Merging with or acquiring another company are incredibly complex business transactions. There are negotiations to make, interested parties to notify, transition teams to build and financial factors to assess.
Once all these steps are taken and a plan is in place, the only thing standing between you and the new business (if the deal is valued at at least $78.2 million) is the approval from the Federal Trade Commission and Department of Justice. However, before you dismiss this step as a formality, you should know that the FTC and DOJ could block the merger if it seems anticompetitive.
A deal could be considered anticompetitive if the result of a proposed merger or acquisition would significantly affect and lessen competition in the market. Under these circumstances, the federal government could deny the deal.
However, business owners across the U.S. are hoping that fewer mergers will be blocked under the Trump administration. The recent appointment of Makan Delrahim to the DOJ could bolster this confidence if he is confirmed
As noted in reports like this one in the New York Times, Delrahim represents the traditional Republican approach to antitrust enforcement. In other words, he is expected to take a more permissive stance with regard to mergers than the Obama administration took.
It should be noted that the government generally approves mergers, regardless of the political leanings of the current administration. However, when mergers are not approved, companies can suffer a considerable financial blow. Business owners may have to revise the deal or give up on the transaction altogether.
Keep in mind, too, that this review process is just one in a long series of steps. Many things must be established, negotiated and confirmed before a deal even reaches the FTC and DOJ for review, and things can fall apart at just about any stage of the process.
Considering all that is at stake in a merger or acquisition, it is crucial that business owners avoid costly mistakes and navigate the process with the guidance of an attorney experienced in these types of complex transactions.