The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
U.S. telecoms industry set for M&A negotiations frenzy. In 10 days, the U.S. Federal Communications Commission will lift a ban on telecoms companies engaging in merger talks, and Wall Street is betting on T-Mobile US Inc., Sprint Corp and Dish Network Corp to be the first ones out of the gate. Shares of these companies have soared over the past 12 months on expectations of deal talks, and are trading at up to 31 times forward earnings, versus the S&P 500 telecom services index’s .5SP50 18 times. The rich valuations could discourage acquirers, who also have to assume the risk that antitrust regulators may look askance at more consolidation in the sector after a wave of mergers in recent years, investment bankers and industry experts say.
Antitrust Agencies Say Alaska Health Policy Stifles Competition. Federal antitrust officials on April 12 urged Alaska lawmakers to repeal the state’s program requiring health-care providers to obtain state approval before expanding. At the request of a state lawmaker, the Justice Department and the Federal Trade Commission weighed in, saying the restrictions can harm competition by limiting the availability of new health care services. Alaska Sen. David Wilson (R) is sponsoring legislation to repeal the program.
Maersk Wins Conditional EU Approval for Hamburg Sud Takeover. World No. 1 shipping company Maersk Line gained EU antitrust approval on Monday for its acquisition of Hamburg Sud (HSDG) after agreeing to pull the German company out from five consortia on trade routes to address competition concerns. The bid by Maersk, part of Denmark’s A.P. Moller-Maersk, underscores the wave of mergers in an industry struggling with over-capacity and slowing global trade.
Siemens, Bombardier Vie for Control of Rail Joint Venture-Sources. Talks about uniting the rail operations of Germany’s Siemens and Canada’s Bombardier are being complicated by the desire of both companies to keep control of a merged business, two people close to the matter said on Wednesday. Antitrust issues and political considerations could also ultimately make a deal to create a company with combined sales of $16 billion hard to pull off, industry experts said. The two groups are talking about a joint venture that could compete better with Chinese state-backed market leader CRRC, which is expanding aggressively abroad and would still be twice their combined size by revenue.
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