Strict(er) Scrutiny: The Impact of Failed Divestitures on U.S. Merger Remedies

Abstract

Antitrust review of mergers and merger remedies, in particular, have been the topic of much recent conversation both in the legal world and popular political discourse. A recent string of failed divestitures has driven the U.S. antitrust agencies to analyze proposed remedies and proposed divestiture buyers with increasing scrutiny as they seek to avoid similar outcomes. This article details the history of recent divestiture failures and explores how the agencies have adapted their remedy vetting process in response through longer investigations, enhanced focus on particular aspects of buyers’ qualifications, and an increased insistence on up-front buyers, as well as the agencies’ success in persuading courts that proposed divestitures and/or buyers were inadequate in a series of recent litigated merger challenges. Against this backdrop, this article offers practical guidance for merger parties and would-be buyers to navigate the approval process amid the agencies’ heightened sensitivities to the qualifications of divestiture buyers. Finally, it suggests that there is little empirical support for the notion that the most concrete, observable agency responses will reduce the risk of divestiture failures in the future.