Mergers and Acquisitions: Understanding the Antitrust Issues

Front Cover
American Bar Association, 2004 - 869 pages
Since the publication of the first edition of Mergers and Acquisitions, the federal agencies and state attorneys general have continued an active merger agenda and have refined merger analyses through settlements, liquidated cases, and speeches. This second edition has been completely updated to capture the most important developments in this area. A comprehensive review of U.S. substantive merger law, Mergers and Acquisitions, Second Edition gives you indispensable guidance you can put into practice today. No other book gathers all of the resources, case law, and agency rulings you need in a single place. It is a fundamental reference to: the relevant case law; antitrust guidelines; policies and speeches, and; consent decrees on the subject. This valuable source guides you through the substantive analysis applied to transactions, including market definition and measurement; possible coordinated and unilateral effects arising from a transaction; potential mitigating factors, efficiencies, and defenses; joint ventures and vertical and conglomerate mergers; international transactions; and judicial relief and remedies. serve you again and again as you counsel your clients, help them understand the issues involved, and work more effectively to achieve your goals in the evaluation process and beyond.
 

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Contents

OVERVIEW OF THE APPLICABLE US ANTITRUST LAWS
1
A Section 7 of the Clayton Act
2
2 Section 7 Applies to Acquisitions of Less Than 100 Percent of Voting Securities
6
3 Section 7 Applies to NotforProfit Corporations
7
B Sections 1 and 2 of the Sherman Act
8
C Section 5 of the Federal Trade Commission Act
9
D State Antitrust Laws
10
US ENFORCEMENT POLICY AND PROCEDURE
13
4 Joint Selling Arrangements
271
5 Joint Buying Arrangements
278
6 Network Joint Ventures
281
E Operation of a Joint Venture
286
1 Applicability of Section 1
287
2 General Principles Governing Collateral Restraints
293
3 Restraints on Competition among the Joint Venture and Its Parents
301
4 Restraints on Prices and Output
305

B The History and Use of the Federal Merger Guidelines
16
2 The Evolution of the Merger Guidelines
18
c The 1984 Revisions
20
e The 1997 Efficiencies Revision of the 1992 Merger Guidelines
21
3 The Nonbinding Nature of the Merger Guidelines
22
C Review of Reportable Transactions under the HartScottRodino Antitrust Improvements Act of 1976
26
D Review of Transactions by State Attorneys General
32
2 Premerger Notification
33
MARKET DEFINITION AND MEASUREMENT
35
1 The Product Market
40
Price Movements Between Products
41
2 Reasonable Interchangeability
45
b The Merger Guidelines Hypothetical Monopolist Approach
53
The Continuum Problem
57
d The Cluster Markets Debate
60
e The Submarket Debate
64
f Innovation Markets
70
g Production Substitutability as a Means of Defining a Market
74
2 The Geographic Market
77
a The Pragmatic Factual Approach
80
b Analytical Approaches
93
2 The ElzingaHogarty Test
96
B Measuring Market Shares within a Defined Market
97
1 Identifying Market Participants
100
2 Calculating Market Concentration
102
HORIZONTAL MERGERS PROVING LIKELY ANTICOMPETITIVE EFFECTS
107
A Market Share as a Measure of Anticompetitive Effects
108
2 The 1992 Merger Guidelines and Lower Court Precedent
111
B Coordinated Anticompetitive Effects
116
C Unilateral Anticompetitive Effects
126
REBUTTING THE STRUCTURAL INFERENCE
141
B Proving Ease of Entry
147
a Financial
148
b Technical
150
c Government Regulation
151
d Brand Loyalty and Reputational Effects
152
e Network Externalities
153
2 Pre1992 Cases and Merger Guidelines
154
3 1992 Merger Guidelines and Subsequent Cases
156
The Power BuyerSophisticated Purchaser Debate
160
D Proving the Difficulty of Collusion
163
2 Recent Developments before the Agencies
166
E Creating a Stronger Competitor
168
F The Significance of Declining Industries
171
EFFICIENCIES
175
B Efficiencies and the Goals of Antitrust Laws
177
C US Supreme Court Treatment of Efficiencies
178
D Guidelines Treatment of Efficiencies
181
2 Federal Health Care Statements
183
3 State Enforcement Guidelines
184
1 Judicial Approach
185
2 Agency Approach
189
F Proving Efficiencies
191
b Agency Approach
195
2 MergerSpecific Requirement
197
b Agency Approach
198
3 Standard of Proof
199
b Agency Approach
200
POSSIBLE DEFENSES
203
Elements of the Defense
205
a Imminent Business Failure
206
b No Other Available Purchasers
207
c Dim Prospects of Reorganization
208
2 Federal Agency Interpretation of the Failing Company Doctrine
209
3 The Failing Division or Subsidiary
212
4 Weakened Firm and General Dynamics Defenses
213
B State Action Doctrine
217
C Antitrust Exemptions through Regulation
221
2 Energy
222
b Electric Power
223
3 Transportation
224
b Air Transportation
225
4 Communications
228
D Specific Industries
232
2 Defense
233
3 Newspapers
235
JOINT VENTURES
239
A Antitrust Statutes Applicable to Joint Ventures
241
B Antitrust Agency Guidelines Applicable to Joint Ventures
242
C Per Se or Rule of Reason Treatment
248
D Types of Joint Ventures
254
2 Research and Development Joint Ventures
259
3 Production Joint Ventures
267
5 Territorial and Customer Restraints
310
6 Restraints on Access to the Joint Venture
313
POTENTIAL COMPETITION DOCTRINE
321
A Origins of the Potential Competition Doctrine
324
B General Requirements of the Potential Competition Doctrine
327
1 A Concentrated Oligopolistic Target Market
330
2 The Acquiring Firm as One of Only a Few Potential Entrants
332
C The Essential Preconditions of the Actual Potential Competition Theory
334
2 The Likelihood of Deconcentration or Other Procompetitive Effects
339
D The Necessary Elements of the Perceived Potential Competition Theory
340
E The Treatment of Potential Competition Mergers under the Merger Guidelines
343
VERTICAL MERGERS
347
A Historical Perceptions of Vertical Mergers
348
1 Early Cases
349
2 The 1950 Amendments to the Clayton Act
350
B Brown Shoe and Vertical Foreclosure
351
C Chicago School Criticism of Brown Shoe
353
D Effect of Criticism on Vertical Merger Enforcement Policy
356
2 Changes in Enforcement Policy and Agency Case Selection
357
E PostChicago Treatment of Foreclosure
360
F Examples of Recent Vertical Merger Enforcement Activity
361
1 Raising Rivals Costs and TwoLevel Entry
362
2 Facilitating Coordinated Interaction
364
3 Media Mergers
366
CONGLOMERATE MERGERS
371
A Evaluative Criteria for Judging Conglomerate Mergers
374
B Competitive Concerns
376
2 Reciprocity
380
3 Tying
383
4 Multiple Market Strategies
384
APPLICATION OF MERGER LAWS TO MULTINATIONAL TRANSACTIONS
389
1 Sherman Act
390
a Import Trade
392
b Nonimport Trade
393
2 Clayton Act
394
3 FTC Act
397
C Justice Department and FTC Enforcement Policy
402
2 What Kind of Remedy Will Be Sought
407
D International Cooperation Agreements
409
1 The 1991 USEU Cooperation Agreement
411
2 The 1995 USCanada Cooperation Agreement
414
3 The 1994 International Antitrust Enforcement Assistance Act
415
E Investigations of Transnational Mergers
416
F Special Defenses
421
2 Act of State
424
3 WebbPomerene Act
426
JUDICIAL RELIEF AND REMEDIES
428
A Preliminary Relief
430
a Statutory Authority
431
b Private Party Standing
434
1 Competitor Standing
436
2 Target Standing
441
3 Consumer Standing
443
c The Requirements for Preliminary Injunctive Relief
445
b ALTERNATIVE FORMULATIONS
446
2 Factors
449
b LIKELIHOOD OF SUCCESS
454
c BALANCE OF THE EQUITIES
463
d PUBLIC INTEREST
468
3 Standard of Review
469
2 Hold Separate Orders
471
B Permanent Relief
475
3 Rescission
481
4 Damages
482
5 Disgorgement
483
SHERMAN ACT
485
CLAYTON ACT
487
FEDERAL TRADE COMMISSION ACT
497
NATIONAL COOPERATIVE RESEARCH AND PRODUCTION ACT OF 1993
505
NEWSPAPER PRESERVATION ACT
513
EXPORT TRADING COMPANY ACT
517
WEBBPOMERENE ACT
525
1984 DEPARTMENT OF JUSTICE MERGER GUIDELINES
529
1992 DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION HORIZONTAL MERGER GUIDELINES
541
1995 DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION ANTITRUST ENFORCEMENT GUIDELINES FOR INTERNATIONA...
579
1995 DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION ANTITRUST GUIDELINES FOR THE LICENSING OF INTELLECT...
625
1996 DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION STATEMENTS OF ANTITRUST ENFORCEMENT POLICY IN HEA...
663
1993 HORIZONTAL MERGER GUIDELINES OF THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL
755
ANTITRUST GUIDELINES FOR COLLABORATIONS AMONG COMPETITORS
787
SELECTED HARTSCOTTRODINO STATISTICS FY 1998 2002
831
TABLE OF CASES
833
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