Black Swans, White Whales and Unicorns: When Can Efficiencies Save a Merger?
11 AM EDT
The U.S. Supreme Court has never approved efficiencies as a defense for mergers. However, the Sixth, D.C., Eighth and Eleventh Circuits, and most recently, the Ninth Circuit, have suggested that efficiencies could save the day for the right merger – albeit most recently cautioning “we remain skeptical about the efficiencies defense in general and about its scope in particular.” By contrast, Canada’s Supreme Court has just approved a merger to monopoly based on the efficiencies defense, boldly noting that only “marginal efficiency gains are required for the defense to apply”. Questions remain in both countries and in cross-border cases as to how efficiencies are to be treated in strategic mergers, which is particularly important given the 2014 publication of the Best Practices on Cooperation in Merger Investigations by the U.S. Antitrust Agencies and the Canadian Competition Bureau.
John Harkrider, Axinn, Veltrop & Harkrider LLP
Brian A. Facey, Blake, Cassels & Graydon LLP
Deborah L. Feinstein, Federal Trade Commission
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