Under the Biden administration, the U.S. antitrust agencies, particularly the U.S. Department of Justice Antitrust Division (DOJ or Antitrust Division), were unusually resistant to negotiated merger remedies. Instead, they preferred to challenge deals or see transactions restructured outside the normal consent decree process, expressing skepticism as to whether remedies—even structural divestments—could effectively address antitrust concerns.
In fact, only six U.S. consent decrees were entered into during 2023 and 2024. Our global trends in merger control enforcement report gives more data and commentary. In the report, we predict a return to pre-Biden levels of merger control enforcement under the Trump administration's pro-business agenda, translating to a greater willingness to accept merger remedies.
This prediction looks set to play out in practice. In the space of just a couple of weeks, the U.S. agencies announced the clearance of five separate transactions subject to remedies.
Four of these involve structural divestments:
- Synopsys/Ansys: The Federal Trade Commission (FTC) will require Synopsys and Ansys to divest assets to address concerns over the impact of their tie-up on several software tools markets. The agency says these markets are critical for the design of semiconductors and light simulation devices. The remedy package includes the sale of assets from both parties (a so-called "mix-and-match" solution) to Keysight Technologies.
- Keysight/Spirent: The DOJ will require Keysight to divest Spirent's high-speed ethernet testing, network security testing and RF channel emulation businesses. Without these remedies, the agency is concerned that the transaction would harm competition in markets for specialized communications test and measurement equipment. Viavi will purchase the divestment businesses.
- Safran/Collins: Safran must sell its North American actuation business and related assets to address DOJ concerns over its acquisition of Collins' actuation and flight control business. The deal will recombine assets that were divested as part of a previous conditional clearance and, according to the DOJ, would likely result in higher prices, lower quality, and reduced innovation. Woodward is the remedy-taker.
- Alimentation Couche-Tard (ACT)/Giant Eagle: The FTC will require ACT to divest 35 gas stations to settle charges that the acquisition of 270 retail fuel outlets from Giant Eagle would likely lead to higher fuel costs for consumers in certain U.S. states. The gas stations will be sold to Majors Management. The remedies will also require ACT—for ten years—to give prior notice to the FTC before acquiring any stations the authority has deemed "competitively significant" in the affected local areas.
In addition to requiring structural divestments, these cases have other aspects in common:
- Each involves an upfront buyer. These are becoming a fairly standard requirement of some antitrust agencies, particularly in the U.S., and are used to minimize the risk that the divestments might not be effective.
- In three (all except ACT/Giant Eagle), in addition to allegations that the deals would eliminate head-to-head competition and lead to higher prices, the agencies claim a possible reduction in innovation. In recent years, we have seen antitrust authorities across the globe increasingly assess a transaction's impact on innovation. These cases show that this parameter of competition is now front and center of the U.S. agencies' merger control assessment.
- Those same three cases are global transactions that also required merger control approvals in jurisdictions outside the U.S. Many of the authorities coordinated their assessments. In Synopsys/Ansys, for example, the FTC notes that it cooperated closely with authorities in the EU, UK, Japan and South Korea. This can be beneficial to merging parties, enabling agencies to align on a global remedy solution as well as on timing. The UK Competition and Markets Authority (CMA)'s acceptance of remedies in Safran/Collins, for example, came on the same day as the DOJ's announcement in the case.
The fifth U.S. merger remedy announcement is different to the other four.
While it also concerned a global deal—Omnicom's acquisition of rival advertising agency IPG—in this case, the remedies are behavioral in nature. They comprise a series of provisions designed to address the FTC's concerns over potential anticompetitive coordination by Omnicom to "direct advertising away from media publishers based on the publishers' political or ideological viewpoints."
Deals cleared with behavioral commitments such as these are likely to be the exception rather than the norm. FTC head Andrew Ferguson notes that this is a "rare instance where the imposition of a behavioral remedy is appropriate" due to the characteristics of the market in question. Nevertheless, the case adds to the tally of remedy cases under Trump 2.0, which looks set to soon grow further with an unusual DOJ settlement during litigation.
Separately, Ferguson released a statement in which he sets out the case for merger remedies more generally.
He argues that a negotiated settlement that successfully prevents the merger's anticompetitive features can also permit the procompetitive aspects to proceed. He notes that settlement is cheaper—an important factor given the agencies' limited resources. And he says it avoids complicated litigation where parties may seek to present a remedy to the court (known as "litigating the fix").
But Ferguson also warns of the dangers of "inadequate or unworkable settlements." He believes that behavioral remedies should be treated with "substantial caution" and that the FTC's standards for evaluating remedies "should be exacting." The FTC plans to release a full policy statement on merger remedies in due course, which should tell us more.
Merger remedies may now be back on the table in the U.S. This is good news for parties to deals that may raise antitrust concerns. To take advantage of this shift in agency approach, parties should be prepared to offer robust solutions, at an early stage of the proceedings, that will comprehensively address antitrust concerns as fully as possible. Any procompetitive features of the deal should be clearly stated and evidenced, particularly where improvements to innovation, growth and investment are expected.
Read more about this trend, and how merging parties should respond, in our alert.
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