Merger Review and Enforcement | Antitrust M&A Snapshot | Q4 2020

Antitrust M&A Snapshot


October - December 2020 Update

United States

Marisa E. Poncia

Despite initial obstacles because of the COVID-19 pandemic, 2020 rounded out to be the busiest year for mergers and acquisitions (M&A) enforcement in the United States in nearly two decades. In the fourth quarter, US agencies challenged five transactions. November 2020 saw the most premerger filings in any month since 2001. Mergers and filings in the United States are predicted to remain at high levels into the new year in light of the current economic climate. The antitrust agencies have continued to maintain that their evaluation and investigation of anticompetitive harm will remain rigorous despite the uncertain times.


Carina Kant

The European Commission (EC) and the UK Competition and Markets Authority (CMA) had a busy last quarter of 2020. The EC completed several in-depth investigations, including the Fiat Chrysler/Peugeot merger. The EC approved this transaction with behavioural remedies. With respect to policy and legislative developments, the EC published the much-anticipated draft of the Digital Markets Act, which is intended to regulate the market behaviour of large online platforms which act as “gatekeepers” in digital markets. Given the end of the transition period for the United Kingdom’s exit from the European Union, the CMA published a guidance paper explaining how it will conduct its work following Brexit.

Snapshot of Events

United States

Marisa E. Poncia
  • Record-Breaking Spike in Premerger Filings in Q4 Suggests Return to Normalcy
    US antitrust enforcers received 424 Hart-Scott-Rodino (HSR) premerger filings in November 2020, a 67% increase from November 2019 filings (254) and the most received in any month since November 2001, according to the US Federal Trade Commission (FTC). This dramatic increase followed a period of decline earlier in the year resulting from the COVID-19 pandemic. Now, after months of a nationwide economic slowdown because of the pandemic, investors have begun to revive M&A activity again.
  • FTC and DOJ Challenge and Block Many Transactions
    The FTC and US Department of Justice (DOJ) had a very active litigation docket, challenging five deals in court this quarter. The parties abandoned four of those transactions after the suits were filed.
  • FTC Issues Commentary on Vertical Merger Enforcement Following June 2020 Guidelines
    In December, the FTC Commissioners offered divided commentary along party lines regarding the Vertical Merger Guidelines introduced in June 2020. The commentary provides increased transparency regarding the FTC’s analysis of vertical mergers. Democratic Commissioners dissented from the commentary, warning the market against relying on the new guidelines while advocating for increased oversight and expressed concern regarding the effectiveness of behavioral remedies. Republican Commissioners defended the commentary as an accurate representation of how the antitrust agencies evaluate vertical mergers. With the incoming Biden administration, Democrats will make up a majority of the FTC Commissioners. Companies thus should be cautious in relying on the new commentary and guidelines until new leadership is established.
  • Notice of Proposed Rulemaking of Amendments to HSR Rules and Interpretations Implementing HSR Act
    On December 1, 2020, the FTC proposed amendments to the HSR rules and interpretations. The proposed changes reflect the most substantial re-evaluation of the HSR rules in more than 30 years. The notice proposes two changes to the existing rules: (1) entities that are under common management would be deemed to be part of the same “person,” which will require aggregation of acquisitions in the same company across those entities, creating more filings, and those HSR filings that are made will require far more extensive information; and (2) the acquisition of 10% or less of an issuer’s voting securities would be exempt unless the acquiring person has an existing competitively significant relationship with the issuer. The proposed rules are subject to public comment before the Commission decides whether to issue them in final form.


Carina Kant
  • Avoiding Excessive Concentration as a Result of the COVID-19 Pandemic
    In October, Competition Commissioner Margrethe Vestager announced that the EC expects to see increased industry consolidation as a result of the COVID-19 pandemic. Therefore, the EC expects it will challenge mergers or acquisitions resulting in excessive concentration or adversely affecting EU businesses and consumers. Vestager also reiterated the EC’s intent to strictly interpret the “failing firm” defence in cases where competitors look to acquire weakened rivals.
  • The European Commission (EC) Issues the Digital Markets Act
    In December, the EC issued the much-anticipated draft of the Digital Markets Act, which intends to regulate the behaviour of large online platforms that act as “gatekeepers” in digital markets due to their position in the sector. The proposed act would require “gatekeepers” to notify the EC of any intended concentration (within the meaning of the EU Merger Regulation) involving another provider of core platform services or any other services provided in the digital sector. This obligation applies regardless of whether the transaction is otherwise notifiable to the EC or a competent Member State national competition authority. The act will allow the EC to better monitor the development of digital (core platform) services and evaluate potential “killer acquisitions” of nascent competitors. The European Parliament and the European Council must vote on the Digital Markets Act before it is passed into law.
  • The UK CMA Publishes Brexit Guidance
    The CMA published further guidance explaining how it will analyze transactions following the end of the transition period for the United Kingdom’s exit from the European Union. Beginning January 1, 2021, the CMA will become an independent monitoring body and will be responsible for merger enforcement for cases that previously fell within the purview of the EC. The CMA will establish an Office for the Internal Market (OIM) and a new Digital Markets Unit. The OIM will provide non-binding and expert advice on the potential economic impact of proposed regulations on the UK market, as well as monitor and report on the health, functioning and evolution of the UK market. Beginning in April 2021, the Digital Markets Unit will work closely with other regulators to establish rules to govern the behaviour of large digital platforms. It will also have the power to suspend, block and reverse decisions of large platform providers, order compliance with competition rules and impose financial penalties for noncompliance.


Europe (Time from Signing to Clearance)

Antitrust M&A Snapshot - Europe (Time from Signing to Clearance) - Q3 2020

*These graphs and the summaries that follow do not represent a complete list of all matters within a jurisdiction. Certain matters involving firm clients are not included in this report.

Significant US Trials

United States
Jefferson Health / Einstein Healthcare Network FTC / Pennsylvania Attorney General FTC Administrative Complaint / US District Court for the Eastern District of Pennsylvania Inpatient general acute care (GAC) hospital services and inpatient acute rehabilitation services in Philadelphia and Montgomery Counties, Pennsylvania

Alleged combined shares of between 45% and 70% in different service lines in north Philadelphia and Montgomery County

Will the merger eliminate competitive pressure that has driven quality improvements and lowered rates, or will the merger result in price efficiencies and cost synergies?

Is the relevant geographic market confined to the northern Philadelphia and Montgomery County areas?

The FTC sued to block the merger of Jefferson Health and Albert Einstein Healthcare Network, two hospital systems in Pennsylvania, arguing that the parties compete on quality and service, which benefits consumers by resulting in increased investments in medical facilities and new technologies. The FTC also argued that the transaction would result in insurers choosing to pay more to maintain access to all hospitals in the market. Together, the parties allegedly control 60% of inpatient GAC services in north Philadelphia and 45% in Montgomery County, and 70% of inpatient acute rehabilitation services in Philadelphia. 

In early December, the district court denied the FTC’s motion for a preliminary injunction. The district court found the transaction was unlikely to reduce competition in the Philadelphia area. The district court reasoned that the FTC’s alleged markets wrongly focused more on patient preference than on health insurers’ ability to form networks without the competing hospitals.

The FTC sought an emergency injunction to prevent the transaction from closing pending the FTC’s appeal of the lower court decision. On December 22, 2020, the US Court of Appeals for the Third Circuit denied the FTC’s request without explanation. On January 6, 2021, the FTC issued an order withdrawing the matter from adjudication, paving the way for the parties to close the transaction.

Hackensack Meridian Health / Englewood Healthcare Foundation FTC  Part 3 Administrative Proceeding Inpatient general acute care (GAC) hospital services in Bergen County, New Jersey

Merging parties would control three of six area hospitals


Will the merger eliminate close competition between the parties that has resulted in lower prices and increased quality of care?

Is the relevant geographic market confined to Bergen County, New Jersey?

The FTC sued to block Hackensack Meridian Health’s (HMH) acquisition of Englewood Healthcare Foundation. HMH is a large healthcare network that operates 12 GAC hospitals in northern and central New Jersey. HMH operates two GAC hospitals in Bergen County, including its flagship hospital. Englewood operates a large hospital just 10 miles away. The FTC alleges that the geographic market is limited to Bergen County, which is the most populous county in the state and the main area of competition between the merging parties’ hospitals. According to the FTC, HMH and Englewood compete head to head on price and non-price factors. The transaction would give HMH control of half of the hospitals in Bergen County, which would allegedly make it more difficult for health insurers to exclude the merged entity from its healthcare networks and result in higher prices. 

The administrative trial is scheduled to begin on June 15, 2021.

Altria Group / JUUL Labs Inc. FTC Part 3 Administrative Proceeding Closed-system electronic cigarettes

JUUL “dominated” the relevant market with 70% market share; Altria was the second-largest player

Did Altria’s becoming JUUL’s largest shareholder immediately following Altria’s agreement to exit the market eliminate a competitive threat to JUUL? The FTC has brought Sherman Act Section 1 and Clayton Act Section 7 claims against the companies, alleging Altria agreed not to compete with JUUL in exchange for a 35% ownership interest in JUUL. The FTC alleges that JUUL was the dominant market player at the time of the agreements, and that the agreements harmed competition by eliminating the second-largest player in the market and JUUL’s biggest competitive threat, Altria. 

This FTC administrative complaint presents the rare occurrence of a partial acquisition or ownership stake challenge going to trial. The FTC proceeding has been stayed multiple times because of the COVID-19 pandemic, and the evidentiary hearing is currently set to take place April 2021.

Significant European Clearance Decisions

PPF Group NV (PPF) Central European Media Enterprises (CME) TV sports broadcasting 1 month EC PPF and CME acquire sports broadcasting rights in the Czech Republic and Slovakia and sell TV advertising space in the Czech Republic.

The EC cleared the transaction unconditionally. The EC concluded that PPF and CME generally do not compete for the acquisition of the same sports rights. In addition, the transaction would only lead to a limited increase in PPF’s existing share of the market for the wholesale supply of TV channels in Bulgaria, the Czech Republic and Slovakia and would not add significantly to CME’s position in the market for the sale of advertising space in the Czech Republic.

DIC Corporation (DIC) BASF Colors & Effects Pigments  7 months EC BASF Colors & Effects and DIC were considered market leaders in the production and sale of pigments and other colors.

The EC alleged that the proposed transaction would reduce competition in the market for the supply of perylene pigments and quinacridone pigments. These pigments are suitable for highly complex applications, such as automotive coatings, advanced plastics applications and some industrial applications. In particular, the EC found that for some perylene and quinacridone pigments, only a small number of manufacturers are considered suitable suppliers for customers requiring high-specification pigments.

To address the EC’s concerns, DIC offered to divest its pigment manufacturing facility located in South Carolina, where the large majority of DIC’s perylene and quinacridone pigments were produced.

Fiat Chrysler Automobiles N.V.  Peugeot S.A. Automotive vehicles 7.5 months EC Fiat Chrysler and Peugeot are two large global automotive companies with a strong manufacturing base in the European Economic Area (EEA).

The EC found that the transaction would harm competition in the market for small light commercial vehicles in nine EEA Member States (Belgium, the Czech Republic, France, Greece, Italy, Lithuania, Poland, Portugal and Slovakia), where the companies have high or very high combined market shares and are particularly close competitors. The acquisition would therefore have likely led to higher prices for customers.

To address the EC’s concerns, the companies committed to extend the cooperation agreement between Peugeot and Toyota for small light commercial vehicles under which Peugeot produces the vehicles for sale by Toyota under the Toyota brand mainly in the European Union, and to amend the “repair and maintenance” agreements for passenger cars and light commercial vehicles in force between Peugeot, Fiat Chrysler and their repairer networks, to facilitate access for competitors to Peugeot and Fiat Chrysler ‘s repair and maintenance networks for light commercial vehicles.

Carlsberg A/S (joint venture (JV) partner) Marston’s PLC (joint venture partner) Brewing 2.5 months CMA (after referral from the EC) The transaction involved the creation of a new JV in which Carlsberg and Marston’s will have 60% and 40% share, respectively. The JV will be formed by the amalgamation of each party’s UK brewing, wholesaling and distribution businesses and some ancillary services.

The activities of the JV partners overlap in the brewing of a range of beer and cider brands, the wholesale of beverages to on-trade customers and in the supply of contract brewing services. They are also the exclusive importers of certain international third-party brands in the United Kingdom. The CMA found that the combined share of the JV partners is relatively low or modest and that there are a number of brewers who would continue to act as a strong competitive constraint on the JV. For these reasons, the CMA cleared the transaction unconditionally.

Evolution Gaming Group AB NetEnt AB Online casino games 5 months CMA The primary overlap between the parties in the United Kingdom is the supply of online “‘live” casino games to gambling operations on a business-to-business basis. Even though the CMA found that the merged entity will have a relatively high share of supply, the increment arising from the merger would be very small. This is because NetEnt has only a limited presence in the market. Moreover, the merged entity would face strong competitive constraints from other suppliers post-merger. N/A
XPO Logistics, Inc. (XPO) Kuehne + Nagel Drinkflow Logistics Holdings Limited Contract logistics services 8.5 months CMA XPO and Kuehne + Nagel Limited (KNL) overlap in the supply of contract logistics services in the United Kingdom, in particular in the supply of contract logistics in the food, drink and retail segments. The primary overlap between XPO and the target business is regarding secondary drinks distribution, which involves the “last mile” distribution of drinks to retail outlets of on-trade customers.

According to the CMA’s assessment, the merged entity would be the second largest secondary drinks distributor in the United Kingdom. However, the CMA found that the parties are not particularly close competitors and the merged entity would continue to be constrained by a number of other secondary drinks distributors in the United Kingdom. Accordingly, the CMA concluded that the proposed transaction would not significantly lessen competition in the United Kingdom.


* The information in this column summarizes the government’s allegations. McDermott Will & Emery LLP offers no independent view on these allegations.

Significant Challenged or Abandoned Transactions

United States
Visa Inc. Plaid Inc. Online payment and debt services DOJ DOJ challenged Visa’s proposed acquisition of Plaid. The DOJ alleged that fintech firm Plaid is developing a disruptive, competitive online payment platform that could challenge what DOJ claimed to be Visa’s 70% monopoly share in online debt services. 

Agency suits to block acquisitions of nascent competitors can be challenging. In this case, the DOJ pointed to Visa business documents that, according to DOJ, showed intent to remove a disruptive competitor from the market. DOJ alleged that the documentary record included a statement that the acquisition of Plaid was an “insurance policy” to protect Visa from a “threat to our important US debit business” and prevent it from being “forced to accept lower margins or not have a competitive offering.”

Methodist Le Bonheur Healthcare Saint Francis-Memphis and Saint Francis-Bartlett hospitals (of Tenet Healthcare Corporation) Inpatient general acute care in the Memphis region FTC The FTC alleged the transaction would have reduced the number competitors from four to three in the Memphis, Tennessee area, thus limiting options for consumers in the region. The parties abandoned the transaction in January 2021.
Procter & Gamble Company (P&G) Billie, Inc. Women’s wet shave razors FTC The FTC sued to block P&G’s acquisition of Billie, alleging it would allow the leading supplier in the women’s and men’s wet shave razors markets to purchase an innovative, new and expanding women’s razor brand, eliminating competition in the market and, thereby, harming consumers. The FTC further alleged that P&G holds a dominant market position for the sale of wet shave razors. As a result of head-to-head competition from Billie, P&G allegedly offered new services and product designs and lowered prices. The parties abandoned the transaction in January 2021. 
CoStar Group, Inc.  RentPath Holdings, Inc. Internet listing services (ILS) of available apartments for prospective renters  FTC The FTC alleged CoStar and RentPath compete head to head and have been each other’s closest rivals in the ILS market for years, implementing sales and discounts to acquire and maintain advertising customers. The FTC further alleged that the market for internet listing services that advertise for large apartment complexes in 49 US metropolitan areas were already highly concentrated. For example, the FTC alleged that approximately 70% of US apartment complexes with 200+ units and 50% of US apartment complexes with 100–199 units already advertise on ILS owned and operated by CoStar, RentPath or both. The parties abandoned the transaction in January 2021. 
FNZ (UK) Ltd GBST Holdings Limited Retail investment platforms  CMA In December, FNZ challenged the CMA’s prohibition of its acquisition of GBST before the Competition Appeal Tribunal (CAT). FNZ alleges that the CMA erred in law by reaching an unreasonable determination regarding the state of competition that would exist if the merger did not occur and in its market definition. FNZ is asking the CAT to overturn the CMA’s decision and to refer the matter back to the CMA for reconsideration.

In November, the CMA ordered FNZ to sell GBST after finding the completed merger could result in reduced quality of the services provided and higher prices. In its final report, the CMA found that the transaction raised significant competition concerns in the supply of retail platform solutions to investment platforms in the United Kingdom, where FNZ and GBST are two of the four largest suppliers and would account for nearly 50% of the market.

Heidelberg Cement and Schwenk Zement, through their 50/50 full-function joint venture Duna-Dráva Cement (DDC) Cemex Hrvatska (Cemex Croatia) and Cemex Hungária Építőanyagok (Cemex Hungary) Construction materials EC In October 2020, the General Court (GC) upheld the EC’s decision to prohibit Heidelberg Cement and Schwenk Cement’s acquisition of Cemex Croatia and Cemex Hungary.

The GC confirmed that the transaction fell within the EC’s jurisdiction because the turnover of the JV’s parent companies (Heidelberg Cement and Schwenk Zement) exceeded the thresholds of the EU Merger Regulation. Although the acquisition was implemented through their JV DDC, HeidelbergCement and Schwenk Zement were the drivers of the transaction and were significantly involved in the initiation, organisation and financing of the deal. Therefore, it was appropriate for the EC to consider their respective individual turnovers to determine whether the EC had jurisdiction to review the transaction.

The judgment also confirms the EC’s analysis of cement markets as geographically differentiated markets based on transport costs and security of supply. The GC confirmed the EC’s finding that DDC and Cemex Croatia were close competitors, and the transaction would likely result in higher prices for grey cement in Croatia. The GC also found that the parties’ proposed remedy to grant a supplier access to a cement terminal in Southern Croatia was insufficient and would not allow a supplier to compete effectively on a long-term basis.

* The information in this column summarizes the government’s allegations. McDermott Will & Emery LLP offers no independent view on these allegations.