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![]() ![]() ![]() Read more: Economic Reality and Antitrust Theory Paralyze M&A The European Commission is due to rule on the transaction later this month. The FTC had already sued to block the deal, and hearings are scheduled to start in August in a bellwether case for Khan’s agency. ![]() Last month, the UK’s Competition and Markets Authority vetoed Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc., further cementing its position alongside the US and EU at the center of global antitrust decisions. In some prominent cases, the international reach of large companies is pulling in regulators from all over the world and bolstering the US agenda. “We have much more to do to reverse the decades of concentrated corporate power,” Biden said at an event on May 4. Both have argued publicly that previous administrations were too permissive, leading to a rise in corporate concentration that’s limited choices for consumers and contributed to a spike in prices. A sweeping executive order signed by Biden in 2021 encouraged government agencies to “enforce the antitrust laws to combat the excessive concentration of industry,” an approach that’s become a key tenet of his administration’s economic policy.īiden appointed prominent antitrust hawks to follow through on the pledge: Jonathan Kanter helms the Justice Department’s antitrust division while Lina Khan oversees the FTC. Much of the slump in activity can be explained by a poor macroeconomic environment for dealmaking: CEO confidence is low in the face of a potential recession, interest rates are high and financing is tough to come by.īut after decades where the US favored a light-touch approach for almost all but the biggest deals, President Joe Biden’s administration has altered that strategy, souring the environment. The vast majority of transactions don’t rise to the level of significant regulatory oversight, and many executives are willing to weather the increased scrutiny if they really want a deal. Though deal volumes have slipped significantly this year, plenty of M&A is still getting done. Several years ago, the person said, he would’ve expected the same proposal to pique the CEO’s interest and lead to a discussion about how to get it done. A representative for Alphabet didn’t immediately respond to a request for comment.Ī different person, who pitched the head of a $50 billion company on a $20 billion takeover, said the executive immediately cut him off because he thought the deal would never fly. Last year, for example, Alphabet Inc.’s Google put aside internal discussions about potentially acquiring another large technology company because of concerns it would attract too much antitrust scrutiny, according to a person familiar with the matter, who declined to identify the potential target. While antitrust laws haven’t changed, the stepped-up enforcement means dealmaking has gotten costlier, as well as more uncertain and time-consuming, they said. Many of them described an environment that’s generally hostile to dealmaking, even for transactions that they wouldn’t have expected to raise antitrust concerns. The approach has discouraged some companies from pursuing unions they would’ve leapt at in the past, according to dozens of conversations with M&A advisers, corporate executives, former regulators and antitrust practitioners. ![]() Though deals involving US companies have steadily increased, the recent pace of interventions by the Justice Department or the Federal Trade Commission has stunted that growth: The agencies are also claiming credit for another 26 mergers that they say were abandoned in the face of antitrust investigations, some of which were pulled before they were even made public. ![]()
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