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Helping investors understand antitrust issues

New antitrust resource for private equity investors

4 min read

Modern Money



As the regulatory and investment climate continues to grow more complex for global investment firms, understanding laws across jurisdictions is becoming increasingly important. In response to these shifts, the American Bar Association recently released the “Private Equity Antitrust Handbook,” designed as a reference for investors and counsel.

Here we talk with the book’s committee member, Deidre J. Johnson, about the handbook and how it can help those in the industry make better decisions.

Tell us a little about the current environment and why this book is so critical now.

We’ve seen an increase in merger control enforcement in recent years both domestically and abroad. In the United States, the Federal Trade Commission and the Department of Justice have recently obtained record settlements for violations of the Hart-Scott-Rodino Act (HSR Act), as evidenced by the $11 million fine imposed for ValueAct Capital’s improper reliance on the “investment-only” exemption. Transactions also face increased scrutiny abroad in jurisdictions such as China and Brazil. This uptick in enforcement coincides with activity in the private equity sector – in 2015, there were more than 3,500 buyout deals globally, totaling more than $400 billion. The Handbook was written to give firms a roadmap for compliance in this growing area of law.


What makes antitrust for private equity firms different and how will the book benefit in-house counsel and other advisors?

Private equity funds differ from other entities such as mutual funds and hedge funds in the types of investments they make, and the manner in which such investments are managed and held. Funds often acquire controlling interests and board representation that can present a number of antitrust issues, given the sheer number of acquisitions made by many funds. In additional to having notification obligations under the HSR Act, the management of portfolio companies may create issues of interlocking directorates under the Clayton Act. And of course, acquisitions may pose substantive antitrust challenges, especially in situations where a private equity firm focuses on investments in particular industries or markets. The Handbook provides an introduction to these concepts, making it an invaluable resource for in-house counsel.


Why should private equity investors have this book on their desks?

This book is the first of its kind that addresses antitrust issues in a private equity context and from a global perspective.  We continue to receive positive feedback from our clients, and we think the Handbook will soon become a must-read for those in the industry.


But these issues go beyond domestic deals. How will the book will help with overseas transactions?

Along with an in-depth review of antitrust law in the United States, the Handbook explores key concepts in a number of important jurisdictions: Brazil, Canada, China, the European Union, India and the United Kingdom. We pay particular attention to concepts that may vary significantly across jurisdictions, such as the definition of “control” and the treatment of minority acquisitions. The Handbook also explores the unique features of each jurisdiction’s merger control regime, such as “associative agreements” in Brazil. The Quick-Reference Guide also summarizes these points to give practitioners a go-to resource.


Learn more about the Private Equity Antitrust Handbook.


Deidre J. Johnson serves as Counsel at Ropes & Gray, recognized as one of the leading private equity practices internationally. Johnson heads the firm’s Premerger Notification practice. She has successfully guided numerous clients through the premerger process and routinely represents buyers, shareholders and sellers in financial and strategic acquisitions including leveraged buy-outs, stock acquisitions, joint venture formations and public takeovers. She has prepared several hundred HSR filings and routinely coordinates merger clearances in multiple jurisdictions including the European Union, Brazil, Canada, China, Japan, Turkey, Russia, South Africa and South Korea, among others. Her clients include multinational corporations, private equity, venture capital and hedge funds, mutual funds and investment advisors. Deidre is a member of the ABA Section of Antitrust Law and coordinated the writing group that developed the “Private Equity Antitrust Handbook.”