Chemical Merger Strategy Burns FTC

February 06, 2020

Joel Mitnick comments on a D.C. federal judge's ruling that the FTC hadn’t justified its request for a preliminary injunction temporarily blocking Evonik's planned $625 million purchase of fellow hydrogen peroxide producer PeroxyChem.

Excerpts from "Chemical Merger Strategy Burns FTC," Law360, February 6, 2020: 

The commission’s failure, the D.C. federal judge said, rested in the agency’s market definition, which relied not on the demand side of customers as is typical in merger cases, but instead on the supply side of the hydrogen peroxide producers involved and their peers.

“I think what this case really represents is a failure of the agency lawyers to make the transition from the kinds of arguments that you kick around with the parties in deciding whether to challenge and what you have to do to win a case in court,” said Joel Mitnick, a partner at Cadwalader Wickersham & Taft LLP and a former FTC trial attorney. 

Judges, Mitnick noted, prefer arguments deeply rooted in precedent, rather than an approach like swinging, which appears predominantly in economic literature rather than case law. Here, Judge Kelly referred to the attempted swinging market definition as “a substantial departure from the typical way in which a product market is defined.”

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