2024 was a significant year for merger enforcement worldwide. In the United States, the Biden administration continued the aggressive approach reflected in the revamped Merger Guidelines issued in December 2023. In Europe, the President of the European Union appointed a new Commissioner for Competition, Teresa Ribera—signaling an increased focus on promoting innovation and protecting European businesses—while the European Commission suffered a major setback in the courtroom. Asia was a mixed bag: Enforcers scaled back regulatory hurdles for lower-risk deals yet continued to scrutinize more complex transactions. And developments in Australia and New Zealand, including Australia's proposal of a new premerger notification regime, signal increased scrutiny of future M&A deals.
To state the obvious, the developments in Europe, Asia, and Australia/New Zealand are far more helpful in predicting future outcomes than the developments in the United States. Elections matter, and the Trump administration may scale back—if not unwind entirely—a number of its predecessor's more ambitious changes. But some are sure to stick, and efforts to restore prior enforcement practices may take time to implement. We therefore believe that last year's events—in the United States and abroad—will provide valuable insight to companies exploring potential M&A transactions in 2025 and beyond.
UNITED STATES
Despite the Biden administration's tough rhetoric on merger enforcement, M&A transactions continued across industries and deal sizes. The vast majority of transactions closed after the initial 30-day Hart-Scott-Rodino ("HSR") waiting period, without a Second Request or other delay. And while the Biden administration focused on certain industries—including energy, agriculture, health care, tech, and private equity—M&A activity in those sectors continued, too, without substantial enforcement.
In fact, a number of sizeable transactions closed in 2024, including in energy (ExxonMobil's $64.5 billion acquisition of Pioneer, Chevron's $54 billion acquisition of Hess, and Diamondback's $26 billion acquisition of Endeavor Energy Partners); tech (Cisco's $28 billion acquisition of Splunk); agriculture (Koch Ag & Energy Solution's acquisition of Iowa Fertilizer Company); and health care (Saint Luke's Health System of Kansas City's merger with BJC HealthCare; Amolyt Pharma's $1.05 billion acquisition by AstraZeneca). Private equity transactions also continued, including Roark Capital's $9.6 billion acquisition of Subway.
ENFORCEMENT POLICY: SUBSTANTIAL SHIFTS, AT LEAST FOR NOW
In the United States, this past year saw the culmination of four years of work by Biden officials to overhaul federal antitrust review of mergers, including both in substance (e.g., the new Merger Guidelines) and procedure (e.g., changes to the HSR premerger notification form).
New Merger Guidelines
2024 saw the first full year of antitrust merger review under the DOJ and FTC's 2023 Merger Guidelines (see Jones Day's prior analysis, "The Hammer Falls: U.S. Antitrust Agencies Issue Final Antitrust Merger Guidelines" and "Merger Guidelines—1960s Manifesto Style"). The new Guidelines represent a complete overhaul of the DOJ and FTC's substantive merger review, including, among others:
- Lowered market share thresholds. The Merger Guidelines lower significantly the market shares and concentration levels at which the agencies consider a merger presumptively anticompetitive.
- New types of transactions subject to scrutiny. The Merger Guidelines explicitly call out vertical mergers, so-called "conglomerate" mergers, serial or roll-up transactions, and acquisitions of nascent competitors, among others, as subject to heightened antitrust scrutiny—each a substantial shift from the prior guidelines. In addition, the Merger Guidelines target mergers involving multi-sided platforms.
- New theories of harm. The Merger Guidelines identify a broader list of potential anticompetitive effects, including blocking access of critical inputs to rivals, acquiring "nascent" and other potential competitors, facilitating anticompetitive information exchanges, and advancing trends toward concentration.
- Labor in focus. The Merger Guidelines also introduce new guidance for assessing a merger's impact on competition for labor, including harm to competition in labor markets; the impact of a transaction on wages, salaries, and benefits; and jobs lost due to a transaction.
Despite these changes, the vast majority of transactions subject to U.S. merger review were still cleared within 30–60 days.
Attention to Private Equity
Consistent with the new Merger Guidelines' reference to serial or roll-up transactions, the Biden administration continued to focus on private equity transactions in 2024. In May, for example, the agencies jointly issued a request for information regarding public opinion on serial acquisitions and roll-up strategies. That request for information, as reported by the FTC, complemented a parallel inquiry about "how certain health care market transactions by private equity firms and other corporations may increase consolidation and generate profits while threatening patients' health, workers' safety, quality of care, and affordable health care for patients and tax-payers." Despite the agencies' increased scrutiny of private equity, however, we did not observe any noticeable uptick in enforcement actions with respect to transactions involving private equity firms.
New HSR Form
In October 2024, the FTC issued a final rule that will increase the scope and burden of preparing a premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act. The FTC's new rule, expected to go into effect in early 2025, is a material change from the prior HSR rules and will likely lengthen the merger timeline—even for transactions without substantial overlaps (see Jones Day's prior analysis, "DOJ and FTC Release Final Rule Expanding HSR Premerger Filing Requirements"). Key changes include:
- Detailed descriptions of horizontal overlaps, including the "principal categories" of products and services that compete, including products in development that "could" compete with the merging party. This requirement is similar to many non-U.S. merger filings, and firms that have made such filings may remember the difficulty in assessing whether certain tangentially related products "compete."
- Detailed descriptions of supply relationships, including a description of all products sold to the merging party and identifying all sales to and purchases from the merging party as well as to other businesses that use the product to compete with the merging party.
- New document and data requests, including certain regularly prepared business plans presented to the company's CEO (unrelated to the transaction) as well as documents relating to the transaction provided to the "supervisory deal team lead."
The time needed to prepare an HSR filing may increase by several weeks—in fact, even the FTC expects the time needed to prepare an HSR filing will triple. Parties to potential transactions should plan ahead, up to and including compiling the data and information needed for the new HSR form well in advance of signing, to mitigate any delays to their transaction.
Looking Ahead
We expect the second Trump administration will make substantial changes to these procedures and processes.
The 2023 Merger Guidelines may be revised, or even rescinded, by Trump's FTC and DOJ. At least one Republican Commissioner, Melissa Holyoak, is on record stating she would consider rescinding the Guidelines. However, the Trump administration could also leave the Merger Guidelines as is, maintaining optionality but in practice adhering to a more traditional and orthodox antitrust approach.
But the new HSR Form is less likely to change absent action by Congress. The FTC Commissioners voted unanimously in favor of the new rules, reflecting compromises among the Democrats and Republicans. There may be little appetite to renegotiate in the near term.
TRENDS IN REMEDIES: EVEN DIVESTITURES FACED SKEPTICISM
One area in which the Biden administration notably diverged from past administrations relates to merger remedies. In particular, Biden administration officials announced that remedies of any kind (either structural or behavioral) are disfavored, a major shift from prior administrations. Accordingly, 2024 saw just a handful of pre-complaint settlements. Although this shift away from formal remedies can be a benefit to merging parties, it nevertheless presents new strategic considerations that firms must consider early—ideally before filing HSR—otherwise, they can create substantial impacts on both the scope and timing of the proposed transaction.
Divestitures and Other Structural Remedies Continue to Be Disfavored
In January 2022, U.S. antitrust enforcers announced an intention to shift away from structural divestitures pursuant to a consent decree, instead suggesting they would require parties to "fix" the anticompetitive portion of any transaction before filing HSR. That, according to the FTC and DOJ, would avoid the need for either agency to either negotiate the scope of any such divestiture or monitor the parties' compliance with consent decrees.
One example was Global Partners' acquisition of certain petroleum terminals from Gulf Oil. After a 16-month investigation, the parties amended their purchase agreement to carve out a terminal in South Portland, Maine, over which the FTC had expressed concerns. Under prior administrations, the FTC may have been willing to accept an agreement to divest the terminal within a reasonable period of time post-close.
FTC and DOJ Imposing Non-Structural Remedies to Address Non-Merger Concerns
In 2024, the FTC and DOJ increasingly used the HSR merger review process to address concerns not directly related to the at-issue transaction. In particular, in 2024, the FTC has imposed conditions on a handful of transactions relating to the composition of the combined firm's board of directors post-transaction. Two examples include the ExxonMobil/Pioneer transaction, in which the FTC required ExxonMobil to enter into a consent order preventing the founder and former CEO of Pioneer from either sitting on ExxonMobil's board of directors or serving in an advisory capacity post-transaction. There was no finding—by the FTC or otherwise—of any independent antitrust violation by that individual. But the FTC nevertheless asserted that his appointment would violate Section 7 of the Clayton Act, and prohibited Exxon from appointing him to its board. The FTC required a similar consent order in the Chevron/Hess transaction.
Looking Forward
The Trump administration is likely to return toward some acceptance of divestitures, but such remedies are unlikely to be as common as before. Even traditional antitrust enforcers at both agencies now assert that divestitures are frequently ineffective or cause long-term entanglements. Consequently, we expect some skepticism toward divestitures to continue forward.
As for non-merger remedies, both consent orders were highly criticized by the two Republican commissioners at the FTC. This approach is unlikely to continue under the Trump administration.
MERGER LITIGATION: SOME OF THE OLD, SOME OF THE NEW
Both the DOJ and FTC continue to challenge potentially anti-competitive mergers in federal court, although the overall number of cases filed in 2024 is similar to what was seen under the Obama and Trump administrations. Between the agencies, there were six mergers challenged in court (three by the DOJ and three by the FTC), which is consistent with the average of five mergers challenged annually from 2011 to 2023.
Even so, the Biden administration in particular has used litigation—and, sometimes, the mere threat of litigation—to coerce parties to abandon their transactions. Yet the agencies have had a mixed record before Article III courts, including one high-profile 2024 loss in Novant/Community Health. Merging parties must be prepared to take their transaction before an Article III court, in addition to effective and early advocacy before the agencies.
DOJ/FTC Litigating New Theories of Harm
The complaints filed by the DOJ and FTC in 2024 demonstrate the agencies' shift toward the more-aggressive 2023 Merger Guidelines (discussed further above). While several matters followed the usual, orthodox approach, several cases filed by the agencies asserted new theories of harm, including a vertical merger (Tempur Sealy/Mattress Firm) and at least one challenge focused on competition for labor (Kroger/Albertsons).
Most notably, a substantial part of the FTC's case in Kroger/ Albertsons involved an alleged loss of competition for unionized grocery store workers (in addition to alleged lost competition among grocery stores). In its Complaint and throughout trial, the FTC asserted that a combined Kroger/Albertsons would reduce the bargaining leverage for the union representing Kroger's and Albertsons' combined 700,000 employees nationwide, resulting in slower wage growth, deteriorated working conditions, and reduced employee benefits. The district court ultimately rejected this theory as based on insufficient evidence, but acknowledged in dictum that "traditional antitrust analysis" may be applied to labor markets.
Perhaps because of this shift to more novel theories, the agencies' track record has been mixed, including high-profile trial losses in Microsoft/Activision (2023) and Novant/Community Health (2024). For example, in Novant, the trial court denied the FTC's attempt to enjoin Novant's acquisition of two hospitals after concluding the FTC failed to carry its burden of showing a substantial lessening of competition. In particular, the trial court emphasized that Novant's and Community Health's facilities were not strong competitors, that other competitors were actively entering and expanding in the FTC's defined market, and that Community Health's hospitals were likely to deteriorate and ultimately close down but for the transaction. However, the parties subsequently abandoned the transaction after the FTC appealed and the Fourth Circuit issued an injunction pending appeal (without an opinion).
Mainstream Antitrust Analysis Still Applies
While several cases involve novel theories of harm, the agencies' majority of litigated cases involved orthodox antitrust analysis—i.e., focusing on mergers between horizontal competitors with high combined market shares.
For example, in January 2024, the DOJ successfully challenged JetBlue's proposed acquisition of Spirit Airlines, asserting that the transaction would eliminate competition in the low-cost carrier airline market. The trial court agreed, finding that the merger would eliminate a competitor on many popular routes and that the combined firm would further reduce capacity on those routes, likely leading to higher airfare. While the parties asserted the transaction was intended to allow JetBlue to better compete with the so-called "legacy" airlines, the DOJ argued—and the court agreed—that Spirit represented a uniquely disruptive competitor in the industry that would not be replaced post-transaction.
October brought another win for the government, when the FTC obtained a preliminary injunction blocking Tapestry's acquisition of Capri Holdings, a case involving two manufacturers of handbags. Much of the trial (and public criticism) focused on the FTC's narrow market definition of "affordable luxury" handbags. However, apart from the aggressive market definition, both the FTC and trial court applied a traditional horizontal merger analysis, concluding that the transaction— which would have resulted in a combined firm with nearly 60% market share—was likely to result in higher prices, fewer discounts and promotions, and decreased innovation.
Finally, in December 2024, a federal district court in Oregon and a Washington state court both enjoined the Kroger/ Albertsons merger. Both courts found that the deal would harm competition in the market for supermarkets. The courts credited the plaintiffs' expert evidence that the merger would increase concentration to presumptively unlawful levels under either the 2010 or 2023 Merger Guidelines, and that the parties' head-to-head competition was sufficiently close that the merger may lead to unilateral anticompetitive effects.
EUROPE
The European Commission's ("EC") ability to scrutinize acquisitions of sub-threshold European startups, including so-called "killer acquisitions," is under attack following the European Court of Justice's ("ECJ") landmark ruling in Illumina/Grail, which annulled the EC's disputed decision to accept a referral of a non-reportable transaction. Meanwhile, the EC cleared several high-profile mergers in the airline industry, and the appointment of a new Competition Commissioner reinforced the policy trend toward safeguarding European innovation. In the United Kingdom, enforcers updated the phase 2 review process to improve transparency, while Parliament enacted new legislation intended to expand competition and consumer protection law in the digital markets. DEALMAKERS RELIEVED ... FOR NOW—ECJ SHUTS DOWN ATTEMPTED ANTITRUST REVIEWS OF NON-REPORTABLE TRANSACTIONS Dealmakers and lawyers in Europe welcomed the ECJ's seminal Illumina/Grail judgment of September 3, 2024.1 Illumina, a U.S. biotechnology company, convinced the ECJ to overturn the European General Court's ("GC") 2022 ruling that the EC had jurisdiction to challenge Illumina's €8 billion acquisition of Grail, a U.S. biotechnology company. The transaction was not notifiable under EU or national merger control regimes, as Grail had no customers, contracts, or revenues in the European Economic Area.
ECJ Rejects EC's Power Grab
In overruling the GC and annulling the EC's controversial decision to accept referrals from EU Member States of non-reportable concentrations (i.e., mergers) under Article 22 EUMR, the ECJ held that the GC erred in interpreting the European Union Merger Regulation ("EUMR") and that the EC's misguided interpretation of Article 22 EUMR "undermines the effectiveness, predictability, and legal certainty that must be guaranteed to the parties to a concentration."2 The EC's attempt to widen its regulatory oversight and scrutiny of minor deals, notably in view of catching "killer acquisitions," had caused deep concerns among companies. Businesses worldwide welcomed the ECJ's unequivocal affirmation of the "cardinal importance" of jurisdictional thresholds in achieving the objectives of predictability and legal certainty in merger control. For additional information about this landmark decision, see Jones Day Commentary, "EU Court Holds Back Expansion of Antitrust Reviews to Non-Reportable Transactions," September 5, 2024.
Aftermath
In addition to challenging the EC's new approach to Article 22 EUMR, Jones Day also represented Biocom in support of Illumina's separate challenge before the GC (Case T-709/22) of the EC's decision prohibiting the deal. In the wake of the ECJ judgment, the EC announced its withdrawal of that decision, thereby abandoning the procedure and eliminating the €432 million "gun-jumping" fine imposed against Illumina for closing the transaction while the EC's review was pending. Also subsequent to the Illumina/Grail judgment, on September 18, 2024, the EC announced the withdrawal of all initial referral requests to review Microsoft's acquisition of certain assets of Inflection AI, a U.S.-based artificial intelligence startup. The transaction did not reach EU notification thresholds and was not notified in any Member State
Still Hunting
Although the EC must withdraw, or very significantly amend, its guidelines on Article 22 EUMR, the EC's sights remain aimed at so-called "killer acquisitions."
The outgoing Commissioner for Competition Margrethe Vestager spoke of exploring ways to address killer acquisitions following the Illumina/Grail ruling, such as:
- Revising the EUMR to include a "safeguard mechanism" to allow the review of sub-threshold mergers. Reforms could reportedly extend the EC's jurisdiction over mergers involving companies that generate most of their revenue outside Europe and introduce a new threshold for taking over scrutiny of a merger, based on the deal's value rather than existing turnover criteria.
- Member States expanding their own competition authorities' powers to "call in" transactions not meeting national turnover thresholds when it finds that these pose concrete risks for competition, thereby enabling more referrals under the established Article 22 EUMR process. Eight Member States (Denmark, Hungary, Ireland, Italy, Latvia, Lithuania, Slovenia, and Sweden) have already introduced such powers.
Undeterred by the Illumina/Grail judgment, on October 31, 2024, the EC accepted Italy's Article 22 EUMR referral request to review Nvidia's proposed acquisition of AI startup Run:ai. The Italian competition agency had called in the below-threshold transaction, which was announced publicly about six months earlier. Notwithstanding the small revenues in Italy and the significant passage of time, the EC accepted the referral on the basis that it was best situated to examine the transaction, given its knowledge and case experience in related markets. The EC cleared the transaction in late December.
READY FOR TAKEOFF: THE EC CLEARS TWO AIRLINE ACQUISITIONS
The year also saw the combination of major players in the air transport industry, with the EC's clearance of Korean Air's proposed acquisition of Asiana Airlines on February 13, 2024, and the clearance of the acquisition of joint control over ITA Airways by Lufthansa and the Italian Ministry of Economy and Finance on July 3, 2024.
Korean Air/Asiana
In Korean Air/Asiana, Jones Day represented Korean Air in securing clearance following the EC's in-depth investigation of the company's $1.6 billion acquisition of Asiana Airlines. The transaction drew close scrutiny from the EC and antitrust authorities in Korea and worldwide. Jones Day advised Korean Air through the EC's investigation, working to rebut the EC's allegations that the merger would likely reduce competition for air passenger services on four routes between South Korea and Europe, as well as air cargo services between South Korea and Europe.
Although several recent airline mergers were abandoned after opposition from the EC, the Korean Air deal was cleared subject to novel commitments that depart from historically accepted remedies for airline mergers. This included a "fix it first" type of remedy for air passenger services (addressing the EC's concerns by divesting slots/assets before the deal closed), and an "upfront buyer" remedy in the air cargo services market (securing a buyer for divested assets as a precondition for approval). This novel structure is expected to serve as a significant precedent for future aviation cases.
Lufthansa/ITA Airways
In Lufthansa/ITA Airways, the EC raised concerns over the entities' overlap on flight routes and potential dominance at the Milan Linate airport. In response, the acquirers put forth remedies, under which the transaction would close following the EC's approval of suitable remedy takers for each of the short-haul, long-haul, and Milan Linate commitments. The EC would assess the suitability of remedy takers in the context of a separate buyer approval procedure.
Both decisions are significant as they mark the EC's shift toward more stringent remedies in airline mergers.
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