Merger remedies remain a viable strategic option in Trump 2.0

Six months ago, the first merger settlements announced under Trump 2.0[1] signaled Federal Trade Commission (FTC) and U.S. Department of Justice Antitrust Division (DOJ) openness to divestitures to address potential competitive concerns arising from mergers, a significant change from the approach under the Biden administration. Recent agency actions confirm this policy shift.  Earlier this month, Daniel Guarnera, Director of the Bureau of Competition at the FTC, stated that parties undertaking their own remedies without entering into a settlement with the antitrust agencies and preparing to defend the deal in court, a strategy known as “litigating the fix” that had become more prevalent in the prior administration, is now “[i]n many cases … unnecessary, because the FTC is willing to engage with parties in good faith to determine if our concerns can be resolved before we file an enforcement action.”[2]  Three settlements announced by the FTC and DOJ last week confirm that divestitures may be a viable option for obtaining clearance in many transactions.  As a result, transacting parties should consider strategic, credible, and well-defined divestitures as viable paths to deal clearance. 

Proposed settlements must meet the agencies’ remedies criteria

FTC Chair Andrew Ferguson has previously outlined his criteria for valid remedies proposals, stating that the FTC remains “clear-eyed about the dangers of inadequate or unworkable settlements.”[3]  Instead, Chair Ferguson stated that an acceptable remedy “involves the sale of a standalone or discrete business, or something very close to it,” and that the divestiture must include all assets needed “(1) to make that line of business viable, (2) to give the divestiture buyer the incentive and ability to compete vigorously against the merged firm, and (3) to eliminate to the extent possible any ongoing entanglements between the divested business and the merged firm.”[4]  Further, Chair Ferguson emphasized that a divestiture buyer must have “the resources and experience necessary to make that standalone business competitive in the market.”  Similarly, during her confirmation hearing, DOJ Assistant Attorney General Gail Slater noted that she expected “this Administration will be more open to settlements in merger cases when effective and robust structural remedies can be implemented without excessively burdening the Antitrust Division’s resources.”[5]  Consistent with these statements, last week the FTC and DOJ announced three new merger settlements, confirming the administration’s willingness to negotiate divestitures across a range of sectors. 

January 2026 merger settlements

Sevita Health / BrightSpring

In Sevita Health / Bright Spring, the FTC alleged that a proposed acquisition of BrightSpring’s ResCare Community Living business by Sevita would “combine the two largest national providers of residential services to individuals with intellectual and developmental disabilities, known as IDD services.”[6]  The FTC alleged that the combination would result in fewer options for, and lower quality services to, a vulnerable population and disincentivize investment, training, and individualized services.[7]

To resolve its competitive concerns, the proposed consent order would require Sevita to divest 128 intermediate care facilities in Louisiana, Indiana, and Texas to Dungarvin Group,[8] another operator of intermediate care facilities with a successful track record of prior acquisitions.[9]  The proposed order would also prohibit Sevita from acquiring any other facilities providing IDD services located near any divestiture facility for 10 years.[10]

Reddy Ice / Arctic Glacier

The DOJ also announced a proposed final judgment (PFJ) in the industrial ice sector in connection with the proposed acquisition by Reddy Ice of Arctic Glacier.  DOJ alleged that absent divestiture, the transaction “would have led to higher prices and lower service quality on packaged ice, a staple Americans enjoy everywhere from backyard cookouts to cross-country flights.”[11]

The settlement requires the merging parties to divest assets in California, Massachusetts, New York, Oregon, and Washington, including certain manufacturing and distribution facilities and customer relationships and contracts to a number of local divestiture buyers, and to provide advance notification for certain future transactions.[12]  The PFJ comes only six months after signing of the transaction.

Columbus McKinnon / Kito Crosby

Finally, the DOJ also announced a PFJ in the manufacturing sector in connection with the acquisition by Columbus McKinnon Corporation (CMCO) of Kito Crosby Limited (Kito).[13] The DOJ had alleged that CMCO and Kito are “two of the leading manufacturers in the markets for electric chain hoists and overhead lifting chain in the United States” and compete head-to-head to manufacture, distribute, and sell those products.[14]

To resolve concerns that the transaction would “result in higher prices, lower quality, and reduced innovation to the detriment of customers,” the settlement requires CMCO to divest its power chain hoist business and its chain business to a private investment fund with “significant experience in industrial manufacturing.”[15]

Conclusion

Trump 2.0 antitrust enforcers have made clear that they are committed to vigorous enforcement, especially in consumer-facing sectors of the economy, but have signaled less skepticism of M&A than the Biden administration. The settlements announced last week across a diverse range of sectors confirm that the antitrust agencies are open to resolving competitive concerns in certain transactions with divestitures that allow deals to close without litigation. As a result, merging parties should evaluate potential feasibility of divestitures early in the transaction process. 

Given the agencies’ willingness to engage on remedies, transacting parties will benefit from careful evaluation and planning for divestitures which may provide a means to avoid delay, expense, and uncertainty in some deals. Consistent with Chair Ferguson’s guidelines, parties should be prepared to show the agencies how the scope of the assets proposed to be sold will allow a divestiture buyer to operate the business effectively as a strong competitor going forward.