Historically, the FTC and DOJ have sought to unwind consummated mergers that are deemed to be anticompetitive. During Trump’s first year in office, the FTC and DOJ have demonstrated their willingness to unwind anticompetitive mergers that somehow sneaked by the regulators.
FTC Seeks to Unwind Merger of Prosthetic Knee Manufacturers
On December 20, 2017, the FTC filed an administrative complaint to unwind the merger of Otto Bock HealthCare North America, Inc., (“Otto Bock”) and FIH Group Holdings, LLC (“Freedom”), two manufacturers of prosthetic knees equipped with microprocessors that adapt the joint to surface conditions and walking rhythm. In September 2017, the parties simultaneously signed a merger agreement and consummated the merger without the FTC having an opportunity to review the deal. Apparently, the merger was not HSR reportable. According to the FTC, the merger eliminated direct and substantial competition between head to head competitors that engaged in intense price and innovation competition. While the litigation is ongoing, the parties agreed to a Hold Separate and Asset Maintenance Agreement, which prevents them from continuing the integration of the two businesses. The FTC did not allege any violation of the HSR ACT.