On April 28, 2020, Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez announced plans to introduce legislation that would impose a moratorium on “risky” mergers and acquisitions through the duration of the COVID-19 pandemic. Named the Pandemic Anti-Monopoly Act (the “Act”), it is intended to protect small or struggling businesses from being exploited during the pandemic and prevent industry consolidation.

Mergers and acquisitions that would be prohibited under the Act would include those involving:

• companies with more than $100 million in revenue or financial institutions with more than $100 million in market capitalization;
• private equity companies, hedge funds, or companies that are majority-owned by a private equity company or hedge fund;
• companies with exclusive patents related to the pandemic such as personal protective equipment; and
• transactions that must otherwise normally be reported to the Federal Trade Commission (the “FTC”).

Additionally, the Act would propose a pause on all waiting periods and deadlines imposed on antitrust agencies and the enactment of FTC rules establishing a legal presumption against mergers and acquisitions that risk interfering with the government’s national emergency response capability. These restrictions are suggested to last until the FTC unanimously decides small businesses, workers and consumers no longer face serious financial strain.

We will continue to monitor any developments regarding this proposed Act or similar legislation. If you have any questions concerning the foregoing please contact your Seward & Kissel relationship attorney in the firm’s Business Transactions Group.

Seward & Kissel has established a COVID-19 Resource Center on our web site to access all relevant alerts that we distribute.