February 20, 2015
note examines the transaction and the economic analysis that supported the Commission's conclusion.
February 4, 2015
This post updates one we did last May analyzing antitrust reverse breakup fees in public deals since January 1, 2005.
An antitrust reverse termination fee (ARTF), sometimes called an antitrust reverse breakup fee, is a fee payable by the buyer to the seller if and only if the deal cannot close because the necessary antitrust approvals or clearances have not been obtained. The idea behind an antitrust reverse termination fee is twofold: (1) it provides a financial incentive to the buyer to propose curative divestitures or other solutions to satisfy the competitive concerns of the antitrust reviewing authorities and so permit the deal to close, and (2) it provides the seller with some compensation in the event the deal does not close for antitrust reasons.
Our sample now covers 822 strategic negotiated transactions announced between January 1, 2005, and December 31, 2014. Of these, 88 transactions, or about 10.7% of the total, had antitrust reverse termination fees. The fees were very idiosyncratic and showed no statistically significant relationship to the transaction value of the deal or trend over time, with fees ranging from a low of 0.1% to a high of 39.8%. The average antitrust reverse termination fee for the sample was 5.7% of the transaction value, although several high percentage fees skewed the distribution to the high end. A better indicator may be the median, which was 4.3% of the transaction value.
NB: The percentage intervals on the horizontal axis are not of equal size.
January 15, 2015
Most importantly, the size-of-transaction threshold will increase from the current $75.9 million to $76.3 million, so that once effective, acquisitions of voting stock or assets valued at more than $76.3 million may be reportable.
For more information on the revised thresholds, click here.
For the text of the FTC's Federal Register notice, click here.
Recent Blog Posts
FTC Clears Zillow-Trulia Merger Without Conditions Antitrust Reverse Termination Fees--2015 Update FTC Announces 2015 HSR Act Reporting Thresholds Foreign Antitrust Defendants Feel Some Relief from the Reach of the Sherman Act in Civil Matters Sample Antitrust-Related Provisions in M&A Agreements--2014 Edition