MSCI, USCC Raise Concerns About California Plan To Alter Merger Review Process

On Nov. 21, the Metals Service Center Institute (MSCI), the U.S. Chamber of Commerce (USCC), and nearly three dozen other trade associations sent a letter to the California Law Revision Commission raising concerns about efforts by California to establish a legal standard for merger review that impedes, contradicts, or otherwise departs from the standard set by federal law.

The letter, available at this link, argued the move would risk disrupting national commerce, creating unnecessary regulatory burdens, and undermining the efficiency and predictability that businesses rely upon to operate and grow.

A handful of other states are considering a similar standard even though, for decades, the federal statutory framework for merger review, as administered by the Department of Justice (DOJ), Federal Trade Commission, and state attorneys general, has provided a consistent, transparent, and effective process for evaluating mergers and acquisitions. This legal framework has enabled rigorous competition fostering an environment where businesses can innovate, grow, and contribute to the economic vibrancy of our nation, while ensuring that mergers that could harm consumers are appropriately scrutinized and when necessary, modified or blocked.

“Introducing a separate legal standard for merger review in California law would create significant challenges for businesses operating across state lines,” the letter concluded. “A state-specific law would likely lead to conflicting standards, increased compliance costs, and delays in transactions that are critical to business growth and innovation. Moreover, such a law could deter investment and stifle economic activity, particularly for smaller and mid-sized businesses that lack the resources to navigate multiple regulatory regimes.”