WEBVTT - Antitrust In Focus

0:00:03.279 --> 0:00:08.080
<v Speaker 1>This is Bloomberg Law with June Grosso from Bloomberg Radio.

0:00:09.760 --> 0:00:12.119
<v Speaker 2>This is Bloomberg Law. I'm Madison Mills. I'm in for

0:00:12.200 --> 0:00:12.880
<v Speaker 2>June Grasso.

0:00:13.080 --> 0:00:15.800
<v Speaker 1>This week you got to talk about this Microsoft deal

0:00:15.880 --> 0:00:20.520
<v Speaker 1>because Microsoft's sixty nine billion dollar acquisition of Activision Blizzard

0:00:20.960 --> 0:00:24.480
<v Speaker 1>was temporarily blocked by a federal judge in California, that

0:00:24.680 --> 0:00:28.960
<v Speaker 1>judge saying a temporary restraining order was necessary to maintain

0:00:29.040 --> 0:00:32.640
<v Speaker 1>the status quo while the FTC challenges the deal. So

0:00:32.680 --> 0:00:34.919
<v Speaker 1>here it makes sense of what all that means for us.

0:00:34.960 --> 0:00:39.360
<v Speaker 1>As Jennifer Ree, Bloomberg Intelligence senior antitrust analyst, jen thank

0:00:39.400 --> 0:00:41.800
<v Speaker 1>you so much for coming in to studio with us.

0:00:42.600 --> 0:00:45.000
<v Speaker 1>How big of a deal is this? Does this make

0:00:45.040 --> 0:00:45.640
<v Speaker 1>the deal dead?

0:00:46.400 --> 0:00:48.440
<v Speaker 3>Madison first, thanks for having me. You know, I really

0:00:48.479 --> 0:00:50.320
<v Speaker 3>don't think it does. I mean, I think this is

0:00:50.360 --> 0:00:52.879
<v Speaker 3>a very important step to understand whether this deal is

0:00:52.920 --> 0:00:54.760
<v Speaker 3>going to be dead or not. I mean, bear in

0:00:54.800 --> 0:00:57.200
<v Speaker 3>mind that the temporary restraining order that was issued is

0:00:57.360 --> 0:00:59.600
<v Speaker 3>very short term. You know, that's not a long term

0:00:59.640 --> 0:01:01.920
<v Speaker 3>block the deal. That's just a block to give that

0:01:02.000 --> 0:01:05.120
<v Speaker 3>federal court time to decide whether they should issue a

0:01:05.160 --> 0:01:08.920
<v Speaker 3>preliminary injunction, which would then block the deal, allowing the

0:01:09.000 --> 0:01:13.240
<v Speaker 3>FTC's internal process to complete. That it won't complete, probably

0:01:13.280 --> 0:01:15.800
<v Speaker 3>till about one Q. There will be a hearing on

0:01:15.840 --> 0:01:18.959
<v Speaker 3>the preliminary injunction next week, starting on June twenty second,

0:01:19.080 --> 0:01:22.800
<v Speaker 3>So the temporary restraining order that was entered only lasts

0:01:23.000 --> 0:01:26.360
<v Speaker 3>until basically the later of five days after that decision

0:01:26.880 --> 0:01:30.400
<v Speaker 3>if it's good for Microsoft and basically clears Microsoft, or

0:01:30.440 --> 0:01:32.119
<v Speaker 3>some other date that the judge might set.

0:01:32.720 --> 0:01:35.679
<v Speaker 1>Well, was there any information that we got from this

0:01:35.800 --> 0:01:39.959
<v Speaker 1>decision that was different than the UK decision and gives

0:01:40.040 --> 0:01:44.959
<v Speaker 1>us intel into the thinking of the legal system here

0:01:45.000 --> 0:01:46.920
<v Speaker 1>in the US versus the UK and how they might

0:01:46.959 --> 0:01:47.360
<v Speaker 1>be different.

0:01:47.760 --> 0:01:51.520
<v Speaker 3>You know, not, really, this is really just procedural. A

0:01:51.640 --> 0:01:55.160
<v Speaker 3>tro whist for temporary restraining order is really easy to get.

0:01:55.200 --> 0:01:58.040
<v Speaker 3>The standards are very low. That's not a surprise. When

0:01:58.080 --> 0:02:01.080
<v Speaker 3>the preliminary injunction decision comes out, that'll really give us

0:02:01.080 --> 0:02:04.400
<v Speaker 3>some insight into how the US judge views this versus

0:02:04.400 --> 0:02:06.680
<v Speaker 3>how the UK is viewing it. Now, I should say

0:02:06.840 --> 0:02:09.400
<v Speaker 3>she said something interesting a few weeks ago. She is

0:02:09.480 --> 0:02:13.360
<v Speaker 3>presiding over a private case in which consumers are actually

0:02:13.440 --> 0:02:15.880
<v Speaker 3>challenging this deal. That happens once in a while. Those

0:02:16.000 --> 0:02:18.200
<v Speaker 3>kinds of cases don't tend to go very far. But

0:02:18.320 --> 0:02:21.640
<v Speaker 3>this judge, Judge Corley, is presiding over that case and

0:02:21.720 --> 0:02:24.040
<v Speaker 3>the UK decision did come up, and she said, it

0:02:24.080 --> 0:02:27.600
<v Speaker 3>doesn't My standards are different. I'm not you know, what

0:02:27.720 --> 0:02:30.080
<v Speaker 3>the UK did doesn't necessarily matter to me. I have

0:02:30.120 --> 0:02:32.480
<v Speaker 3>to look at the evidence that's presented to me in

0:02:32.520 --> 0:02:35.079
<v Speaker 3>this case to make my decision. So she's very much

0:02:35.400 --> 0:02:37.880
<v Speaker 3>understands where things are, but is ready to weigh the

0:02:37.880 --> 0:02:40.480
<v Speaker 3>evidence that's presented to or in this hearing that we'll

0:02:40.480 --> 0:02:42.079
<v Speaker 3>start on June twenty second, And.

0:02:42.200 --> 0:02:44.760
<v Speaker 1>Just to give our audience the recap, can you remind

0:02:44.840 --> 0:02:47.160
<v Speaker 1>us the status of the UK situation as well?

0:02:47.720 --> 0:02:50.919
<v Speaker 3>Right, this is so complicated. So far, this deal has

0:02:50.960 --> 0:02:54.280
<v Speaker 3>cleared in almost every jurisdiction in which it filed except

0:02:54.400 --> 0:02:56.920
<v Speaker 3>so far the UK. In US, I believe there are

0:02:56.919 --> 0:02:59.560
<v Speaker 3>two pending that we haven't heard from Australia and New

0:02:59.639 --> 0:03:02.519
<v Speaker 3>Zealand where clearance is expected. So really we're just looking

0:03:02.600 --> 0:03:06.160
<v Speaker 3>at UK and US. So the UK Competition and Markets Authority,

0:03:06.240 --> 0:03:09.640
<v Speaker 3>after a long investigation, decided basically to block the deal.

0:03:10.320 --> 0:03:12.320
<v Speaker 3>They have a lot more power to do that at

0:03:12.320 --> 0:03:15.000
<v Speaker 3>that level than the Federal Trade Commission in the US does.

0:03:15.320 --> 0:03:17.560
<v Speaker 3>The CMA in the UK doesn't have to go to

0:03:17.639 --> 0:03:20.040
<v Speaker 3>a judge and ask a judge for that block. They

0:03:20.040 --> 0:03:23.360
<v Speaker 3>can issue that block themselves, which they've done, and Microsoft

0:03:23.400 --> 0:03:25.640
<v Speaker 3>is basically now in the middle of an appeal. That

0:03:25.720 --> 0:03:28.240
<v Speaker 3>appeal will be very difficult because the standards are very

0:03:28.280 --> 0:03:31.120
<v Speaker 3>high to overturn a CMA decision. It doesn't mean they

0:03:31.160 --> 0:03:34.120
<v Speaker 3>don't have a chance. They certainly do have a chance,

0:03:34.160 --> 0:03:36.040
<v Speaker 3>but it could take some time and they're in the

0:03:36.040 --> 0:03:38.960
<v Speaker 3>middle of that process. What we have lately heard in

0:03:39.000 --> 0:03:43.040
<v Speaker 3>the news, though, is the rumblings of the concept of

0:03:43.120 --> 0:03:48.000
<v Speaker 3>closing the deal anyway despite that outstanding the UK activity now.

0:03:48.040 --> 0:03:50.720
<v Speaker 3>That could mean closing it and then just continuing to

0:03:50.760 --> 0:03:53.800
<v Speaker 3>litigate in the UK and dealing with any sanctions that

0:03:53.920 --> 0:03:56.760
<v Speaker 3>might come, or it could mean pulling business out of

0:03:56.800 --> 0:03:59.400
<v Speaker 3>the UK and closing it could mean many different things.

0:04:00.040 --> 0:04:02.880
<v Speaker 3>It's not clear that's what Microsoft is talking internally to

0:04:02.960 --> 0:04:06.240
<v Speaker 3>its attorneys about now, but I think that's what prompted

0:04:06.280 --> 0:04:09.080
<v Speaker 3>the FTC to file the suit in California because they

0:04:09.080 --> 0:04:11.920
<v Speaker 3>were concerned about this news. They're hearing that Microsoft might

0:04:11.920 --> 0:04:14.360
<v Speaker 3>go ahead and close the deal. They want to protect

0:04:14.400 --> 0:04:17.560
<v Speaker 3>their internal process, which as I said, probably won't complete

0:04:17.600 --> 0:04:20.920
<v Speaker 3>until early one Q. They want that process to complete

0:04:21.000 --> 0:04:24.400
<v Speaker 3>before the parties have consummated the deal and integrated the businesses.

0:04:24.680 --> 0:04:27.440
<v Speaker 3>So that's why they went into the federal court to say, hey,

0:04:27.640 --> 0:04:30.040
<v Speaker 3>give us a really quick, just temporary block on this

0:04:30.120 --> 0:04:31.920
<v Speaker 3>deal so we can get our process done.

0:04:32.480 --> 0:04:35.760
<v Speaker 1>If the US and the UK both shoot down the deal,

0:04:36.640 --> 0:04:40.039
<v Speaker 1>can it still work outside of these two jurisdictions or

0:04:40.080 --> 0:04:42.080
<v Speaker 1>at that point is it kind of not worth it?

0:04:42.240 --> 0:04:44.120
<v Speaker 3>I think at that point it's probably done. I mean,

0:04:44.120 --> 0:04:47.400
<v Speaker 3>you're talking about two really big economies, especially for gaming.

0:04:47.920 --> 0:04:49.800
<v Speaker 3>I don't think it would make sense for the companies

0:04:49.839 --> 0:04:52.839
<v Speaker 3>to deal with the sanctions that might come if they

0:04:52.880 --> 0:04:55.719
<v Speaker 3>went ahead and closed or try to pull the businesses

0:04:55.720 --> 0:04:57.760
<v Speaker 3>out of both the US and the UK. So I

0:04:57.760 --> 0:04:59.400
<v Speaker 3>think that would be the end of the deal.

0:05:00.000 --> 0:05:02.159
<v Speaker 1>So in terms of where we're at now, if we're

0:05:02.440 --> 0:05:05.599
<v Speaker 1>driving the car, Microsoft is driving the car, we're running

0:05:05.600 --> 0:05:07.880
<v Speaker 1>out of gas, Like how much gas is left in

0:05:07.920 --> 0:05:09.520
<v Speaker 1>the tank for this fight for them?

0:05:09.800 --> 0:05:12.440
<v Speaker 3>Not that much? I think, not very much. I mean,

0:05:12.520 --> 0:05:16.040
<v Speaker 3>first issue is a deal end date in July. That's

0:05:16.120 --> 0:05:19.839
<v Speaker 3>July eighteenth, and so at that point, Activision could choose

0:05:19.880 --> 0:05:21.920
<v Speaker 3>to walk away and take a breakup fee. I believe

0:05:21.960 --> 0:05:25.680
<v Speaker 3>it's about about three billion dollars. Microsoft would have to

0:05:25.720 --> 0:05:28.640
<v Speaker 3>do something to sweeten the pot essentially to make them

0:05:28.680 --> 0:05:31.320
<v Speaker 3>stay to extend that date if they can't get cleared

0:05:31.360 --> 0:05:34.240
<v Speaker 3>and actually close the deal by that time. So you

0:05:34.360 --> 0:05:38.080
<v Speaker 3>have that kind of looming over everything, and of course

0:05:38.120 --> 0:05:40.360
<v Speaker 3>Activision will play it close to the beast test of

0:05:40.760 --> 0:05:43.000
<v Speaker 3>how they are thinking about that and what their strategy

0:05:43.080 --> 0:05:45.560
<v Speaker 3>might be, you know. And then you also just have

0:05:45.640 --> 0:05:48.800
<v Speaker 3>these tough fights. The FTC could appeal if it loses

0:05:48.839 --> 0:05:52.360
<v Speaker 3>this preliminary junction, It could appeal. If it does appeal,

0:05:52.440 --> 0:05:54.920
<v Speaker 3>it would seek an emergency order to once again keep

0:05:54.920 --> 0:05:57.640
<v Speaker 3>the companies from closing pending the appeal. You know, I

0:05:57.640 --> 0:06:00.440
<v Speaker 3>think it's unlikely would win something like that. There's still

0:06:00.440 --> 0:06:03.400
<v Speaker 3>a lot of fight left for the companies to defend here,

0:06:03.680 --> 0:06:06.320
<v Speaker 3>you know, even if they're successful in this preliminary injunction

0:06:06.440 --> 0:06:08.359
<v Speaker 3>hearing in court in California.

0:06:08.440 --> 0:06:12.000
<v Speaker 1>But obviously Microsoft has made the decision that it's totally

0:06:12.040 --> 0:06:15.919
<v Speaker 1>worth the fight. At what point when we put on

0:06:15.920 --> 0:06:18.440
<v Speaker 1>our Bloomberg intelligence hats that you put on every day

0:06:18.440 --> 0:06:20.520
<v Speaker 1>at what point is it, like, guys, this is just

0:06:20.560 --> 0:06:23.920
<v Speaker 1>not worth the money, the resources to keep fighting for this.

0:06:24.760 --> 0:06:25.719
<v Speaker 2>You know they really are.

0:06:25.839 --> 0:06:28.800
<v Speaker 3>I think probably this US process will be the one

0:06:28.839 --> 0:06:32.440
<v Speaker 3>that basically is the deciding point here for the companies.

0:06:32.560 --> 0:06:35.159
<v Speaker 3>You know, if they win this preliminary injunction, I see

0:06:35.160 --> 0:06:38.320
<v Speaker 3>them forging ahead. If they don't win this preliminary injunction,

0:06:38.360 --> 0:06:40.000
<v Speaker 3>I think at that point is when they really have

0:06:40.080 --> 0:06:43.479
<v Speaker 3>to reevaluate is it worth it to have two appeals pending,

0:06:43.960 --> 0:06:46.120
<v Speaker 3>both of which might be difficult in the US and

0:06:46.240 --> 0:06:48.479
<v Speaker 3>the UK to try to get this deal closed. It

0:06:48.560 --> 0:06:51.320
<v Speaker 3>starts to get very expensive and very lengthy at that point.

0:06:51.360 --> 0:06:54.080
<v Speaker 3>So I think that this is a very important step,

0:06:55.000 --> 0:06:57.880
<v Speaker 3>the court process that's just been started in California.

0:06:57.920 --> 0:07:00.320
<v Speaker 1>And what does it tell us about the ft see

0:07:00.360 --> 0:07:03.240
<v Speaker 1>if anything that we didn't already know. Was it surprising

0:07:03.240 --> 0:07:05.480
<v Speaker 1>to you at all to get this move from the FTC?

0:07:06.240 --> 0:07:11.680
<v Speaker 3>I was surprised because it looks like it's more serious.

0:07:12.240 --> 0:07:14.600
<v Speaker 3>It looks like the companies were considering closing over the

0:07:14.680 --> 0:07:18.640
<v Speaker 3>UK more seriously than I thought. I believed the companies

0:07:18.680 --> 0:07:21.840
<v Speaker 3>would probably work through the appeal and not try to

0:07:21.840 --> 0:07:23.920
<v Speaker 3>figure out a way to go ahead. And close with

0:07:24.000 --> 0:07:27.360
<v Speaker 3>this UK objection standing out there. But obviously, you know,

0:07:27.400 --> 0:07:29.960
<v Speaker 3>the FTC talks to these parties and is aware of

0:07:30.400 --> 0:07:33.960
<v Speaker 3>confidential information that I am not. Obviously, they were very

0:07:34.000 --> 0:07:35.880
<v Speaker 3>concerned that the companies were going to do this, so

0:07:36.640 --> 0:07:38.800
<v Speaker 3>that's why they filed this. If they didn't believe they

0:07:38.800 --> 0:07:40.360
<v Speaker 3>were going to go ahead and close, they wouldn't have

0:07:40.400 --> 0:07:42.920
<v Speaker 3>filed this. So that was surprising to me because it

0:07:42.960 --> 0:07:44.920
<v Speaker 3>meant there was more seriousness than I thought to this

0:07:45.040 --> 0:07:48.480
<v Speaker 3>talk about going ahead and closing, you know, And I

0:07:48.520 --> 0:07:50.640
<v Speaker 3>think I think that's the main thing, the fact that

0:07:50.680 --> 0:07:52.880
<v Speaker 3>they actually filed they were eventually going to have to

0:07:52.920 --> 0:07:55.720
<v Speaker 3>do it one way or another, because once the companies

0:07:55.760 --> 0:07:58.280
<v Speaker 3>were free to close, let's say they won the UK

0:07:58.400 --> 0:08:01.760
<v Speaker 3>appeal or made it very clear that they're going to

0:08:01.760 --> 0:08:04.080
<v Speaker 3>close over the UK peel, the FTC had to protect

0:08:04.080 --> 0:08:07.040
<v Speaker 3>its process by getting trying to get a federal court order.

0:08:07.240 --> 0:08:10.400
<v Speaker 1>Yeah, if you had the opportunity to have an interview

0:08:10.480 --> 0:08:14.000
<v Speaker 1>with you know, all of your favorite FTC officials, what

0:08:14.120 --> 0:08:15.840
<v Speaker 1>is the one question you would want to know from

0:08:15.920 --> 0:08:18.239
<v Speaker 1>them to give you more insight into the deal?

0:08:19.360 --> 0:08:23.720
<v Speaker 3>Well, I think I wanted exactly what those confidential discussions

0:08:23.760 --> 0:08:27.640
<v Speaker 3>have been about what Microsoft's plans are here in terms of,

0:08:28.640 --> 0:08:30.280
<v Speaker 3>you know, whether they're going to forge ahead with this

0:08:30.440 --> 0:08:33.960
<v Speaker 3>despite the UK objections or not. I mean, really, that's

0:08:34.080 --> 0:08:37.840
<v Speaker 3>a surprising thing. It's not something I've ever witnessed interesting

0:08:38.080 --> 0:08:40.360
<v Speaker 3>and I almost really hope they do it, just because

0:08:40.360 --> 0:08:42.520
<v Speaker 3>I'd like to see how it all plays out. You know,

0:08:42.559 --> 0:08:44.400
<v Speaker 3>it would be very interesting. So I think that would

0:08:44.440 --> 0:08:45.960
<v Speaker 3>be one thing I'd like to know.

0:08:46.080 --> 0:08:47.520
<v Speaker 1>And that would be bad news for a lot of

0:08:47.559 --> 0:08:49.800
<v Speaker 1>other deals, I would imagine, right, kind of does it

0:08:49.840 --> 0:08:52.800
<v Speaker 1>set a precedent for other deals or is it a

0:08:52.880 --> 0:08:53.920
<v Speaker 1>siloed decision?

0:08:54.040 --> 0:08:56.720
<v Speaker 3>You know, I think it's very siloed, because every deal

0:08:56.760 --> 0:08:58.839
<v Speaker 3>really rests on its own facts. But I think what

0:08:58.880 --> 0:09:01.360
<v Speaker 3>it does, it would better to see what happens in

0:09:01.360 --> 0:09:05.280
<v Speaker 3>the UK and how they react, right, because it might, yes,

0:09:05.400 --> 0:09:08.760
<v Speaker 3>it might open. It might give other companies ideas about this.

0:09:09.120 --> 0:09:12.520
<v Speaker 3>See the UK having this really big role in global

0:09:12.520 --> 0:09:15.080
<v Speaker 3>mergers is a very new thing. It's only a post

0:09:15.160 --> 0:09:19.000
<v Speaker 3>Brexit matter, right, because before Brexit, most deals and there

0:09:19.000 --> 0:09:21.440
<v Speaker 3>were deals that just triggered in the UK and got

0:09:21.520 --> 0:09:24.640
<v Speaker 3>UK review. They have done this before, but most big

0:09:24.679 --> 0:09:28.720
<v Speaker 3>global deals just triggered into the European Commission and UK

0:09:28.960 --> 0:09:31.720
<v Speaker 3>was part of that, right, So this is new that

0:09:31.800 --> 0:09:35.520
<v Speaker 3>this regulator has this new role where they could actually

0:09:35.600 --> 0:09:36.640
<v Speaker 3>block a global deal.

0:09:37.200 --> 0:09:40.800
<v Speaker 1>Well, it's so interesting to watch and like you said,

0:09:40.800 --> 0:09:43.360
<v Speaker 1>so many moving parts. So we are very lucky to

0:09:43.400 --> 0:09:45.400
<v Speaker 1>have you with us to break it all down again

0:09:45.440 --> 0:09:49.120
<v Speaker 1>talking about the Microsoft and Activision deal here with Bloomberg

0:09:49.120 --> 0:09:51.760
<v Speaker 1>Intelligence senior antitrust analyst Jennifer Ree.

0:09:51.920 --> 0:09:53.960
<v Speaker 2>Stick with us here on Bloomberg Law. We've got more

0:09:53.960 --> 0:09:56.439
<v Speaker 2>coverage ahead. This is Bloomberg.

0:10:03.679 --> 0:10:08.480
<v Speaker 1>This is Bloomberg Law with June Grasso from Bloomberg Radio.

0:10:10.280 --> 0:10:12.920
<v Speaker 1>I'm Madison Mills in for June Grasso this week on

0:10:13.040 --> 0:10:16.960
<v Speaker 1>Bloomberg Law. As we've been discussing this anti trust situation

0:10:17.160 --> 0:10:20.199
<v Speaker 1>Microsoft and Activision, we got to talk about the status

0:10:20.559 --> 0:10:23.600
<v Speaker 1>of anti trust battles for the FTC and here to

0:10:23.600 --> 0:10:24.520
<v Speaker 1>discuss that with us.

0:10:24.600 --> 0:10:27.360
<v Speaker 2>Is it Bloomberg Opinions. Ed Hammond ed great.

0:10:27.120 --> 0:10:29.200
<v Speaker 1>To speak with you, Thank you for having me, Thanks

0:10:29.200 --> 0:10:32.080
<v Speaker 1>for coming on. What do we need to know about

0:10:32.160 --> 0:10:36.000
<v Speaker 1>the current FDC and Department of Justice and how they're

0:10:36.160 --> 0:10:38.679
<v Speaker 1>a little different than previous reigns.

0:10:39.240 --> 0:10:42.560
<v Speaker 4>Yeah, a lot different. I would say that the hyper

0:10:42.559 --> 0:10:46.800
<v Speaker 4>aggressive to be clear, they've said that that's what they

0:10:46.800 --> 0:10:49.200
<v Speaker 4>would be like from pretty early on. And indeed, in

0:10:49.240 --> 0:10:52.480
<v Speaker 4>Lena Kahan's case, the Commissioner of the FTC, before she

0:10:52.600 --> 0:10:54.840
<v Speaker 4>even took on the role, she had sort of outlined

0:10:54.880 --> 0:10:58.520
<v Speaker 4>her philosophy, which was sort of you could think of

0:10:58.559 --> 0:11:01.320
<v Speaker 4>it as being anti scale. She thinks big is bad

0:11:02.520 --> 0:11:05.880
<v Speaker 4>pretty much regardless, and particularly where it involves technology companies.

0:11:06.920 --> 0:11:09.320
<v Speaker 4>So they've been you know, both the DOJ and the

0:11:09.360 --> 0:11:11.680
<v Speaker 4>FTC have been incredibly aggressive when it comes to M

0:11:11.679 --> 0:11:15.640
<v Speaker 4>and A and have litigated much more heavily against deals

0:11:15.679 --> 0:11:19.800
<v Speaker 4>and previous administrations have. And we're beginning to sort of

0:11:20.080 --> 0:11:22.679
<v Speaker 4>reach a point now where some of those you know,

0:11:23.120 --> 0:11:26.280
<v Speaker 4>litigations they're bringing a, they're failing, they're losing in court,

0:11:26.520 --> 0:11:29.079
<v Speaker 4>and companies are beginning to get in bold and I

0:11:29.120 --> 0:11:30.959
<v Speaker 4>think and push back against it.

0:11:31.800 --> 0:11:34.480
<v Speaker 1>So that's interesting and I want to ask you about that.

0:11:34.679 --> 0:11:37.400
<v Speaker 1>But what do you have to do to get a

0:11:37.440 --> 0:11:39.880
<v Speaker 1>deal done under this FTC?

0:11:41.200 --> 0:11:44.400
<v Speaker 4>You have to be patient, I think is probably the key. Obviously,

0:11:44.440 --> 0:11:48.160
<v Speaker 4>any litigation around M and A it prolongs the process.

0:11:48.240 --> 0:11:49.640
<v Speaker 4>So really what you need to do if you're the

0:11:49.679 --> 0:11:52.960
<v Speaker 4>acquirer coming in, you need to be mindful of the

0:11:52.960 --> 0:11:55.600
<v Speaker 4>fact it's going to take longer than would potentially be

0:11:55.640 --> 0:11:59.760
<v Speaker 4>the case under less stringent regulatory environments, and you have

0:11:59.800 --> 0:12:01.800
<v Speaker 4>to go vince sella that that's in their best interest

0:12:01.840 --> 0:12:05.160
<v Speaker 4>as well. Obviously as a company on the cell side,

0:12:05.440 --> 0:12:07.440
<v Speaker 4>you know, you want the deal to happen as quickly

0:12:07.559 --> 0:12:11.439
<v Speaker 4>and as with the little friction as possible. And if

0:12:11.480 --> 0:12:13.560
<v Speaker 4>you're saying to someone selling the company, look, you might

0:12:13.600 --> 0:12:16.280
<v Speaker 4>be waiting two years, there's a lot that can happen

0:12:16.320 --> 0:12:18.360
<v Speaker 4>in that period. Obviously that's a difficult decision for a

0:12:18.400 --> 0:12:20.000
<v Speaker 4>sell side company to make. So I think really it's

0:12:20.000 --> 0:12:23.040
<v Speaker 4>about like both sides being very committed to it, saying

0:12:23.040 --> 0:12:25.080
<v Speaker 4>they're going to fight whatever they need to fight to

0:12:25.080 --> 0:12:27.440
<v Speaker 4>get it done, and that they are willing for the

0:12:27.720 --> 0:12:29.240
<v Speaker 4>you know, durational aspect of.

0:12:29.200 --> 0:12:29.760
<v Speaker 1>It to play out.

0:12:30.040 --> 0:12:32.680
<v Speaker 2>And how much power do the companies have here?

0:12:34.440 --> 0:12:38.160
<v Speaker 4>I think increasingly the companies and you know, the advisors

0:12:38.679 --> 0:12:40.320
<v Speaker 4>that I speak to who work with a lot of

0:12:40.320 --> 0:12:43.360
<v Speaker 4>these companies are of the mind that they have more

0:12:43.440 --> 0:12:45.720
<v Speaker 4>power than they perhaps at first thought. I think some

0:12:45.760 --> 0:12:49.280
<v Speaker 4>of the FTC's cases have been fairly weak on the

0:12:49.320 --> 0:12:51.840
<v Speaker 4>face of it, and obviously as they go through the

0:12:51.840 --> 0:12:56.760
<v Speaker 4>courts that's being proven out, and particularly you know, at

0:12:56.760 --> 0:12:58.240
<v Speaker 4>the moment they seem to be getting in front of

0:12:58.280 --> 0:13:00.360
<v Speaker 4>judges who are not necessarily very favorable to their way

0:13:00.360 --> 0:13:04.720
<v Speaker 4>of thinking. And I think that's given companies the view that, look, yes,

0:13:04.840 --> 0:13:08.840
<v Speaker 4>the regulator environment creates hurdles, but the hurdables are hurdles sorry,

0:13:08.880 --> 0:13:12.120
<v Speaker 4>that are surmountable. And that wasn't usually the case. Traditionally

0:13:12.520 --> 0:13:15.199
<v Speaker 4>the viewers that if the FTC or DOJ came out

0:13:15.240 --> 0:13:18.600
<v Speaker 4>against your deal, the deal probably died. You probably said, well,

0:13:18.640 --> 0:13:20.520
<v Speaker 4>you know what, even if we have a shot at

0:13:20.520 --> 0:13:24.640
<v Speaker 4>winning this in court, it's you know, it's ultimately it's

0:13:24.640 --> 0:13:26.960
<v Speaker 4>probably going to break up. Now I think companies are

0:13:26.960 --> 0:13:29.280
<v Speaker 4>thinking about this bit differently and saying, you know, if

0:13:29.280 --> 0:13:31.120
<v Speaker 4>we want to do this deal, we're going into it

0:13:31.160 --> 0:13:32.880
<v Speaker 4>with the expectation that we're going to have to fight,

0:13:33.200 --> 0:13:36.360
<v Speaker 4>and so that being baked into the assumptions about why

0:13:36.400 --> 0:13:39.000
<v Speaker 4>they're going to do the deal, they're much more willing

0:13:39.000 --> 0:13:40.560
<v Speaker 4>to go through the whole process with the FTC.

0:13:41.080 --> 0:13:45.080
<v Speaker 1>Does it make the bar higher or harder for deals

0:13:45.520 --> 0:13:46.120
<v Speaker 1>because of that?

0:13:47.240 --> 0:13:51.080
<v Speaker 4>It should do. It should mean that, you know, deals

0:13:51.480 --> 0:13:53.440
<v Speaker 4>that sort of don't make any sense and that would

0:13:53.440 --> 0:13:57.920
<v Speaker 4>probably get litigated against in any regulator environment are less

0:13:58.040 --> 0:14:02.200
<v Speaker 4>likely to happen. But I think, you know, we've seen

0:14:02.200 --> 0:14:04.560
<v Speaker 4>a real chilling effect on deals obviously that the reason

0:14:04.640 --> 0:14:06.680
<v Speaker 4>they've done this has been, you know, very aggressive against

0:14:06.720 --> 0:14:08.160
<v Speaker 4>deeals is because they do want to have a chilling

0:14:08.160 --> 0:14:09.640
<v Speaker 4>effect on M and A. They want to slow down

0:14:09.760 --> 0:14:12.280
<v Speaker 4>M and A. And it's worked so far. There has

0:14:12.320 --> 0:14:14.240
<v Speaker 4>been like a significant drop off in the number of

0:14:14.240 --> 0:14:17.080
<v Speaker 4>deals being announced, but I think that could flip back,

0:14:17.760 --> 0:14:20.560
<v Speaker 4>particularly if we get later into the Biden administration, in

0:14:20.680 --> 0:14:23.240
<v Speaker 4>terms of companies being in bold and as I say,

0:14:23.320 --> 0:14:24.840
<v Speaker 4>try and push through some of these things.

0:14:24.960 --> 0:14:26.920
<v Speaker 1>Yeah, all right, well, Ed Hammond, thank you so much

0:14:26.960 --> 0:14:29.640
<v Speaker 1>for joining us. Really appreciate it. You can read Ed's

0:14:29.640 --> 0:14:32.720
<v Speaker 1>story of course on the terminal FTC surrenders its best

0:14:32.760 --> 0:14:34.160
<v Speaker 1>weapon in anti trust battle.

0:14:34.400 --> 0:14:35.600
<v Speaker 2>That's from Bloomberg.

0:14:35.160 --> 0:14:38.360
<v Speaker 1>Opinions, Ed Hammond, continue and follow us here on Bloomberg

0:14:38.480 --> 0:14:40.600
<v Speaker 1>Law for all of the legal news you need throughout

0:14:40.640 --> 0:14:43.280
<v Speaker 1>the week. I'm Madison Mills in for June Graso, and

0:14:43.320 --> 0:14:44.520
<v Speaker 1>this is Bloomberg