The Federal Trade Commission and the Department of Justice today released their annual antitrust report, showing a slight decline in the number of mergers reviewed by the government last year but a jump in enforcement actions by the FTC.
In fiscal year 2012, the agencies received a total of 1,429 merger filings, a 1.4 percent drop compared to 2011, when there were 1,450 reportable mergers. Under the Hart-Scott-Rodino Act, companies in 2012 were required to notify the government of deals worth more than $68.2 million prior to closing the transaction (the threshold was raised to $70.9 million in 2013).
The agencies issued fewer second requests for information in fiscal 2012, flagging 49 mergers for further investigation. That’s an 11 percent decline from 2011, when the agencies took a closer look at 55 deals. The FTC last year issued second requests in 20 mergers, and DOJ flagged 29, compared to 24 and 31 respectively the year before.
However, the FTC brought more enforcement actions to stop anti-competitive deals, objecting to 25 mergers, compared to 17 in 2011, a 47 percent increase. DOJ challenged 19 mergers in 2012, down from 20 in 2011.
According to government statistics, the banking/insurance sector had the most transactions – 19 percent of all deals – followed by manufacturing. Health services made up just 3.9 percent of total mergers, but received a far greater share of scrutiny from antitrust regulators.
For example, the FTC last year challenged OSF Healthcare System’s proposed acquisition of Rockford Health, winning a preliminary injunction to block the deal in Illinois federal court. The FTC also issued an administrative complaint challenging Omnicare’s acquisition of long term care pharmacy PharMerica Corp. Omnicare abandoned the deal.
The FTC also went after Healthcare Technology Holdings Inc.’s proposed acquisition of SDI Health; Laboratory Corp. of America’s purchase of Orchid Cellmark Inc.; Fresenius Medical Care A.G. & Co.’s acquisition of Liberty Dialysis Holdings Inc.; and Renown Health’s acquisitions of two cardiology groups in Nevada. The FTC also challenged four deals involving pharmaceutical companies and one concerning medical devices.
The Justice Department objected to deals including the $7.9 billion merger of Exelon and Constellation Energy Group Inc., simultaneously filing a complaint and consent decree requiring divestitures. The department also required divestitures in United Technologies Corp.’s $18.4 billion purchase of Goodrich Corp. and the acquisition of Sara Lee Corp.’s North American fresh bakery business by Grupo Bimbo S.A.B. de CV and BBU Inc.