Aug 4, 2021 - Economy & Business

The FTC's merger mayhem

Data: FTC; Chart: Danielle Alberti/Axios

The Federal Trade Commission can't keep up with the "tidal wave" of mergers that need its careful scrutiny.

Driving the news: The FTC said Tuesday in a blog post that it won't be able to finish reviewing all the deals on its plate within its standard 30-day period — and that it will notify companies via form letter if a review remains open longer than 30 days.

  • Companies that, after receiving the form letter, proceed with deals that haven't been fully investigated are "doing so at their own risk," the agency said.

Why it matters: The 30-day waiting period for antitrust review is a mainstay of M&A deal procedure. Companies expect to move on after the antitrust purgatory expires. And for investors who make bets on M&A, extended timelines for deal closures can substantially eat into their returns.

Context: President Biden unveiled an antitrust-focused executive order last month that, among many other things, called for closer scrutiny of mergers.

  • The FTC's new chair, Lina Khan, has made no secret of the fact that she'd like to use the agency's enforcement powers more aggressively.

Some of the larger deals announced in the past few months include Datavant's $7 billion acquisition of Ciox Health, Danaher's $9.6 billion purchase of Aldevron, and Discovery Communications' $43 billion merger with AT&T's Warner Media.

The bottom line: The FTC isn't going to let mergers slide through without proper scrutiny — and it's going to take as much time as it needs.

Go deeper