On February 18, 2021, the U.S. Court of Appeals for the Fourth Circuit upheld the first divestiture order in an antitrust suit brought by a private plaintiff which challenged its rival’s acquisition four years after the transaction. Post-consummation merger challenges are rare and—until now—have only been successful when brought by the government. Indeed, the Fourth Circuit remarked that “no court had ever ordered divestiture in a private suit before this case,” but held that the district court did not abuse its discretion in doing so here: “this case is a poster child for divestiture.” Private parties, while permitted under §16 of the Clayton Act to sue to block or unwind mergers, seldom do so, typically opting instead to participate in the pre-closing investigative review process conducted
The US Court of Appeals for the Fourth Circuit upholds the first divestiture order in an antitrust suit brought by a private party challenging a merger, years after the transaction, in the door manufacturing sector (Steves & Sons / Jeld-Wen / CMI)
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