SPOTLIGHT

Mergers and acquisitions

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Bates White is at the forefront of applying economic theory and empirical methodologies to address issues that arise in the antitrust analysis of mergers and acquisitions. We work with clients through all phases of merger analysis, including assessment of the antitrust risks of a transaction prior to filing, development and support of presentations to enforcement agencies, assistance with responses to second requests, and provision of expert testimony in litigation. Our work emphasizes the application of quantitative methods to assess competitive effects, define relevant product and geographic markets, analyze the effects of likely entry, and evaluate efficiencies.

Selected experience

  • McKesson Corporation/PSS World Medical. Provided detailed analysis on behalf of McKesson Corporation in connection with its $2.1 billion acquisition of PSS World Medical Inc. The analysis, which was presented to the FTC, showed that the proposed merger of the two medical and surgical supplies distributors was unlikely to lead to any anticompetitive effects. After McKesson pulled and re-filed its HSR filing, the FTC granted early termination of the waiting period and approved the merger without issuing a second request for additional information to the parties. For more information, read the press release.
  • Anheuser-Busch InBev and Grupo Modelo. On behalf of Constellation Brands, analyzed the competitive effects of Anheuser-Busch InBev and Grupo Modelo’s proposed divestiture of brewery and distribution assets to Constellation in response to DOJ’s concerns about their proposed merger. Coauthored a white paper positing that the proposed divestiture resolved the concerns initially raised and would likely improve competition relative to the status quo. DOJ ultimately approved the merger, subject to the proposed divestiture package.
  • Express Scripts/Medco Health Solutions. Conducted extensive economic analysis on behalf of Express Scripts in connection with its $29 billion acquisition of Medco Health Solutions, two companies in the pharmacy benefit management industry. The analysis, which was presented to the FTC as well as state enforcement agencies, showed that adverse competitive effects were unlikely in any relevant market. Bid data were used to investigate the current structure of competition and to calibrate merger simulation models, which demonstrated there would be no unilateral incentive to increase price after accounting for anticipated efficiencies. The analysis also addressed possible coordinated effects and monopsony concerns. The FTC unconditionally approved the merger after an eight-month investigation and found no likelihood of unilateral effects, coordinated effects, or exercise of monopsony power. For more information, read the case study.
  • OSF Healthcare System/Rockford Health System. Retained by the FTC to conduct an economic analysis of the likely effects of the proposed merger of OSF St. Anthony Medical Center and Rockford Memorial Hospital on competition and consumer welfare. Provided written, deposition, and oral testimony in federal district court after the FTC filed a motion for a preliminary injunction. The parties abandoned the merger after US District Judge Frederick Kapala found that the FTC had demonstrated a likelihood of success on the merits and granted the request for a preliminary injunction. For more information, read the press release.
  • Pioneer Hi-Bred/Pannar Seed. Testified before the South African Competition Tribunal on possible unilateral and coordinated effects arising from the proposed Pioneer Hi-Bred/Pannar Seed merger, along with the effects of efficiencies on post-merger pricing. In a decision upheld by the South African Supreme Court of Appeal, the Competition Appeal Court agreed that the transaction would strengthen competition by promoting greater innovation in the development of new corn seed products. In support for its decision, the court relied on Bates White’s expert′s coordinated effects analysis, merger simulation, and calculation balancing price effects and dynamic efficiencies. For more information, read the press release.
  • Grifols/Talecris. Provided analysis on behalf of Grifols in connection with its acquisition of Talecris—two companies involved in the manufacture and sale of biologic therapies derived from human plasma. Evaluated possible concerns of coordinated effects related to the merger and assessed the merger-specificity of claimed efficiencies in an analysis presented to the FTC, which approved the acquisition subject to a consent decree that facilitated entry. For more information, read the case study.
  • Delta/Northwest. Appeared before DOJ on behalf of Delta Air Lines in connection with its proposed merger with Northwest Airlines. Evaluated competitive effects, consumer benefits from improved service quality, and cost savings. Presented an empirical study to DOJ that analyzed the competitive effects of airline mergers. Results supported DOJ’s conclusion that adverse effects from the merger were unlikely.
  • Bell Canada and Rogers Communications/Maple Leaf Sports & Entertainment. On behalf of the Competition Bureau of Canada in its evaluation of the proposed acquisition, provided economic analysis which analyzed the impact on competition among Canadian sports networks, as well as other markets in which the parties compete.
  • Maple Group Acquisition Corporation/TMX Group. Provided economic analysis and expert support for the Competition Bureau of Canada’s evaluation of a proposed merger of equities exchanges and related entities, including the Toronto Stock Exchange.
  • Comcast/NBCU. On behalf of a video programming distributor, conducted economic analysis related to vertical foreclosure issues and other possible effects arising from the merger of Comcast and NBC Universal. Assisted client in meetings with DOJ.

Horizontal Merger Guidelines

Bates White has produced eReader versions of the August 2010 Horizontal Merger Guidelines issued by the DOJ and the FTC. To download the file to your Kindle, iPad, Nook, Sony Reader or other eReader, click here.

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