In the Matter of ARKO: Non-Competes in Mergers & Acquisitions
The Federal Trade Commission (“FTC”) recently agreed to settle its allegations that a non-compete agreement between parties to a transaction to acquire gas stations was anticompetitive, demonstrating that the FTC will continue to scrutinize all aspects of a merger or acquisition. The FTC and the Antitrust Division of the U.S. Department of Justice have expressed heightened concerns over non-compete agreements (as well as non-solicitation agreements) over the past few years. While this decision is not the first to address a non-compete agreement within the context of an acquisition or merger, it illustrates the FTC’s continued efforts to rein in non-compete agreements that it considers to be overbroad in scope or duration. In this matter, the FTC found the non-compete agreement was overbroad in several respects. Aside from concerns with the non-compete, the FTC also found the transaction harmed competition in five markets for retail gasoline and one market for diesel by reducing the number of competitors to two or fewer and required the acquiring company to divest five gas stations in these markets.
CGR Memo - In the Matter of ARKO Non-Competes in Mergers Acquisitions.pdf (pdf | 129.80 KB )