March 15, 2021 Articles

DOJ Approves the Use of Binding Arbitration to Resolve Merger Disputes

Following a successful unprecedented use of binding arbitration to resolve a merger dispute, the department recently issued updated guidance on the use of arbitration and case selection criteria.

By P. Jean Baker

The automotive industry has historically relied on steel for automotive bodies, but the industry is increasingly adopting lighter weight aluminum instead. Only four companies supply aluminum body sheet (ABS) in North America. In July 2018, two of those companies—Novelis Inc. and a recent competitive entrant, Aleris Corp.—announced plans to merge. Concerned that the merger would likely substantially lessen competition in the manufacture and sale of ABS in the United States, the DOJ’s Antitrust Division filed a challenge. The United States’ Antitrust Division approved closure of the acquisition subject to a requirement to divest certain assets if the division prevailed in an arbitral proceeding. The parties agreed that the United States would file a complaint in federal court following the completion of fact discovery. On September 4, 2019, a civil complaint was filed in the Northern District of Ohio (United States v. Novelis Inc. & Aleris Corp., No. 1:19-cv-02033, ECF. No. 1). 

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