The Federal Trade Commission and Department of Justice have
continued their aggressive stance against proposed mergers that the
antitrust agencies perceive as harmful to competition. So far this
year, the FTC obtained a preliminary injunction blocking Staples
from acquiring Office Depot by focusing its arguments on national
competition. The parties subsequently abandoned the transaction.
The DOJ effectively blocked Halliburton from acquiring Baker Hughes
by rejecting a proposed remedy that it termed "among the most
complex and riskiest remedies ever contemplated in an antitrust
case." Halliburton reportedly proposed various divestiture
packages of assets generating up to $7 billion in revenue, which
the corporation argued would facilitate a platform for a new major
competitor (or competitors) to enter the markets. Halliburton
abandoned the proposed merger on May 1, 2016 after the DOJ filed
The DOJ has also filed actions seeking to block two significant
mergers in the health insurance industry, namely Anthem's bid
to acquire Cigna and Aetna's bid to acquire Humana. Although
the DOJ frames the mergers as five national companies merging into
three, the complaints – filed together on July 21, 2016
– focus on different alleged relevant antitrust markets. The
Aetna complaint highlights reduced competition between the
companies providing Medicare Advantage coverage. For
Anthem, the DOJ alleges that the merger is likely to cause
harm to: (1) large group employers in 35 metropolitan areas; (2)
national account customers for commercial insurance; and (3)
healthcare providers in the same 35 metropolitan areas. Both Aetna
and Anthem appear committed to litigating; we expect Aetna
to be decided in December and Anthem in early January.
Both the FTC and the DOJ are closely reviewing mergers in other
industries. The FTC is in the midst of examining Walgreens'
$17.2 billion acquisition of Rite Aid announced on October 27,
2015, and ChemChina's $43 billion cash deal for Syngenta
announced on February 3, 2016. The DOJ is looking into the $68.6
billion merger between Dow Chemical and DuPont announced on
December 11, 2015. We anticipate the DOJ to also closely
investigate the recently announced $66 billion takeover of
Monsanto Company by Bayer AG.
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