Financing Mergers and Acquisitions: Antitrust Issues

Summary

This practice note discusses the antitrust issues that arise for lenders and underwriters that provide financing in connection with mergers and acquisitions. Strategic mergers and acquisitions—those between firms in the same industry—may raise substantive antitrust concerns for not only the parties to the transaction, but also for the banks and other financial institutions that provide financing to enable the consummation of these deals. Lenders and underwriters should understand the antitrust risk and implications of mergers and acquisitions to properly assess whether to commit to and fund the deal and how much financing to provide. This practice note begins with an overview of the antitrust risks that lenders and underwriters face, describes steps counsel can take to assess that risk, and then examines each type of risk and how to spot them in the merger agreement. The practice note concludes with some dos and don'ts for counsel representing lenders and underwriters.