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August 01, 2019
The London Stock Exchange and Refinitiv will have to convince numerous authorities to allow their $27 billion tie-up, and although the agreement might not present significant antitrust issues, there are other potential hurdles that could trip the transaction up, including concerns related to the merged entity's vast trove of financial data. Joel Mitnick comments.
Excerpts from "Data Could Be Achilles Heel For $27B LSE-Refinitiv Deal," Law360, August 1, 2019:
Questions like whether the deal would affect prices for financial data are issues regulators could look at closely, especially since they are not likely to put too much consideration into whether the transaction might stifle competition in the overall stock exchange market.
"Because LSE and Refinitiv are not competitors, the focus of any inquiry likely would be on potential exclusionary conduct aimed at some class of customer, or on pricing power that results from the combination," said Joel Mitnick, a partner at Cadwalader Wickersham & Taft LLP and former Federal Trade Commission trial attorney. "On the face of the deal, I do not see any obvious exclusionary practices or pricing power issues."
Provided the companies succeed at assuaging any of those concerns, they'll still have to contend with potential questions about the merged entity's minority investors and shareholders.
"Although not a traditional antitrust issue, the antitrust authorities, specifically the FTC, have shown an interest in the past year in looking at the intersection of stock acquisitions and industry structural issues," Mitnick said. "So the conflicts and incentives of the minority investors and board members could draw more scrutiny than would have occurred in the past. In fact, this proposed transaction could be an interesting vehicle for looking at some of these nontraditional lines of inquiry."
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