In the deal context, antitrust risk is often measured through market share and competitive overlap. Bumble Bee Foods LLC’s agreement to plead guilty to fixing prices for canned tuna, announced May 8, 2017, is a stark reminder of a separate antitrust risk of mergers and acquisitions—that, through close scrutiny of corporate records, the government will find evidence of other anticompetitive agreements or conduct. The plea agreement is also an important example of continuity in antitrust enforcement under the Trump administration.

The Backstory

Thai Union Group P.C.L., owner of Chicken of the Sea, announced its acquisition of Bumble Bee in December 2014. A year later, under scrutiny from the Department of Justice, the deal was called off. In an ominous press release, the government stated, “Our investigation convinced us—and the parties knew or should have known from the get go—that the market is not functioning competitively today, and further consolidation would only make things worse.”

Though the deal was off, the government’s investigation was not. On December 7, 2016, the Department of Justice announced that a Bumble Bee executive had agreed to plead guilty to fixing prices for packaged seafood. According to the Department of Justice, the plea was “the first to be filed in the Antitrust Division’s ongoing investigation into price fixing” in the industry. Two weeks later, another Bumble Bee executive agreed to plead guilty to similar charges.

Bumble Bee’s agreement to plead guilty marks the latest episode in this ongoing saga and is the first corporate plea to come from the government’s ongoing packaged-seafood probe. In connection with its plea, Bumble Bee has agreed to pay a criminal fine of at least $25 million, which could escalate to $81.5 million if the company is sold.

The Lessons

At the deal-making stage, antitrust risk is typically assessed in terms of the merging parties’ respective market shares in and other attributes of any industries of overlap. This analysis informs the parties of where the government is likely to focus and, relatedly, where divestitures may be required to address competitive concerns.

But, as Bumble Bee’s experience highlights, antitrust risk in mergers and acquisitions can take other forms. As part of merger investigations, government enforcers at both the Department of Justice and the Federal Trade Commission regularly solicit millions of documents from the merging parties and their customers and competitors. The attorneys and staff who review those documents are antitrust specialists. Agreements not to compete—whether for prices to end customers, bids for projects or hiring of employees—are bound to trigger concern.

Before proposing a merger, it pays to be aware of any such agreements—or any communications that would suggest such an agreement, even if none exists. As the Bumble Bee example and others make clear, the change in administration so far has not moved the dial in terms of antitrust enforcement. Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein—both experienced Department of Justice prosecutors—are likely to have conventional views on criminal liability. Without careful up-front review, a company stands to lose more than just its merger.