Thursday, October 8, 2009
Posted by D. Daniel Sokol
Jamie Henikoff Moffitt, University of Oregon School of Law addresses Efficient Mergers: Preventing Collateral Casualties in Federal Antitrust Enforcement Actions.
ABSTRACT: This article exposes a gap between how courts state they are analyzing efficiency claims in Section 7 Clayton Act enforcement actions and what they are actually doing. During periods of lax antitrust enforcement, this pattern is not readily visible, since almost all proposed merger and acquisition (“M&A”) deals are approved. With a shift to more aggressive antitrust policy, however, it is critical that merger review include appropriate weighting of transaction-generated efficiencies. Although only a small number of Section 7 cases are litigated each year, corporate negotiators assess thousands of potential M&A deals annually. This article applies analytical frameworks from the negotiation literature to demonstrate how current judicial efficiency analysis discourages corporate negotiators from pursuing efficient deals, thereby hurting the competitiveness of U.S. companies and markets.