FTC and DOJ Merger Challenges Up 27 Percent in FY 2015

U.S. government agencies challenged 42 mergers in fiscal year 2015, up 27 percent from the 33 challenges in the previous fiscal year, according to an annual report by Cornerstone Research. The second edition of this report covers 10 years of investigation and enforcement data through FY 2015.

As noted in Trends in Merger Investigations and Enforcement at the U.S. Antitrust Agencies: FY 2006–FY 2015, the increase in challenges coincided with a rise in reported merger transactions. The 1,754 mergers in FY 2015 was the second-highest total in the past 10 fiscal years and 136 more than in FY 2014. Since mergers and challenges increased at approximately the same rate, however, the percentage of challenges by the FTC and DOJ in FY 2015 remained at the historical average of 2.2 percent (FY 2006 through FY 2014).

“Enforcement activity remained relatively consistent with the overall level of previous years,” said Cagatay Koç, a principal of Cornerstone Research and coauthor of the report. “Where we did see a significant jump was in mergers valued over $1 billion. These transactions accounted for two-thirds of second requests. This is the only time their share of second requests was over 50 percent in the last 10 fiscal years.”

Cornerstone Research’s proprietary Enforcement Focus Indicator (EFI) provides insight into industry trends by reporting on the share of second requests in a specific sector relative to its share of transactions. The transportation, retail and pharmaceutical sectors saw the strongest enforcement focus in FY 2015.

Key Findings

  •     The last three fiscal years have seen a steady increase in reported merger transactions from 1,286 in FY 2013 to 1,754 in FY 2015.
  •     The number of transactions cleared to the FTC or DOJ for further investigation declined from 274 in FY 2014…

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