The Duration and Number of Significant U.S. Merger Investigations Concluded in 2021 Were in Line with Trump Administration Averages, But Resulted in Fewer Settlements
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The U.S. antitrust agencies received 4,130 HSR filings in 2021, more than double the 1,965 recorded in 2020. Despite this flood of filings and an array of prominent policy changes from the Biden administration, the overall duration and number of significant U.S. merger investigations concluded in 2021 were consistent with the duration and number of significant investigations concluded under the Trump administration.
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The 27 significant U.S. merger investigations concluded in 2021, for example, falls just below the average observed over the four years of the Trump administration. Of note, 11 of those 27 investigations concluded in Q4 2021, representing a dramatic uptick in what was otherwise a relatively quiet year for merger activity. This increase in Q4 2021 corresponds with initial reports of an elevated wave of HSR filings in Q4 2020, and it provides reason to expect an even greater increase in the number of concluded investigations in 2022.
Similarly, the 11.4-month average duration of significant U.S. merger investigations concluded in 2021 was just slightly above the average observed over the four years of the Trump administration and even identical to the average duration observed the last year of the Trump administration in 2020.
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The average duration of significant investigations concluding in Q4 2021 dipped slightly lower to 10.8, but there remained wide differences between individual investigations. More than half of investigations in Q4 2021 had a duration as long or longer than the 11.4-month average recorded for all of 2021.
Of note, the combined number of transactions that ended in either a complaint or an abandoned transaction in 2021 matched 2020. With fewer significant investigations concluding in 2021 than 2020, however, the 10 investigations that ended in a complaint or an abandoned transaction in 2021 represented 37 percent of all significant investigations – the highest proportion observed since DAMITT first launched in 2011. As shown below, deals abandoned without a complaint represented 40 percent of these transactions that did not result in a consent decree, the highest proportion since 2014.
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These outcomes indicate that the vocal FTC and DOJ skepticism of merger remedies—which did not begin under the current administration—is in fact reducing the number of deals that end in consent decrees, highlighting the continued importance of negotiated antitrust provisions in merger agreements for transactions that proceed to significant merger investigations.
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In particular, these outcomes have important implications for deal timing. The average investigation that resulted in a complaint lasted 12.7 months, slightly longer than all significant merger investigations concluding in 2021. Based on DAMITT data, parties receiving a complaint still need to plan for an additional seven to nine months from the date of the complaint to preserve their ability to litigate a transaction to a successful outcome. Parties that do not plan for that time up front may face significant timing pressure, especially given the recent FTC and DOJ announcement that they are revising the merger guidelines to strengthen enforcement against illegal mergers.