In Coronavirus Response, Merger and Acquisition Activity Slowed by DOJ

The federal government will provide itself 30 additional days to review economically significant mergers and acquisitions—which include for example the purchase of TD Ameritrade by Charles Schwab.

The U.S. Justice Department has announced a series of “antitrust civil process changes” in response to the developing coronavirus pandemic.

According to Assistant Attorney General Makan Delrahim, a leader of the Department of Justice (DOJ) Antitrust Division, the temporary process changes will help ensure that the DOJ can carry out its enforcement mission while protecting the health and safety of its workers and the public.

Technically, the DOJ Antitrust Division has adopted a series of temporary changes to its civil merger and acquisition (M&A) investigation processes, which will remain in place “during the pendency of the coronavirus (COVID-19) event.”

“The Division remains open for business, and we will continue to carry out our mission to protect competition and the American consumer,” Delrahim notes. “We are in this together and intend to work cooperatively with the business community on pending mergers, consistent with our responsibilities under the antitrust laws and to protect the health and safety our employees and the public.”

For mergers currently pending or that may be proposed, the Antitrust Division is requesting merging parties add an additional 30 days to their timing agreements to complete its review of transactions after the parties have complied with document requests. If circumstances require, the Division “may revisit its timing agreements with merging parties in light of further developments.”

The Division encourages firms involved in M&A activity to submit their questions via the normal channels.

While the eventual impact of this process change may prove to be inconsequential, this development could theoretically increase scrutiny on some of the high volume of M&A activity that is ongoing in the retirement planning and investment advisory industry. Presumably, the ongoing acquisition of TD Ameritrade by Charles Schwab—a sizable and potentially competitively significant deal valued at $26 billion—was already and will continue to receive a close review from antitrust regulators. The same is certainly true for another mega deal that is still unfolding—the acquisition of Legg Mason by Franklin Templeton.