LEGAL PRACTICE: US – DIVESTITURE – FINANCIAL SECTOR – GUIDELINES

Guidelines for financial buyers of U.S. antitrust divestitures

In transactions raising significant antitrust issues, divestiture of one firm’s business in the overlap market(s) at issue can often resolve the antitrust authorities’ concerns while permitting the parties to proceed with the remainder of the deal. Such divestitures present an excellent opportunity to acquire assets at attractive prices. Several aspects of these sales would appear particularly appealing to private equity and other financial buyers. Notwithstanding these factors, private equity buyers have played a limited role as acquirers of antitrust-mandated divestitures in the U.S. to date, with mixed success. This article examines the U.S. antitrust agencies’ goals and concerns in evaluating proposed financial buyers of divestiture assets and analyzes recent examples of both cautionary tales and success stories, with the goal of providing practical guidelines for financial buyers considering competing for this unique asset class. Financial buyers that can successfully navigate the agency review process may find that the rewards are significant.

1. In transactions raising significant antitrust issues, divestiture of one firm’s business in the overlap market(s) at issue can often resolve the antitrust authorities’ concerns while permitting the parties to proceed with the remainder of the deal. Such divestitures present an excellent opportunity to acquire assets at attractive prices. [1] In addition, several aspects of these sales would appear particularly appealing to private equity and other financial buyers: – timelines that reward experienced buyers able to move quickly and decisively; – limited competition from strategic buyers due to regulatory concerns; – opportunities to acquire attractive assets that might not otherwise go on the market; and – oversight from antitrust agencies seeking to ensure that the seller provides a

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Authors

  • Fried Frank Harris Shriver & Jacobson (New York)
  • Fried Frank Harris Shriver & Jacobson (New York)

Quotation

Nathaniel L. Asker, Aleksandr B.  Livshits, Guidelines for financial buyers of U.S. antitrust divestitures, November 2016, Concurrences Review Nº 4-2016, Art. N° 81339, www.concurrences.com

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