US to revamp M&A code in blow to firms

City A.M. Reporter
US ANTITRUST authorities are revamping guidelines on company mergers and takeovers in a bid to encourage greater&nbsp; competition, potentially causing a headache for firms looking to tie the knot. <br /><br />The 17-year old guidelines are to be overhauled amid expectations that the Obama administration will give corporate combinations a tougher review.<br /><br />Federal Trade Commission Chairman Jon Leibowitz said: &ldquo;The 1992 guidelines explicitly stated that they would be revised from time to time. We think the time has come to do that.&rdquo;<br /><br />The FTC and Justice Department share the job of ensuring that mergers do not violate antitrust law.<br /><br />The corporate community has been bracing for the Obama administration to be tougher than its Republican predecessor in assessing mergers and the actions of companies that dominate their markets.<br /><br />Leibowitz said that as they currently stand, the merger guidelines &ldquo;clearly exaggerate the extent to which the agencies follow a single, rigid, step-by-step approach in merger analysis&rdquo;.<br /><br />&ldquo;We are announcing the guidelines project now, but do not have a draft, let alone anything to release at this point,&rdquo; he said. &ldquo;On the contrary, we are soliciting comments.&rdquo;<br /><br />Christine Varney, assistant attorney general in charge of the department&rsquo;s Antitrust Division, said that having clearer guidelines would give businesses more clarity when making merger decisions, which would ultimately benefit customers. <br /><br />The move to revamp the guidelines, which were adopted in 1968 and revised in 1982 and 1992, comes as tentative signs emerge that the mergers and acquisitions market is recovering.&nbsp; <br /><br />In the three months from June to August, global M&amp;A rose 29 per cent compared to the preceding three months.