Antitrust Partner Claudia Higgins Weighs in on Antitrust Issues During the Merger Process in Law360

Law360 reports on an important question faced by firms planning a transaction when their deal is undergoing premerger review by the Federal Trade Commission or Department of Justice: Should they signal early in the investigation, or even in their merger agreement documents, that they are willing to commit to a possible settlement to obtain government approval of the deal? There are two differing opinions on this so-called “roadmap” issue, which is referred to this way because it provides a marked path for the government to follow in its investigation of the transaction. Many believe that the government will discover problematic competing assets held by the parties whether they are identified up front or not, and that it is better to be as honest and clear during the approval process as possible. Others feel that offering a settlement early in an investigation may be unwise because the parties then forego the opportunity to present arguments that a settlement is unnecessary, having called the attention of the antitrust agencies to a possible asset divestiture or other settlement proposal.

Kaye Scholer Antitrust Partner Claudia Higgins is of the latter opinion, noting, “If you think you've got some strong arguments against, and your deal can survive the time it will take, I don't believe in offering a settlement any time early in the process.” She adds, “The burden of proof is on the government.”