Bank Mergers and Acquisitions Handbook »

The 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.

Foreword     vii
Preface     ix
Introduction     1
General Antitrust Principles in Financial Institution Mergers and Acquisitions     5
Antitrust Laws Affecting Financial Institution Mergers and Acquisitions     5
The Sherman Antitrust Act and the Clayton Act     5
Financial Institution-Specific Statutes     6
Hart-Scott-Rodino Act     8
Competitive Review$dFederal Bank Regulatory Agencies     9
The Merger Guidelines     12
State Attorneys General     13
Timing Considerations and Notification Procedures     15
Statutory and Regulatory Processing Periods     15
BHC Act Applications and Notices     15
Standard Procedures Relating to Banking Operations     15
Streamlined Procedures Relating to Banking Operations     17
Post-Approval Waiting Period under the BHC Act     19
Control Act Notices     19
BMA Notices     20
Non-Bank Operations and the HSR Act     21
Standard 4(c)(8) Procedures     23
Streamlined 4(c)(8) Procedures     24
HSR Act Waiting Periods     25
Choosing between 4(c)(8) and HSR     26
Practical Considerations withRespect to Timing     27
Pre-filing Communications and Drafts     27
Anticipating the DOJ's Information and Document Requests     29
Early Triage of Overlap Markets     30
Assembling a Divestiture Package that Meets the Agencies' Criteria     31
Choose a Strong Divestiture Buyer Early in the Process     31
State Attorneys General     32
Definition Of Relevant Markets     35
Relevant Product Market     35
The DOJ's Approach to Product Market Definition     35
The Banking Agencies' Approach to Product Market Definition     38
Relevant Geographic Market     41
The DOJ's Approach to Geographic Market Definition     42
The Banking Agencies' Approach to Geographic Market Definition     47
Evaluation Of The Likely Competitive Effects Of Bank Mergers     57
The Horizontal Merger Guidelines     57
Market Concentration     57
Theories of Competitive Harm     58
Rebutting a Presumption of Competitive Harm     59
The Screening Guidelines     60
Assembling the Data     61
Weighting the Data     61
Market Shares and Concentration     62
Interpreting Screen A and Screen B      62
Modified Screens     63
Small Business and Middle Market Commercial Loan Markets     63
Assessment of Potential Mitigating Factors     65
Lack of Competition Between the Merging Parties     65
Updated Geographic Market Definitions     66
Likelihood of Expanded Commercial Lending     67
Evidence That Market Shares Do Not Reflect Competitive Significance     68
Likelihood of New Entry     69
Non-Bank and Out-of-Market Competitors     70
Bank Merger Remedies     73
Forms of Divestiture Commitments     74
Federal Reserve Board and DOJ requirements     74
Additional DOJ requirements     74
Additional Federal Reserve Board Requirements     75
Qualitative Branch Selection Criteria     75
Exiting Party's Branches     76
Branches Serving Entire Market and Small Businesses     76
Commercially Oriented Branches     77
No Supermarket Branches     77
No Declining Branches     77
Adequate Facilities     77
The DOJ's Branch Information Request     78
Facilities Information     78
Transaction Activity Information      78
Volume Information     79
Middle-Market Divestitures     79
Minimizing Burden     80
Selecting the Divestiture Buyer     80
One Buyer per Market     80
In-Market vs. Out-of-Market Buyers     81
Commercial Banks vs. Thrifts     81
No Seller Financing     82
Buyer's Plans for the Divestiture Branches     82
DOJ Involvement in the Auction Process     82
Final Approval Process     83
Post-Approval Process     84
Not Transfer Divested Customers or Solicit Their Defection     84
Document Customer Departures from Divestiture Branches and Coordinate With the Buyer     84
Facilitate the Buyer's Communications with Divested Customers and Employees     85
Notify the Seller's Employees of the Seller's Obligations     85
Conclusion     85
Clavton Act     87
Bank Merger Act     97
Bank Holding Company Act     103
Change in Bank Control Act     105
Home Owners' Loan Act     107
1992 Department of Justice and Federal Trade Commission Horizontal Merger Guidelines     109
Bank Merger Competitive Review - Introduction and Overview (1995)      143
Antitrust Division Policy Guide to Merger Remedies     155
FDIC Statement of Policy on Bank Merger Transactions     197
Interagency Bank Merger Act Application Form     207
Report of the Department of Justice on the Likely Competitive Effects of the Proposed Acquisition by First Hawaiian, Inc. of First Interstate of Hawaii, Inc.     223
Department of Justice Letters to the Federal Reserve Board     257
Select Department of Justice speeches and Statements     281
Table of Cases     333