The Justice Department on Thursday unveiled an updated manual for how it deals with mergers that may be anti-competitive, including how it will look at private equity firms.
Last updated in 2011, the latest "Merger Remedies Manual" now includes a section on how Justice Department antitrust experts will evaluate private equity firms and other "divestiture buyers" of businesses that companies have to sell in order to avoid raising antitrust concerns.
Drew Maloney, president and CEO of private equity advocacy group American Investment Council, said in an interview that the addition of private equity in the DOJ merger manual "demonstrates that private equity can play a positive role in the divestiture process. It was encouraging to us to see that they mentioned it."
Designed to reflect changes in the merger landscape over the last decade, the latest manual includes new sections explaining the approach that DOJ's antitrust division takes with consummated transactions and upfront buyers. It also outlines red flags that division officials see as increasing the risk that a remedy will not preserve competition effectively. DOJ must approve proposed buyers of divested assets under three fundamental tests outlined in the manual.
Assistant Attorney General Makan Delrahim of the Department of Justice's antitrust division said in a statement that the updated manual "reflects our renewed focus on enforcing obligations in consent decrees and reaffirms the division's commitment to effective structural relief." It will also provide greater transparency to how the division approaches possible remedies, he said, with a preference for structural remedies such as divestiture as opposed to dictating how companies conduct business going forward.