A purchaser’s due diligence investigation of a seller’s business should include a component that addresses anti-trust concerns. An obvious anti-trust concern is whether the acquisition itself may be subject to anti-trust scrutiny by, and have to be reported to, the federal government. My November 22, 2016 M&A Nugget addressed that. However, other anti-trust issues arise. The seller’s commercial agreements should be reviewed for potential anti-trust violations, including any agreements that contain non-competition, exclusivity and pricing provisions. The transaction may be required to be reported to governments other than the United States Federal Government, so the purchaser should obtain an understanding of all the jurisdictions in which the seller and its affiliates does business. Next, the purchaser should inquire about any actual or threatened complaints or investigations by the federal government or third parties regarding anti-trust violations. By addressing these issues, the purchaser will be able to evaluate the anti-trust risk of the transaction. Next week’s Nugget will discuss one of the federal government’s anti-trust concerns, known as “Gun-jumping”.
ABOUT GLENN D. SOLOMON
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Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
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