To preserve competition, federal antitrust agencies may require parties to divest certain assets before allowing a merger, according to law firm Epstein Becker Green.
What you should know:
1. The Federal Trade Commission and Department of Justice's Antitrust Division sometimes require an entity to divest assets, such as a physician group or ASC, in order to preserve competition.
2. This requirement is more common in transactions with a national scope. However, divestiture may be required in local transactions where one of a party's multiple business lines poses a threat to competition.
3. The FTC's divestiture guidance, "Negotiating Merger Remedies," is helpful for entities involved in a transaction that may require divestiture, as well as for parties that may want to acquire a divested asset.
https://www.ftc.gov/tips-advice/competition-guidance/merger-remedies
4. The guidance offers insight on the divestiture process, provisions and timing, as well as how the FTC evaluates buyers.
Click here to read the guidance.
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