Bank Mergers and Acquisitions HandbookThe 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. |
Contents
INTRODUCTION | 1 |
GENERAL ANTITRUST PRINCIPLES IN FINANCIAL INSTITUTION MERGERS AND ACQUISITIONS | 5 |
2 Financial InstitutionSpecific Statutes | 6 |
3 HartScottRodino Act | 8 |
B Competitive Review by Federal Bank Regulatory Agencies | 9 |
C The Merger Guidelines | 12 |
D State Attorneys General | 13 |
TIMING CONSIDERATIONS AND NOTIFICATION PROCEDURES | 15 |
F Assessment of Potential Mitigating Factors | 65 |
2 Updated Geographic Market Definitions | 66 |
3 Likelihood of Expanded Commercial Lending | 67 |
4 Evidence That Market Shares Do Not Reflect Competitive Significance | 68 |
5 Likelihood of New Entry | 69 |
6 NonBank and OutofMarket Competitors | 70 |
BANK MERGER REMEDIES | 73 |
A Forms of Divestiture Commitments | 74 |
b Streamlined Procedures Relating to Banking Operations | 17 |
c PostApproval Waiting Period under the BHC Act | 19 |
3 BMA Notices | 20 |
4 NonBank Operations and the HSR Act | 21 |
a Standard 4c8 Procedures | 23 |
b Streamlined 4c8 Procedures | 24 |
c HSR Act Waiting Periods | 25 |
d Choosing between 4c8 and HSR | 26 |
B Practical Considerations with Respect to Timing | 27 |
1 Prefiling Communications and Drafts | 28 |
2 Anticipating the DOJs Information and Document Requests | 29 |
3 Early Triage of Overlap Markets | 30 |
4 Assembling a Divestiture Package that Meets the Agencies Criteria | 31 |
C State Attorneys General | 32 |
DEFINITION OF RELEVANT MARKETS | 35 |
2 The Banking Agencies Approach to Product Market Definition | 38 |
B Relevant Geographic Market | 41 |
1 The DOJs Approach to Geographic Market Definition | 42 |
2 The Banking Agencies Approach to Geographic Market Definition | 47 |
EVALUATION OF THE LIKELY COMPETITIVE EFFECTS OF BANK MERGERS | 57 |
2 Theories of Competitive Harm | 58 |
3 Rebutting a Presumption of Competitive Harm | 59 |
B The Screening Guidelines | 60 |
1 Assembling the Data | 61 |
3 Market Shares and Concentration | 62 |
D Modified Screens | 63 |
3 Additional Federal Reserve Board Requirements | 75 |
1 Exiting Partys Branches | 76 |
3 Commercially Oriented Branches | 77 |
C The DOJs Branch Information Request | 78 |
3 Volume Information | 79 |
5 Minimizing Burden | 80 |
2 InMarket vs OutofMarket Buyers | 81 |
4 No Seller Financing | 82 |
E Final Approval Process | 83 |
F PostApproval Process | 84 |
3 Facilitate the Buyers Communications with Divested Customers and Employees | 85 |
CLAYTON ACT | 87 |
BANK MERGER ACT | 97 |
BANK HOLDING COMPANY ACT | 103 |
CHANGE IN BANK CONTROL ACT | 107 |
HOME OWNERS LOAN ACT | 109 |
1992 DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION HORIZONTAL MERGER GUIDELINES | 111 |
BANK MERGER COMPETITIVE REVIEW INTRODUCTION AND OVERVIEW 1995 | 145 |
ANTITRUST DIVISION POLICY GUIDE TO MERGER REMEDIES | 159 |
FDIC STATEMENT OF POLICY ON BANK MERGER TRANSACTIONS | 201 |
INTERAGENCY BANK MERGER ACT APPLICATION FORM | 211 |
REPORT OF THE DEPARTMENT OF JUSTICE ON THE LIKELY COMPETITIVE EFFECTS OF THE PROPOSED ACQUISITION BY FIRST HA... | 227 |
DEPARTMENT OF JUSTICE LETTERS TO THE FEDERAL RESERVE BOARD | 261 |
SELECT DEPARTMENT OF JUSTICE SPEECHES AND STATEMENTS | 285 |
TABLE OF CASES | 335 |
Common terms and phrases
acquired acquisition additional analysis Antitrust Division approval bank holding company bank mergers Bank of Hawaii BankAmerica banking agencies banking services BHC Act Bull business banking commercial banks commercial lending commercial loans compete competitive concerns competitive effects competitors consent decree consumers Corp customers Department of Justice depository institution deposits divest branches divestiture assets divestiture package DOJ's efficiencies entry FDIC Federal Reserve Bank Federal Reserve Board Federal Reserve System Federal Trade Commission geographic market definition Hawaii HSR Act insured investigation lessen competition market concentration market share medium-sized businesses merger applicants Merger Guidelines merging firms merging parties middle market million NationsBank non-bank offices percent potential premerger price increase proposed transaction purchaser relevant geographic market relevant market request require result seller significant and nontransitory small and medium-sized small business small but significant substantial sunk costs thrifts transaction accounts waiting period