Frequently, United States firms engaged in mergers and acquisitions must obtain foreign as well as U.S. antitrust clearance. Periodically, U.S. and foreign antitrust regulators disagree on the competitive implications of the deal, and transactions involving two U.S. parties can be delayed or blocked by foreign antitrust enforcers. Such a situation is currently unfolding in connection with Oracle Corporation’s proposed acquisition of Sun Microsystems, Inc. Although the U.S. Department of Justice (DOJ) approved the transaction in August, the European Commission has raised concerns of its own related to the transaction and has issued a Statement of Objections (the equivalent of civil complaint in the United States). The Commission’s investigation is another example of divergent antitrust investigations between the United States and EU delaying a domestic transaction.
Oracle agreed to buy Sun for $7.4 billion in April. Shareholders approved the merger in July, followed by DOJ approval in August. The European Commission issued its Statement of Objections on November 9. The Commission’s Objections led the DOJ to take the unusual step of issuing a statement in response to the Commission’s Statement of Objections, reasserting that the transaction was unlikely to be anti-competitive.
On November 24, a group of 59 United States Senators, led by Orrin Hatch (R-Utah) and John Kerry (D-Mass) sent a letter requesting that the Commission complete its investigation as expeditiously as possible. Although the Senators acknowledged the Commission’s sovereign right to thoroughly investigate transactions affecting the European markets, the letter noted that the Sun subsidiary in the specific market examined by the Commission only generates €17 million in revenue, while other competitors have capitalizations of tens of billions of Euros. The letter also explained that Sun is in a fragile economic situation and additional delay could impact the company’s ability to continue to employ thousands of workers. The Commission’s investigation is an example of the dangers facing a domestic transaction when the transaction requires foreign competition approval.
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