The Biden administration is scoring significant antitrust victories, impacting corporate mergers in 2024. Recent federal court decisions, such as blocking JetBlue’s $3.8 billion acquisition of Spirit Airlines and Illumina’s $7.1 billion reacquisition of Grail, have executives reconsidering new deals. Ongoing antitrust reviews affect proposed mergers, from air carriers Alaska and Hawaiian to grocery chains Kroger and Albertsons. The FTC is also probing investments by Microsoft, Amazon, and Google in AI startups OpenAI and Anthropic. The “anti-merger” rhetoric from Washington is influencing corporate decisions, with regulatory scrutiny increasing and some deals facing challenges.
Debbie Feinstein, head of Arnold & Palmer’s global antitrust practice, notes that corporate lawyers believe the current environment deters deals due to potential delays and litigation. More companies are receiving “second requests” from federal officials, causing delays in deal reviews. The Biden administration’s track record in stopping announced deals had been mixed, but recent successes, especially in the airline industry, demonstrate a growing impact.
A federal judge blocked the JetBlue-Spirit union, citing concerns about higher prices for consumers. This decision hinged on a novel DOJ theory, considering Spirit Airlines in a different market due to ultra low-cost fares. The ruling poses challenges for both companies, with Spirit’s financial outlook in question. Similar legal theories will be tested in the pending decision on the Alaska-Hawaiian merger.
