The regulatory environment for vertical mergers has changed significantly in recent months — and with the antitrust agencies promising a rewrite of the merger guidelines, it looks like more changes may be on the way.
A Gibson Dunn memo addresses some of the trends in vertical merger review and enforcement that emerged from regulators’ recent actions. This excerpt makes it clear the enhanced scrutiny of vertical deals isn’t just a U.S. phenomenon:
Vertical transactions are receiving heightened scrutiny from regulatory agencies around the world, including, most notably, the U.S. antitrust agencies, EC and European Union member states, and SAMR. Further, antitrust agencies across the globe are increasing cooperation. For example, in the NVIDIA-Arm transaction, the EC indicated it is “cooperating with competition authorities around the world.”
It appears that this increased cooperation may lengthen the merger review period. Coordination among agencies was the suspected reason behind the unprecedented eight-month SAMR pre-filing investigation. And in the Illumina-Grail transaction, the EC has exercised the ability to take referrals from member states without those member states independently having jurisdiction to review the transaction under their own merger control regimes.
The memo also points out that in the United States and other countries, intragovernmental cooperation is an important part of antitrust review and enforcement. One example cited by the memo is the Defense Department’s role in reviewing Lockheed Martin’s proposed vertical acquisition of Aerojet Rocketdyne.
— John Jenkins, DealLawyers.com, March 24, 2022
