Attorneys at the law firm of Gallop, Johnson & Neuman, L.C. are advising companies considering mergers, tender offers, acquisition transactions and joint ventures of any size to carefully examine any potential antitrust risks prior to closing the business deal.  

That is because the Department of Justice (DOJ) and the Federal Trade Commission (FTC) are increasing scrutiny of transactions that could potentially lessen competition or create a monopoly, even when those transactions do not warrant mandatory review under the Hart-Scott-Rodino Act’s (Hart-Scott) jurisdictional and filing-fee thresholds for transactions triggering mandatory antitrust review.  

Glenn E. Davis, chair of the Antitrust Practice Group at Gallop, Johnson & Neuman, said, “Identifying potential antitrust issues prior to closing a deal could save companies considerable effort and expense in litigating against a federal antitrust agency over a relatively modest transaction, or permit proactive planning to structure deals to avoid or minimize risk.”

On January 19, 2010, the FTC announced that for the first time it was lowering the Hart-Scott jurisdictional and filing-fee thresholds for transactions that prompt mandatory antitrust review. The 2010 revisions decreased the basic notification threshold for all transactions from $65.2 million to $63.4 million.

Amy K. Mistler, attorney in the Antitrust Practice Group at Gallop, Johnson & Neuman, said, “While Hart-Scott only requires federal notification for transactions exceeding $63.4 million, this year the U.S. Department of Justice and Federal Trade Commission have significantly increased antitrust review of transactions falling below the Hart-Scott threshold as well.”  

“The FTC and DOJ are keeping an especially close watch on mergers and acquisitions that result in one company gaining a substantial share of its relevant market,” Davis noted. For example, in January of 2010 the DOJ filed suit against Dean Foods Co., the country’s largest processor and distributor of dairy products, for antitrust violations in its $35 million acquisition of two Wisconsin dairy-processing plants from a local dairy cooperative.  The DOJ alleged that the deal was likely to substantially lessen competition in milk sales to schools and convenience stores in Wisconsin, Illinois and Michigan.

In March of 2010, the DOJ challenged a $5 million merger between the country’s two largest providers of voting machine equipment because the deal gave one company control over more than 70 percent of the voting-machine market. After filing suit to challenge the merger, the DOJ reached a settlement agreement with Election Systems & Software, Inc.  

In May 2010, the FTC filed suit against Dun & Bradstreet Corp. because the database company’s $29 million acquisition of competitor Quality Education Data (QED) gave it more than 90 percent of the market for K-12 education data.  When the suit was filed, Richard Feinstein, Director of the FTC’s Bureau of Competition, announced: “Despite its relatively low dollar value, this transaction dramatically decreased competition in the marketplace…When Dun & Bradstreet acquired QED, it bought its closest competitor and created a monopoly. That’s going to get the FTC’s attention every time.”

For more information, contact Glenn E. Davis or Amy K. Mistler at 314.615.6000 with questions or concerns regarding federal antitrust policy or review. A complete list of the 2010 adjusted thresholds can be accessed via the FTC website at http://www.ftc.gov/os/fedreg/2010/january/1001218claytonact7a.pdf. 

Gallop, Johnson & Neuman, L.C., a full service law firm of 80 attorneys, has provided legal services to clients in diverse industries since 1976 and is one of the largest law firms in St. Louis. The firm serves public corporations; privately-held companies; entrepreneurs and start-up enterprises; individuals and families; trustees and trust beneficiaries; charities; and non-profit entities. 

For more information about Gallop, Johnson & Neuman, contact Lois A. LaDriere, Director of Marketing, at 314.615.6000 or see the website http://www.gjn.com.