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Arguing that many merger reviews take too long, Assistant Attorney General Charles James said Tuesday that the Department of Justice’s antitrust division shortly will roll out a new program that offers quicker decisions in exchange for prompt delivery of company documents. The initiative includes a more detailed, comprehensive review by the government during the initial 30-day waiting period provided under the Hart-Scott-Rodino Antitrust Improvements Act. The division will then consult with the merging companies early in the process on ways to speed up the government’s analysis. This could include a narrowing of the antitrust division’s review to a few key issues, providing status reports and creating a detailed investigative schedule specifying specific dates for the government to make enforcement decisions. In exchange, merging companies would agree to provide data expeditiously and give the government more time to prepare a court challenge if negotiations fall apart. “The goals of the program are to more quickly identify critical legal and economic issues regarding the proposed transaction, facilitate more efficient and more focused investigative discovery and provide for an orderly process for the evaluation of the evidence,” James said at the American Bar Association’s annual meeting in Chicago. James said each enforcement plan will be tailored to a specific deal. “We will be open to any constructive proposal that we think could advance the ball,” he said. The initiative is expected to take effect around Labor Day. Excluded from the plan will be offers for merging companies to make antitrust concessions in exchange for lesser requirements on DOJ “second-requests,” which is the formal demand for more details on a deal. A separate reform initiative launched in the spring was intended to address problems with that process. James said the success of the program will depend on the willingness of companies and government lawyers to cooperate. “I will be very interested to see how the bar reacts,” James said. “While everyone always says that they want a focused investigation detailing very specific issues in dispute, more focused investigations likely will lead to more effective merger enforcement.” James shared the podium with Federal Trade Commission Chairman Timothy J. Muris. The new FTC chief said his agency plans to attack small mergers that, in falling below the minimum $50 million HSR reporting threshold, are exempted from filing notification documents. “We are quite prepared to go after consummated mergers or mergers that are too small to require an HSR filing,” Muris said. To narrow the minor differences in antitrust enforcement policy and practice between the agencies, the FTC and DOJ will shortly hold joint training sessions. He also said the agency will conduct “brown bag” lunches for antitrust bar members across the country to get feedback on what types of remedies work best in antitrust cases. Muris said the FTC will continue to require “up-front” buyers in some mergers. Muris’ predecessor, Robert Pitofsky, often required merging companies to identify the buyer of divested assets before the agency would approve a consent decree. Muris said it is more appropriate to require an up-front buyer when a proposed divestiture involves an asset package that does not constitute an independent business, when the viability of the business is in doubt or if the assets could deteriorate over time. Muris also reiterated previous comments that he expects few changes in antitrust enforcement from the Pitofsky era. “I can tell you unequivocally that if you come in with transactions that would not fly in the past, you are likely to crash unless you have compelling, stubborn facts on your side,” he said. For deals involving high-technology companies, Muris said he plans a study to evaluate the consequences of the FTC’s past decisions to forego enforcement opportunities. Regarding the DOJ merger negotiation initiative, Muris gave his support. “The points Charles made are excellent,” he said. But lawyers at the session were less sanguine. Stephen Calkins, a professor at Detroit’s Wayne State University, said the program is likely to have only a minimal impact. “Can this make a difference? Yes,” he said. “But when the stakes are high, both sides will use whatever tricks will help them.” Other antitrust lawyers said the merger program won’t address the underlying problem. Corporations hire law firms based on their assertion that they can fight off antitrust regulators, and entering into this type of deal would suggest a more conciliatory approach that may not fly with clients, they said. “The parties may not want to do it,” one of the lawyers said. Copyright (c)2001 TDD, LLC. All rights reserved.

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