NEW YORK (Reuters Breakingviews) - America’s antitrust enforcers can’t catch a legal break. Some 18 days after the U.S. Federal Trade Commission lost a key case, a court on Monday ruled against trustbusters at the Department of Justice seeking to stop insurer UnitedHealth’s $8 billion takeover of claims processor Change Healthcare. Unless they start scoring court wins, competition hawks’ legacy may be less stopping M&A than making it more painful.
UnitedHealth’s victory, which followed 20 months of investigation and litigation, confirms that merger reviews generally are becoming more onerous. Change’s counsel argued in court that the DoJ’s hard line may dissuade participants in a merger from working with enforcers to come up with potential remedies that lessen the impact of consolidation. Instead, parties may figure out such sweeteners, like possible divestitures, on their own. Defending these proposals in court further pushes up the potential cost of dealmaking.
The rising expense hasn’t dissuaded UnitedHealth from pursuing further acquisitions, like its $5.4 billion purchase of LHC in March. Deep-pocketed giants can afford to take a stand on deals. The risk of bigger legal bills could discourage some merger hopefuls. But the Biden administration remains a long way from fundamentally changing the competitive landscape. (By Jonathan Guilford)
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