Closing a merger or acquisition can be complex, especially if there is a “second request” antitrust inquiry.
Successful executives understand that closing a deal in a concentrated market can be highly complex. The added complication in these deals is their potential to receive an additional antitrust inquiry for information called a “second request.” In the United States, this type of inquiry leads to an altered deal more than 80% of the time, according to the US Federal Trade Commission (FTC). This article addresses several key steps C-suite executives can take when impacted by this situation:
- Understand the regulations and uncertainty inherent in the request process through preemptive analysis to identify key risks
- Understand the challenges and work involved in a second request for information
- Employ leading practices to preserve deal objectives
Increased market concentration
Market consolidation is accelerating in several industries, and executives are increasingly using M&A to drive growth while seeking to maintain competitiveness in the age of digital disruption. In fact, 75% of industries have experienced an increase in market consolidations over the past two decades, according to a paper written by finance professors from Rice, York and Cornell universities. For example, American consumers now have two major choices for pharmacies, four choices for major (non-regional) airlines and four major cell phone carriers.