Assistant Attorney General for Economic Analysis and other members of the Antitrust Division...

202.912.8978
Kostis Hatzitaskos VP Antitrust Cornerstone Research
Vice President

Kostis Hatzitaskos coheads Cornerstone Research’s antitrust and competition practice. Citing his econometrics expertise and significant experience analyzing large datasets, Who’s Who Legal has recognized Dr. Hatzitaskos as a future leader in the competition field, describing him as “a great young economist, great communicator, and a pleasure to work with.”

Dr. Hatzitaskos leads merger review teams for merging parties and government agencies in investigations, both in the United States and internationally. He has extensive experience in...

312.345.7311
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