According to Bloomberg, Lina Khan, the head of the Federal Trade Commission (FTC), said antitrust enforcers should more frequently move to block mergers that threaten competition rather than relying on traditional remedies to fix deals and then approve them.
FTC Chair Lina Khan outlined her concerns about common measures used by the Justice Department and the FTC to settle merger investigations in a letter to Senator Elizabeth Warren of Massachusetts, who had written to the agency about deals in the defense industry.
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The comments come as the FTC is investigating Lockheed’s US$4.4 billion deal to purchase Aerojet Rocketdyne Holdings, a takeover seen as an early litmus test of whether President Joe Biden will keep mergers among defense contractors in check.
Khan said she’s skeptical of the practice of imposing conditions on how companies operate, known as behavioral remedies, but also said asset divestitures, the most common way that companies win approval for mergers, can be problematic.
“While structural remedies generally have a stronger track record than behavioral remedies, studies show that divestitures, too, may prove inadequate in the face of an unlawful merger,” Khan wrote in the letter dated August 6 that was reviewed by Bloomberg News. “In light of this, I believe the antitrust agencies should more frequently consider opposing problematic deals outright.”
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