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Antitrust Issues in Mergers or Acquisitions of Natural Resources Companies

Raymond A. Jacobsen, Jr., Scott S. Megregian, Mergers and Acquisitions of Natural Resources Companies (1994)

This paper discusses antitrust issues that can arise during mergers or acquisitions of natural resource companies and presents practical suggestions for maximizing the chances of avoiding antitrust challenges to such transactions. The antitrust laws apply fully to the mining industry. The legal standards applicable to mergers in the mining industry are the same as those in other industries. In this paper, we apply these standards specifically to mergers within the mining industry to highlight the particular issues that are important to mining industry transactions.

The U.S. antitrust laws seek to prevent mergers and acquisitions that are likely to result in increased prices or decreased output. The 1990s have witnessed a significant increase in aggressive antitrust enforcement both at the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”). For example, as of October 9, 1994, the DOJ had challenged twenty-three proposed mergers this year, nine more than in any year since the 1970s. Still more mergers have been abandoned or modified without formal government intervention.

Since 1990, the government has investigated or challenged potential antitrust violations in an array of mining and natural resource industries, including aluminum, coal, silicon and ferrosilicon, rock salt, petroleum refining, crude oil refining, natural gas pipelines, coal