Unscrambling eggs

Two recent cases provide examples of the Obama administration's aggressive antitrust policy.  Unlike the previous administration, almost from day one the Obama administration has been more likely to pursue transactions post-closing for antitrust violations.  In the first of the two, the FTC won a victory in a Federal Court in the district of Idaho:

Idaho's largest hospital chain and physician group must unwind their merger, a federal judge ruled, siding with U.S. regulators seeking to broaden antitrust enforcement in health-care acquisitions.

The combination of St. Luke’s Health System Ltd. and the Saltzer Medical Group would raise prices for consumers even though it would improve patient care, U.S. District Judge B. Lynn Winmill in Boise, Idaho said today, ruling in a pair of cases brought by the Federal Trade Commission and local hospitals.

In the second case, the DOJ was able to work out a settlement with Heraeus Electro-Nite LLC that will require it to divest itself of certain assets it acquired from Midwest Instrument Company.   Both companies  manufactured measurement technologies critical in steel manufacturing.

In both cases the transactions giving rise to the government's antitrust investigations were below the HSR filing thresholds, so pre-closing merger clearance was not required.  But, as we are learning, just because your deal may not trigger filing requirements, it doesn't mean that the government won't seek divestiture remedies, including "unscrambling the eggs" in the event the government believes the transaction is anticompetitive. 

-bjmq