A merger that was blocked or challenged by the Biden administration in 2024
CAZ Chief Investment Officer Christopher Zook analyzes the number of mergers and acquisitions taking place under Biden versus Trump.
The Biden-Harris administration has taken an aggressive stance in scrutinizing proposed mergers and acquisitions in recent years, resulting in several deals being blocked or put on hold due to regulatory action.
The Federal Trade Commission (FTC) and the antitrust division of the Department of Justice (DOJ) are the primary regulatory bodies responsible for reviewing mergers and challenging them in court if there are concerns about the impact on competition.
The two organizations have challenged several high-profile mergers in recent years, several of which were blocked by the courts or abandoned by the companies involved in 2024.
FTC Chairwoman Lina Khan said in a November interview with the Council on Foreign Relations that the increased scrutiny of mergers means that “the potential risk of antitrust is part of the conversation on day one,” adding, “As a rule, I want people to think that their deal is going to break the law or it’s going to break the law so that it’s progress.”
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Federal Trade Commission Chairwoman Lina Khan led the administration’s efforts to challenge the merger on competition grounds. (Drew Anger/Getty/Getty Images)
Here’s a look at some of the mergers blocked, abandoned or suspended in 2024 amid federal antitrust scrutiny.
Albertsons and Kroger
The FTC and state regulatory authorities prevailed this month in lawsuits brought against the proposed $25 billion merger between Albertsons and Kroger, which would have been the largest merger in the grocery industry.
The two companies expressed disappointment that the courts rejected their proposed merger following the ruling. Albertsons and Kroger had planned to close more than 500 stores at C&S Wholesale Grocers to address concerns about the impact on competition in the grocery industry.
Albertsons terminated the merger agreement following these decisions. It also filed a lawsuit alleging that Kroger breached the merger agreement by not holding certain assets, failing to respond to regulators, rejecting strong divestiture buyers and not cooperating with Albertsons. A Kroger spokesperson dismissed the allegations, telling the Wall Street Journal that Albertsons is taking the blame for the merger failure and that it is in breach of the merger agreement.
Kroger and Albertsons ended their merger following the court rulings. (Kroger: Charles Bertram/Lexington Herald-Leader/Tribune News Service via Getty Images | Albertsons: Shelby Tauber/Bloomberg via Getty Images / Getty Images)
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Capri and Tapestry
Luxury fashion companies Capri and Tapestry ended their merger in November 2024 after a judge ruled in late October that their tie-up would undermine competition in the luxury handbags and accessories space.
This decision rejected the argument made by the companies that the bags are unimportant goods that do not match the price of the consumers’ preferences, as the judge wrote that it “ignores that bags are important for many women, not only to express their feelings in fashion but to help their daily life.”
Had the merger gone ahead, it would have included Tapestry’s brands Coach, Kate Spade and Stuart Weitzman and Capri’s Versace, Jimmy Choo and Michael Kors.
Versace was among the luxury brands that could have merged if the Capri and Tapestry merger had gone ahead. (Photo by Scott Olson/Getty Images / Getty Images)
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JetBlue and Spirit
JetBlue and Spirit terminated their merger in March 2024 after deciding it was the “best way forward” when it became clear that the two airlines were unlikely to receive legal and regulatory approvals by the July 2024 deadline for the deal to be completed.
The two companies saw the merger as a way to create a low-cost competitor to the so-called Big Four airlines – American, United, Delta and Southwest.
A federal judge in January blocked a proposed merger between JetBlue and Spirit after agreeing with the Justice Department that the deal would hurt the availability of low-cost airline tickets.
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JetBlue and Spirit have abandoned their planned merger amid regulatory scrutiny. (Photo by Joe Raedle/Getty Images / Getty Images)
Tempur Sealy and Mattress Firm
Tempur Sealy and Mattress Firm have proposed a $4 billion deal in May 2023 that would see the mattress supplier acquire the retailer, although the deal is currently in legal jeopardy.
The FTC voted bipartisan 5-0 in July to block a merger that would combine the world’s largest supplier of mattresses with its largest retailer over concerns about the impact on competition in the industry and on prices facing consumers.
Tempur Sealy and Mattress Firm have argued that the bedding industry is “highly competitive” as consumers can choose from “a wide selection of products, brands, price points, and shopping channels.”
Closing arguments in the federal court case were held in mid-December, although a decision has yet to be announced.
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UnitedHealth Group and Amedisys
The DOJ filed a lawsuit in November to block UnitedHealth Group’s proposed $3.3 billion purchase of Amedisys, a home health company that provides hospice services.
The agency says the deal will eliminate competition in the home health and hospice industry, hurting patients, insurance companies and nurses in the process. Attorney General Merrick Garland said in announcing the lawsuit that the agency wanted to “check illegal mergers and acquisitions” in the health care industry.
Optum, a subsidiary of UnitedHealth Group, argues on a website supporting the deal that there is a high level of competition in the home health and hospice industry and that the merger will enhance competition, rather than undermine it.
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