U.S. and global M&A are booming, but companies cannot assume that all deals will avoid federal challenge. According to a Thomson Reuters report, the dollar value of U.S. deals announced during the first quarter of 2018 was $443.7 billion, up 59 percent from Q1 2017. Similarly, the dollar value of global deals announced during Q1 2018 was $1.2 trillion, up 60 percent from Q1 2017. These global numbers are the highest since recordkeeping began in 1980.
In response to the boom, U.S. antitrust authorities are showing willingness to approve controversial transactions (with the notable exception of AT&T’s proposed $85 billion acquisition of Time Warner), but are also continuing to enforce laws and advocate for competition. On April 9, The Wall Street Journal reported the Department of Justice’s approval of Bayer AG’s acquisition of Monsanto, but only after the companies agreed to substantial asset divestitures to allay antitrust concerns. The deal, valued at more than $60 million, would make Bayer the world’s largest supplier of pesticides and seeds for farmers.
Relatedly, a recent Federal Trade Commission blog post contains useful tips on avoiding antitrust pitfalls during pre-merger negotiations and due diligence. In addition to considering whether a proposed transaction may violate Section 7 of the Clayton Act, “counsel and clients must also be conscious of the risks of sharing information with a competitor before and during merger negotiations … Although less frequent than merger enforcement actions, the antitrust agencies have taken action against companies for unreasonable information sharing.”