Chilling effect on M&A

Extracted Attributes

• Key Regulators

  Federal Trade Commission (FTC), Department of Justice (DOJ), European Union (EU), and United Kingdom (UK)

• Primary Drivers

  Aggressive antitrust enforcement, novel theories of harm, and longer investigation periods

• Strategic Shift

  Startups moving toward profitability and capital efficiency

• Secondary Factors

  Economic uncertainty, inflation, and political stress

• Canceled Deal Value

  $20 billion (Adobe/Figma merger)

• Impacted Exit Route

  Venture Capital Exits and the IPO Market

Timeline

• The FTC and DOJ initiate new merger guidelines contributing to the chilling effect on transactions. (Source: Hogan Lovells)

  2023-12-01

• All-In Podcast Episode 158 discusses the cancellation of the Adobe/Figma merger and the regulatory impact on VC exits. (Source: All-In Podcast)

  2023-12-18

• Mayer Brown analyzes how 2023's regulatory turbulence and blocked deals are affecting 2024 dealmakers. (Source: Mayer Brown)

  2024-02-01

• M&A forum in Silicon Valley addresses the lack of immunity for significant deals under current antitrust scrutiny. (Source: Hogan Lovells)

  2024-04-24

• Bloomberg Law reports on the continued chilling effect of aggressive enforcement on non-blockbuster deals. (Source: Bloomberg Law)

  2024-10-08

Wind chill

Wind chill (popularly wind chill factor) is the sensation of cold produced by the wind for a given ambient air temperature on exposed skin as the air motion accelerates the rate of heat transfer from the body to the surrounding atmosphere. Its values are always lower than the air temperature in the range where the formula is valid. When the apparent temperature is higher than the air temperature, the heat index is used instead.

Web Search Results

• Bloomberg Law: “Chilling Effect” of FTC & DOJ's Aggressive M&A ...

  To read the full article, click here. [...] “‘This is one of the big ironies of the current enforcement approach,’ Jesse Solomon, a Davis Polk & Wardwell antitrust partner in Washington, said. ‘The chilling effect is largely on the non-blockbuster deals that are getting in-depth reviews but cannot sustain the costs of those reviews.’” [...] # Bloomberg Law: “Chilling Effect” of FTC & DOJ’s Aggressive M&A Enforcement Approach Oct 8, 2024 | Blog Post The Federal Trade Commission (FTC) and Department of Justice (DOJ)’s aggressive approach towards mergers and acquisitions (M&A) is deterring companies from pursuing deals, write Bloomberg Law reporters Justin Wise and Mahira Dayal – threatening even procompetitive deals that pose no antitrust harms.

• [PDF] Few merger deals immune from regulatory scrutiny, M&A attorney says

  Climan was responding to ques­ tions from the Daily Journal ahead of the firm’s M&A forum, to be held in Silicon Valley April 24. He wrote that the FTC’s advancement of novel theories and new merger guide­ lines initiated in December had contributed to this chilling effect. “Today, it seems that very few M&A transactions of significant size are immune from antitrust scrutiny. Deals that would have sailed through the Hart-Scott-Rodino process with-out a hitch half a dozen years ago are now being

• A New Global Antitrust Regime and Its Chilling Effect on Mergers

  in the regulatory landscape. [...] Global antitrust regimes have become increasingly aggressive in their antitrust enforcement and have significantly increased risks to merging firms. These regimes have had a chilling effect on mergers, especially in the U.S. The DOJ’s and FTC’s new proposed merger guidelines signal an antitrust regime with an appetite for stronger enforcement, longer investigation periods, and entirely new theories of anticompetitive harm. The future of the antitrust regulatory landscape is at a unique turning [...] that a merger is anticompetitive.

• Antitrust M&A: How Will 2023's Turbulence Affect Dealmakers in the ...

  The extent of the Administration’s impact on dealmaking, however, is subject to debate. The Administration asserts that its efforts in blocking deals (regardless of wins vs. losses) resulted in a chilling effect—with the head of the Antitrust Division stating, “Simply put—most anticompetitive deals are no longer getting out of the boardroom.”3 Others, pointing to the government’s mixed record in court, argue that more extensive antitrust reviews (and possible litigation) are simply costs that

• How Uncertainty Impacts Business Sales & Mergers - TKO Miller

  While the promise of lower regulation on the deal making environment was predicted to spur transaction activity, other conditions are creating massive uncertainty. Immigration, tax, energy, and political stress have added to the chilling effect of transactions. There has also been a re-emergence of inflation concerns among business owners, particularly small companies. All these factors drive additional uncertainty and leave businesses unable to confidently determine their future pricing, [...] Even if you eliminate the “who pays for what tariffs and when” arguments, the latest round of tariffs and political polices have, and will continue to have, an impact on mergers and acquisitions. Outside of the actual costs of tariffs, there is the cost of uncertainty, which has a chilling effect on business decisions in general. [...] This outcome has been studied, and we see that during periods of uncertainty, businesses do not invest in equipment and labor and actually become less productive. Bloom, in his 2009 paper studied this effect and found, “hiring and investment rates fall dramatically in the 4 months after the shock because higher uncertainty increases the real-option value to waiting, so firms scale back their plans.” ##### The Impact on Mergers and Acquisitions