Big Deal? Size Still Matters to M&A Regulators
Feds revise triggers for automatic merger and acquisition review
Last year saw some successful (NBC/Comcast) and some not so successful (AT&T/T-Mobile) merger applications in the communications sector. And with hope for continued improvement in the overall economic climate springing eternal, it’s possible that more large scale mergers may be in the pipeline. With that in mind, potential merger/acquisition candidates should be aware that the federal government has performed its annual ritual of announcing the thresholds it will use for automatic federal review of mergers and acquisitions.
If a transaction exceeds a certain amount, both the Department of Justice and the Federal Trade Commission must scrutinize the deal and render an opinion about any anti-trust concerns raised by the deal. In addition, as AT&T is acutely aware, when a large merger involves communications assets, the FCC also has no problem sticking its nose into the deal. In fact, the FCC has its own SWAT team (formally called the Office Of General Counsel Transaction Team) to review deals. Unlike the DoJ and the FTC, the FCC’s team is not automatically required to review deals of certain size; they could theoretically refrain from involving themselves in deals that pass the triggers described below. Note, though, that the FCC’s SWAT team – as well as DoJ and FTC – can choose to investigate smaller deals coming in below the triggers.
Readers considering a merger or acquisition should bear in mind that after February 27, 2012, the administration automatically will be sending at least two agencies to take a closer look at transactions where either:
the total value of the transaction exceeds $272,800,000; or
the total value of the transaction exceeds $68.2 million andone party to the deal has total assets of at least $13.6 million (or, if a manufacturer, has $13.6 million in annual net sales) and the other party has net sales or total assets of at least $136.4 million
When negotiating deals, all parties would be well-advised to bear these thresholds in mind. Once those lines are crossed, the prospect of additional (and considerable) time, expense and hassle to navigate the federal review process is a virtual certainty.
Broadcasters and telecommunications operators contemplating possible deals for the coming year should remember that, as far as the federal government is concerned, there may be such a thing as Too Big. The Feds will step in to review an anticipated deal for potential antitrust problems if the deal exceeds certain threshold dollar amounts. The law mandates that those threshold amounts be revised every year for inflation. 
A couple of recent court cases touch on issues we've discussed recently regarding the licensing of image and other trademark-type rights claimed to be held by athletes and sports leagues. 
