Delrahim: Blocking All Mergers During Pandemic Is Misguided

Makan Delrahim, the top antitrust official at the Justice Department, told CNBC on Wednesday,he believes a pandemic moratorium on big corporate mergers would be “misguided.”

Sen. Elizabeth Warren, D-Mass., and fellow progressive Rep. Alexandria Ocasio-Cortez, D-N.Y., have proposed “The Pandemic Anti-Monopoly Act” to “stop large corporations from exploiting the coronavirus pandemic to engage in harmful mergers.” It would place a moratorium on deals for companies with more than $100 million in revenue, as well as some private equity funds and hedge funds.

“We haven’t seen the legislative language, so we can’t have any official position on it,” Delharim said in a “Squawk Box” interview. “However, I think it would be misguided to just block all attempts for transactions.”

He added: “For every complex problem, there’s a very simple solution — and it’s wrong.”

Delrahim said some transactions may be “very necessary” now — to ensure that companies have liquidity and to keep workers employed. With that in mind, Delrahim said his department will not review transactions with its “head in the sand.”

When asked whether Amazon’s rumored interest in acquiring movie theater operator AMC Entertainment would fit within the “failing firm” framework, Delrahim declined to comment on the potential deal explicitly.

“The movie exhibition industry has gone through some challenges over the years, just with the high capital expense they must continue to put in, and the movie theaters have been shut down, like theme parks,” he said.

“So we would look at it again under the same three-part test — should that be a defense to the merger,” he said, adding that the deal itself might not pose competition concerns even under normal conditions. 

Merricks v. Mastercard: “Passing on” the U.S. Experience

By Makan Delrahim (Assistant Attorney General, Antitrust Division, U.S. Department of Justice)¹