Part I. Answer each of the following questions as True ("T") or False ("F"):

1. In order for a merger in the United States to violate Section 7 of the Clayton Act, the Federal Trade Commission ("FTC") or Antitrust Division of the Department of Justice ("DOJ") is required to demonstrate that the proposed merger will in fact result in a substantial lessening of competition. Answer______

2. Only the FTC and DOJ can challenge a merger under the US antitrust laws. Answer________

3. If the FTC or DOJ challenges a merger and shows that it will result in a highly concentrated market with the proposed merging parties having a dominant share of the relevant market, the FTC or DOJ are entitled to a rebuttable presumption that the proposed merger is anti-competitive and the burden shifts to the merging parties to show otherwise. Answer________

4. Cost efficiencies resulting from a merger must be merger specific (i.e., they cannot be achieved in the absence of a merger) in order for them to be considered by a court as a potentially pro-competitive benefit of the proposed merger. Answer_______

5. There can be only one relevant geographic market for analyzing a proposed merger under Section 7 of the Clayton Act. Answer_______

6. A merger that would result in a highly concentrated market with only a few competitors may result in unilateral anti-competitive effects even if no one firm will have a dominant share of the relevant market post-merger. Answer_______

7. Mergers are required to be notified to the FTC and DOJ if the purchase price is above $80.8 million (US) regardless of whether the party being acquired has any assets or sales in or into the US. Answer________

8. Early termination of the waiting period under the Hart-Scott-Rodino Act after. proposed merger has been notified to the FTC and DOJ can be granted at anytime, including both during the initial waiting period and after a Request for Additional Information or Second Request has been issued. Answer________

9. Federal Trade Commission v. Heinz is an example of a merger being enjoined because it may result in coordinated effects. Answer_________

10. Federal Trade Commission v. Sysco is an example of a merger being enjoined because it may result in unilateral effects. Answer__________

11. Once a proposed merger is consummated, it cannot be challenged and undone under Section 7 of the Clayton Act. Answer_________

12. Even though a merger has already been consummated, the Committee on Foreign Investment in the United States ("CFIUS") can still recommend to the President of the United States that the merger be undone. Answer________

13. Transactions that are abandoned as a result of an objection by CFIUS are typically abandoned by the parties only after the President of the United States issues an Executive Order requiring the transaction to be abandoned. Answer_______

14. CFIUS has recommended that a proposed merger would harm the national security of the United Sates because the US company to be acquired by a foreign person is located close to a US military installation even when the product of the US company to be acquired did not itself raise any national security concern Answer_______

15. If the acquiring party or buyer agrees to a "hell or high water" clause in the merger agreement, it is required to take any and all actions to obtain government approvals so long as those actions do not have a materially adverse effect on the proposed merger. Answer_______

17. The FTC and DOJ typically favor imposing behavioral remedies (e.g., an agreement by the merging parties not to raise prices for a certain number of years) as opposed to requiring divestitures when they find that a proposed merger may have anticompetitive effects. Answer______

18. Courts today in the United States no longer rely on the Brown Shoe "practical indicia" when defining a. relevant product market because Brown Shoe was decided by the US Supreme Court more than fifty years ago. Answer________

19. Courts consider whether the prices of the parties to a merger vary in areas where they are both present as compared to areas where only one of merging parties is present and they do not compete against each other. Answer_______

20. If a merger is challenged by the DOJ, DOJ commences two simultaneous proceedings, one in federal court and the other before an Administrative Law Judge at the Department of Justice. Answer____________

Part II.

1. What are the effects in a relevant market that a proposed merger or acquisition of assets may result which the FTC or DOJ look for in determining whether they believe that the transaction probably causes anti-competitive effects in the market so as to tend to substantially lessen competition and violate Section 7 of the Clayton Act?

2. What are the pro-completive effects of a proposed merger or acquisition on which the merging parties would attempt to rely to rebut a presumption that the merger will have anti-completive effects and explain what the merging parties must demonstrate as to each such identified pro-competitive effect in order for it to be recognized by the courts for consideration in evaluating the merger?

3. Company A manufactures and sells men's shoes to retailers in the US. Company B manufactures and sells men's shirts to retailers in the US. Is there a relevant market in which an acquisition of Company B by Company A may result in a substantial lessening of competition? Explain your answer.

4. Company A manufactures and sells men's shoes in the US and it is being acquired by a financial buyer which has no other investment in any shoe manufacturer or seller. What would you advise Company A regarding the degree of antitrust risk associated with the proposed transaction. Explain your answer.

5. In the transaction described in Question 4 above, would you advise Company A to seek any deal protection provisions in the purchase agreement, such as a hell or high water or other types such as reasonable best efforts? Explain your answer.

6. In the transaction described in Question 4 above, if you were the lawyer for the financial buyer and Company A insisted it wanted deal protection with the financial buyer agreeing to a hell or high water clause, what would you advise the financial buyer as to whether it should agree to such a provision and explain why. you would provide that advice?

7. Company A manufactures men's shoes in the US which it sells to retail outlets (including online) which then sell them to the ultimate consumer. Company A has a share of all US sales to retail outlets (including online) of men's shoes of 15%.. Company B manufactures men's shoes in the US which it also sells to retail outlets (including online) which then sell them to the ultimate consumer. Company B has a share of all US sales to retail outlets (including online) of men's shoes of 10%. Company C is the dominant manufacturer of men's shoes in the US and also sells its shoes to retail outlets (including online). Company B has a 10% share of all US sales to retail outlets (including online) in the US. Company C has a share of 65% of the sale of men's shoes to retail outlets (including online) in the US. The remaining 10% of sales of men's shoes to retail outlets in the US is comprised of very small US manufactures and some foreign manufactures who import shoes into the US. Answer each of the following questions and explain your answer:

a. What is the relevant product market to analyze whether a proposed merger of Company A and Company B may substantially lessen competition?

b. What is your assessment of the antitrust risk of a proposed acquisition of Company B by Company A?

c. In light of your assessment of antitrust risk in response to question b above, what deal protection provisions would you advise Company B to attempt to negotiate and why?

d. In light of you assessment of antitrust risk in response to question b above, what deal protection provisions would you advise Company A to accept if requested by Company B and which deal protection provisions would you advise Company A to reject if requested by Company B and why?

Answer rating: 100% (QA)

1 False The FTC or DOJ is only required to demonstrate that the proposed merger is likely to result in a substantial lessening of competition 2 False The FTC and DOJ can both challenge a merger under ... View the full answer