CAZ Investments Chief Investment Officer Christopher Zook analyzes the number of merger and acquisition deals that took place under Biden versus Trump.
The Biden-Harris administration took an aggressive stance in scrutinizing proposed mergers and acquisitions in recent years, which resulted in several deals being blocked or paused due to regulatory action.
The Federal Trade Commission (FTC) and the antitrust division at the Department of Justice (DOJ) are the main regulatory bodies responsible for reviewing mergers and challenging them in court if there are concerns about the competitive impact.
Those two agencies have challenged several prominent mergers in recent years, several of which were blocked by courts or abandoned by the companies involved in 2024.
FTC Chair Lina Khan said in a November interview with the Council on Foreign Relations that the increased scrutiny of mergers means that “potential antitrust risk is part of the conversation on day one,” and added, “As a law enforcer, I want people to be thinking about whether their deal is going to violate the law or not going to violate the law and so that’s progress.”
THE FTC: SEE HOW MANY MERGERS AND ACQUISITIONS IT BLOCKED DURING BIDEN ADMIN
Federal Trade Commission Chair Lina Khan has led the administration’s efforts to challenge mergers on competitive grounds. (Drew Angerer/Getty Images / Getty Images)
Here’s a look at some of the mergers that were blocked, abandoned or put on hold in 2024 amid federal antitrust scrutiny.
Albertsons and Kroger
The FTC and state legal authorities prevailed this month in lawsuits brought against the proposed $25 billion merger between Albertsons and Kroger, which would’ve been the largest-ever merger in the grocery industry.
The two companies expressed disappointment that the courts rejected their proposed merger in the wake of the ruling. Albertsons and Kroger had planned to divest more than 500 stores to C&S Wholesale Grocers to address concerns about the competitive impact on the grocery industry.
Albertsons terminated the merger agreement following the rulings. It also filed a lawsuit alleging Kroger breached the merger contract by not divesting some assets, failing to address regulators’ feedback, rejecting stronger divestiture buyers and not cooperating with Albertsons. A Kroger spokesperson pushed back on those claims, telling The Wall Street Journal that Albertsons was deflecting blame for the merger’s failure and itself breached the merger contract.
Kroger and Albertsons abandoned their merger following court rulings. (Kroger: Charles Bertram/Lexington Herald-Leader/Tribune News Service via Getty Images | Albertsons: Shelby Tauber/Bloomberg via Getty Images / Getty Images)
FEDERAL JUDGE BLOCKS KROGER’S $25B ACQUISITION OF ALBERTSONS
Capri and Tapestry
Luxury fashion companies Capri and Tapestry terminated their merger in November 2024 after a judge ruled in late October that their tie-up would undermine competition in the luxury handbag and accessories space.
The ruling rejected the argument made by the companies that handbags are nonessential goods that are price-sensitive to consumer preferences, with the judge writing that assertion “ignores that handbags are important to many women, not only to express themselves through fashion but to aid in their daily lives.”
Had the merger proceeded, it would’ve united Tapestry’s Coach, Kate Spade and Stuart Weitzman brands with Capri’s Versace, Jimmy Choo and Michael Kors.
Versace was among the luxury brands that would’ve been combined had the Capri and Tapestry merger gone forward. (Photo by Scott Olson/Getty Images / Getty Images)
JETBLUE, SPIRIT AGREE TO TERMINATE MERGER OVER REGULATORY ISSUES
JetBlue and Spirit
JetBlue and Spirit terminated their merger in March 2024 after determining it was the “best path forward” when it became clear the two airlines were unlikely to receive legal and regulatory approvals by their July 2024 deadline for the deal to conclude.
The two companies envisioned the merger as a way of creating a national low-fare competitor to the so-called Big Four airlines – American, United, Delta and Southwest.
A federal judge in January blocked the proposed merger between JetBlue and Spirit after agreeing with the Justice Department that the deal would hurt the availability of low-cost air travel tickets.
FTC SUES TO BLOCK $4B MERGER OF MATTRESS FIRMS
JetBlue and Spirit abandoned their planned merger amid regulatory scrutiny. (Photo by Joe Raedle/Getty Images / Getty Images)
Tempur Sealy and Mattress Firm
Tempur Sealy and Mattress Firm proposed a $4 billion deal in May 2023 that would see the mattress supplier acquire the retailer, though the deal is currently in legal jeopardy.
The FTC cast a bipartisan 5-0 vote in July to block the merger that would unite the world’s largest mattress supplier and the biggest mattress retailer over concerns about the competitive impact on the industry as well as prices facing consumers.
Tempur Sealy and Mattress Firm have argued that the bedding industry is “highly competitive” as consumers can choose from “a diverse selection of products, brands, price points, and purchasing channels.”
Closing arguments in the federal court case were held in mid-December, though a decision is yet to be announced.
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UnitedHealth Group and Amedisys
The DOJ filed a lawsuit in November to block UnitedHealth Group’s proposed $3.3 billion acquisition of Amedisys, a home health company that provides hospice services.
The agency argues that the deal would eliminate competition in the home health and hospice industry, hurting patients, insurers and nurses in the process. Attorney General Merrick Garland said in announcing the suit that the agency wants to “check unlawful consolidation and monopolization” in the health care industry.
Optum, a subsidiary of UnitedHealth Group, argues on a website supporting the deal that there is a high degree of competition in the home health and hospice care industries and that the merger would enhance competition, rather than undermining it.
