Bank Mergers and Acquisitions Handbook
The Bank Merger and Acquisitions Handbook is a how-to manual for lawyers who must analyze a potential transaction or who are faced with an agency review of the competitive effects of a proposed transaction that would combine banking institutions. Its focus is practical; complementing the Antitrust Section's other publications on merger review including Mergers and Acquisitions, and the Premerger Notification Practice Manual. This book addresses those aspects of bank merger review that are...
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The Bank Merger and Acquisitions Handbook is a how-to manual for lawyers who must analyze a potential transaction or who are faced with an agency review of the competitive effects of a proposed transaction that would combine banking institutions. Its focus is practical; complementing the Antitrust Section's other publications on merger review including Mergers and Acquisitions, and the Premerger Notification Practice Manual. This book addresses those aspects of bank merger review that are unique to banking institutions - such as the statutory framework, banking agency review, and Justice Department standards - and draws on learning from recent transactions in which one or more of the reviewing agencies raised concerns. It should be helpful to both antitrust lawyers and banking lawyers faced with a bank merger and to banking lawyers faced with a transaction that presents substantive competition issues.
Foreword viiPreface ixIntroduction 1General Antitrust Principles in Financial Institution Mergers and Acquisitions 5Antitrust Laws Affecting Financial Institution Mergers and Acquisitions 5The Sherman Antitrust Act and the Clayton Act 5Financial Institution-Specific Statutes 6Hart-Scott-Rodino Act 8Competitive Review$dFederal Bank Regulatory Agencies 9The Merger Guidelines 12State Attorneys General 13Timing Considerations and Notification Procedures 15Statutory and Regulatory Processing Periods 15BHC Act Applications and Notices 15Standard Procedures Relating to Banking Operations 15Streamlined Procedures Relating to Banking Operations 17Post-Approval Waiting Period under the BHC Act 19Control Act Notices 19BMA Notices 20Non-Bank Operations and the HSR Act 21Standard 4(c)(8) Procedures 23Streamlined 4(c)(8) Procedures 24HSR Act Waiting Periods 25Choosing between 4(c)(8) and HSR 26Practical Considerations withRespect to Timing 27Pre-filing Communications and Drafts 27Anticipating the DOJ's Information and Document Requests 29Early Triage of Overlap Markets 30Assembling a Divestiture Package that Meets the Agencies' Criteria 31Choose a Strong Divestiture Buyer Early in the Process 31State Attorneys General 32Definition Of Relevant Markets 35Relevant Product Market 35The DOJ's Approach to Product Market Definition 35The Banking Agencies' Approach to Product Market Definition 38Relevant Geographic Market 41The DOJ's Approach to Geographic Market Definition 42The Banking Agencies' Approach to Geographic Market Definition 47Evaluation Of The Likely Competitive Effects Of Bank Mergers 57The Horizontal Merger Guidelines 57Market Concentration 57Theories of Competitive Harm 58Rebutting a Presumption of Competitive Harm 59The Screening Guidelines 60Assembling the Data 61Weighting the Data 61Market Shares and Concentration 62Interpreting Screen A and Screen B 62Modified Screens 63Small Business and Middle Market Commercial Loan Markets 63Assessment of Potential Mitigating Factors 65Lack of Competition Between the Merging Parties 65Updated Geographic Market Definitions 66Likelihood of Expanded Commercial Lending 67Evidence That Market Shares Do Not Reflect Competitive Significance 68Likelihood of New Entry 69Non-Bank and Out-of-Market Competitors 70Bank Merger Remedies 73Forms of Divestiture Commitments 74Federal Reserve Board and DOJ requirements 74Additional DOJ requirements 74Additional Federal Reserve Board Requirements 75Qualitative Branch Selection Criteria 75Exiting Party's Branches 76Branches Serving Entire Market and Small Businesses 76Commercially Oriented Branches 77No Supermarket Branches 77No Declining Branches 77Adequate Facilities 77The DOJ's Branch Information Request 78Facilities Information 78Transaction Activity Information 78Volume Information 79Middle-Market Divestitures 79Minimizing Burden 80Selecting the Divestiture Buyer 80One Buyer per Market 80In-Market vs. Out-of-Market Buyers 81Commercial Banks vs. Thrifts 81No Seller Financing 82Buyer's Plans for the Divestiture Branches 82DOJ Involvement in the Auction Process 82Final Approval Process 83Post-Approval Process 84Not Transfer Divested Customers or Solicit Their Defection 84Document Customer Departures from Divestiture Branches and Coordinate With the Buyer 84Facilitate the Buyer's Communications with Divested Customers and Employees 85Notify the Seller's Employees of the Seller's Obligations 85Conclusion 85Clavton Act 87Bank Merger Act 97Bank Holding Company Act 103Change in Bank Control Act 105Home Owners' Loan Act 1071992 Department of Justice and Federal Trade Commission Horizontal Merger Guidelines 109Bank Merger Competitive Review - Introduction and Overview (1995) 143Antitrust Division Policy Guide to Merger Remedies 155FDIC Statement of Policy on Bank Merger Transactions 197Interagency Bank Merger Act Application Form 207Report of the Department of Justice on the Likely Competitive Effects of the Proposed Acquisition by First Hawaiian, Inc. of First Interstate of Hawaii, Inc. 223Department of Justice Letters to the Federal Reserve Board 257Select Department of Justice speeches and Statements 281Table of Cases 333
