By: David Dayen (The American Prospect)
On the afternoon of last Friday, the Antitrust Division of the Justice Department reached a settlement in a merger dispute involving two of the three major companies in the residential door locks and digital security equipment market. The settlement permits Assa Abloy, a company known for its acquisitions, to acquire Spectrum, one of its two competitors, for a total of $4.4 billion. The agreement includes limited divestments to Fortune Brands, penalties for delayed divestiture, and the appointment of a trustee to ensure compliance.
This outcome raises some questions. Jonathan Kanter, the head of the Antitrust Division, has previously expressed a lack of interest in “behavioral remedies,” which involve approving mergers with conditions. In January 2022, Kanter stated to the New York State Bar Association that complex settlements, whether behavioral or structural, suffer from significant shortcomings. He emphasized a preference for seeking straightforward injunctions to block transactions when the division determines that a merger is likely to harm competition.
Interestingly, in this particular case, Kanter did attempt to block the transaction, and the trial had been ongoing for several weeks. However, the Antitrust Division unexpectedly reversed its position and agreed to a settlement that closely resembled Assa Abloy’s initial offer. This sudden change raises questions about the reasoning behind the decision…
