Consummated Mergers: It Ain’t Over 'Til the Fat Lady Sings

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Merging companies whose deals fall below the Hart-Scott-Rodino (HSR) merger filing threshold may think that once they have completed their merger and integration is finished, there is no longer any threat that the federal antitrust law enforcers, the FTC or DOJ, will challenge their deal. Consequently, these companies make substantial investments of time, money and other valuable resources in the merged entity that are at risk. Why? Because even consummated mergers can be challenged by the U.S. antitrust law enforcers.

This risk was underscored by a recent decision from the Eleventh Circuit Court of Appeals. In July, the Eleventh Circuit affirmed the Federal Trade Commission’s decision in Polypore, finding that the consummated merger of two battery separator manufacturers would substantially lessen competition in violation of Section 7 of the Clayton Act, and ordering extensive divestitures. In addition to demonstrating the risks that companies take when they consummate deals that have substantive antitrust problems, this decision illustrates the broad discretion the agencies enjoy in formulating remedies.

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