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FTC cracks down on anticompetitive mergers and acquisitions

by | Apr 28, 2022 | Firm News

Planning a merger or acquisition in New York just got a bit more complex. This is due to a new series of FTC initiatives. The point of these new rulings has been to take into account the number of hostile M&A moves that have occurred in recent times. These moves have reshaped the face of business in New York City.

Approval for M&A transactions is now required

FTC rules regarding the oversight and limiting of mergers and acquisitions have been in remission for over 25 years. As a result, the number of hostile takeovers and other aggressive acquisition moves has been on the increase. However, the FTC has finally voted to rein in these companies by imposing new approval measures.

These measures are designed to keep overly aggressive companies from going on a buying binge. They are also set up in order to curb the tendency toward monopoly that has been encouraged in recent years. While controversial, this resolution remains the letter of the law. Firms will need to seek approval before acting.

What factors have influenced the FTC ruling?

Part of the reason for the new FTC vigilance will be to put the brakes on hostile takeovers. There have been a great many of these forced mergers and acquisitions in New York City in the past few years. Many complaints and protests have been filed. Things have gotten to the point where the FTC has been forced to take action to redress this issue.

The FTC has pledged to review a number of factors when making decisions on future M&A approvals. These may include the nature of the transaction and the firm’s level of pre-merger market power. The ultimate point of the review is to free up the market by putting restrictions on predatory companies.