Mergers and acquisitions

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

• Halliburton/Baker Hughes. Prepared as a testifying expert on behalf of DOJ in support of its successful challenge of the proposed $34.6 billion merger of Halliburton and Baker Hughes. For more information, read the press release.
• General Electric/Electrolux. Provided expert analysis and testimony on behalf of DOJ in support of the Antitrust Division’s successful challenge of Electrolux’s proposed acquisition of General Electric’s major appliance business. For more information, read the press release.
• Cabell Huntington Hospital/St. Mary’s Medical Center. Provided expert analysis on behalf of the FTC in its proceedings seeking to block Cabell Huntington Hospital’s acquisition of St. Mary’s Medical Center in Huntington, WV. Analysis showed that the proposed acquisition would substantially lessen competition in general acute care inpatient hospital services and outpatient surgical services in the four-county area around Huntington and would likely result in higher costs and lower quality for patients. Also explained why certain proposed behavioral remedies would not offset the harms from lessened competition.
• FerroAtlantico/Globe Specialty Metals. Provided analysis and expert support for the Department of Justice in analyzing the proposed merger of silicon metal producers FerroAtlantico and Globe Specialty Metals. Silicon metal is a key input for production of aluminum, semiconductors, and solar panels. Analyzed the competitive effects of the proposed transaction, and supported preparation of expert testimony in the event of a merger challenge. After an extended investigation, the Department did not challenge the merger, which was subsequently consummated.

• Holcim Ltd./Lafarge SA. On behalf of construction material manufacturers Holcim Ltd. and Lafarge SA, provided economic analysis of possible competitive concerns in North America and advised the merging parties, while our European partner, E.CA Economics, provided similar analysis and advice related to possible concerns in Europe. Analyzed the likely competitive effects of the proposed $25 billion merger in markets for cement, ready-mix concrete and construction aggregates in North America. The merger will create the world’s largest cement manufacturer, with operations in 90 countries. In addition to likely competitive effects of the merger, analyzed various divestiture scenarios, and provided ongoing support to attorneys for the parties throughout the regulatory approval process. Analysis was presented in two written submissions to the FTC and two written submissions to the Canadian Bureau of Competition (CBC). After almost one year of review, the FTC and CBC approved the merger, pending certain asset divestitures. For more information, read the press release.

• Dr. Oetker/McCain Foods. Worked on behalf of Dr. Oetker to analyze the competitive effects of its proposed acquisition of McCain Foods’ North American frozen pizza business. Submitted analysis to the Competition Bureau of Canada investigating the likelihood of unilateral effects. The Bureau cleared the acquisition without the issuance of a supplemental information request. For more information, read the press release.

• Eli Lilly/Novartis Animal Health. Conducted detailed economic analysis on behalf of Eli Lilly in connection with its $5.4 billion acquisition of Novartis Animal Health. Both firms were active in developing and marketing animal health products, including medications used to treat pets and livestock. Bates White assessed overlaps in several areas, and presented results of its analysis to the FTC. The FTC approved the merger after an eight month investigation, with divestiture required in one product area, canine parasiticides.
• 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.
• 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.
• 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.

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.