Earlier this month, the DOJ announced that – for the first time – it had agreed to take a challenge to a proposed merger to binding arbitration. Here’s the intro from a Gibson Dunn memo discussing the DOJ’s action:
On September 4, 2019, the U.S. Department of Justice’s Antitrust Division filed a complaint in the Northern District of Ohio challenging Novelis Inc.’s proposed $2.6 billion acquisition of Aleris Corporation. In a first, the Antitrust Division has agreed to resolve the matter through binding arbitration under the Administrative Dispute Resolution Act of 1996, 5 U.S.C. § 571 et seq. Assistant Attorney General Makan Delrahim remarked that “[t]his new process could prove to be a model for future enforcement actions, where appropriate, to bring greater certainty for merging parties and to preserve taxpayer resources while staying true to the [Antitrust Division’s] enforcement mission.”
It remains to be seen whether this case portends a larger shift in the Antitrust Division’s approach to resolving merger investigations and negotiating remedies, or whether arbitration will be limited to the specific circumstances surrounding Novelis’ acquisition of Aleris. To the extent arbitration becomes a meaningful option for merging parties in future cases, however, the ramifications are significant.
The memo points out that the potential benefits for arbitration include greater certainty concerning the timing of a resolution and increased confidentiality for third-party customers and competitors who would otherwise be required to testify in open court during the proceeding.
-John Jenkins, DealLawyers.com September 17, 2019
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