November Antitrust and Competition Bulletin: Top-of-Mind Global Antitrust Issues

Welcome to this edition of the Sidley Antitrust and Competition Bulletin — thoughts on topics that are top of mind for Sidley’s global Antitrust and Competition team and why they may matter to you. 

• The U.S. Federal Trade Commission loses its first merger challenge under the second Trump administration, as court refuses to enjoin GTCR LLC’s combination of Surmodics and Biocoat.
• In a recent judgment, the Court of Justice of the European Union further clarifies case law on patent settlement agreements.
• The European Commission conditionally cleared another transaction under the Foreign Subsidies Regulation.
• Ohio and New York antitrust chiefs express support for developing patchwork of state merger prenotification laws.
• The United Kingdom Competition and Markets Authority recently consulted on an updated approach and guidance for merger remedies.

Read more on how this news can affect your business below....

District judge rejects Federal Trade Commission (FTC) request to enjoin GTCR combination of Surmodics and Biocoat: Private equity firm GTCR plans to merge the largest and second-largest medical coatings suppliers, Surmodics and Biocoat Inc. U.S. District Judge Jeffrey Cummings of the Northern District of Illinois was persuaded that the parties’ $8 million divestiture of certain Biocoat coatings assets to third party Integer resolved competition concerns. In addition to siding with the parties on such other issues as market definition and market shares, Judge Cummings was convinced that Integer would be adequately positioned to enter the market successfully. He therefore denied the FTC request to stop the merger. 

Why it matters: In one sense, this outcome is straightforward: This decision is the latest in a long line of merging party victories when the battle in district court is over “litigating the fix,” that is, convincing a judge that the parties’ divestiture proposal sufficiently restores competition lost as a result of the challenged deal. What is perhaps complicating for the Department of Justice (DOJ) and the FTC is that the loss highlights the incentives parties have to withhold proposed remedies until the eve of trial where they are dubious of the agency’s willingness to engage on remedies. Despite the FTC’s misgivings about late remedies disclosures, that was a winning strategy for the merging parties here. On the other hand, the agencies have shown that they are more interested than the previous administration in negotiating remedies packages for problematic mergers. Despite the merging parties’ prevailing, the way this deal played out may have had more to do with the fact that it was filed and received a second request while the FTC was under the Biden administration and Chair Lina Khan than it is foretelling of the expected merger playbook in the near future.

Court of Justice of the European Union (CJEU) further clarifies case law on patent settlement agreements in Teva/Cephalon: On October 23, the CJEU dismissed Teva’s appeal against the EU General Court’s judgment that the patent settlement agreement between Teva and Cephalon (which predated Teva’s acquisition of Cephalon) and the accompanying the commercial transactions restricted competition “by object.” The CJEU further confirmed the legal test to assess whether patent settlement agreements infringe Article 101 of the Treaty on the Functioning of the European Union. In particular, it has to be assessed whether the net gain from the value transfers by the originator company to the generic company can be fully justified by the need to compensate for the costs of, or disruption caused by, the dispute between the parties (e.g., the reimbursement of litigation costs/disruption or remuneration for the actual and proven supply of goods or services). 

If not fully justified by such a need, it has to be determined whether the value transfers can have no explanation other than the commercial interest of the parties not to compete on the merits, that is, whether the net gain is sufficiently large to incentivize the generic company to refrain from entering the market(s) concerned. 

Why it matters: This CJEU’s judgment further clarifies the legal framework to assess whether patent settlement agreements between originator and generic companies that include monetary or nonmonetary transfers of value from the originator to the generic company in exchange for the latter’s commitment not to challenge the originator company’s patents and to delay market entry infringe EU competition rules. 

Second conditional clearance under the Foreign Subsidies Regulation (FSR): On November 14, the European Commission (EC) conditionally cleared the €14.7 billion acquisition by Abu Dhabi National Oil Company PJSC (ADNOC) of Covestro AG (Covestro). After opening an in-depth FSR investigation in July, the EC examined whether an “unlimited” state guarantee by the United Arab Emirates (UAE) and a committed capital increase could have given ADNOC an unfair advantage in the bidding process for the German chemical group (allowing it offer a valuation and financial terms not in line with market conditions). Following several rounds of information requests, the EC accepted ADNOC’s refined remedy package that includes (i) amendment of ADNOC’s articles of association to remove the unlimited state-backed guarantee and (ii) a commitment to share Covestro’s intellectual property in the area of sustainability with certain market participants at transparent terms and conditions. The decision follows the transaction’s earlier unconditional merger clearance in May 2025.

Why it matters: The FSR, in force since July 2023, empowers the EC to investigate and remedy distortions in the EU internal market caused by non-EU financial contributions. While many transactions have been notified under the regime, only one previous case — the e&/PPF telecoms deal — previously had reached a Phase 2 investigation and conditional clearance. Similar to the remedies in ADNOC/Covestro in e&/PPF, the UAE-backed buyer in that case secured EC approval in September 2024 after removing language in its articles of association that implied a state guarantee. These precedents signal that the EC will scrutinize not only financing sources but also governance instruments that could imply state backing.

Developing patchwork of state merger notification requirements: Earlier this year, we covered as Washington state became the first U.S. state to enact its own premerger notification act, with Colorado following closely behind. As of this writing, versions of the Uniform Antitrust Pre-Merger Notification Act have been introduced in five additional state legislatures (California, Nevada, Utah, West Virginia, and Hawaii) plus the District of Columbia, along with a seventh Hart-Scott-Rodino, or HSR, Act analogue pending in the New York Assembly. These new state laws found support this month in Beth Finnerty, chief of the antitrust section for Ohio’s attorney general, and Elinor Hoffmann, chief of the New York attorney general’s antitrust bureau. Speaking at the Antitrust 2025 Fall Forum of the American Bar Association this month, Finnerty expressed support for these state-level mini-HSR Acts, offering that there may be “local markets where you might have direct competition, where you want some kind of relief” but that are too small for the FTC or DOJ focus. Similarly, Hoffmann remarked that the Uniform HSR statute allows for the sharing of information among states that have passed the HSR Act.

Why it matters: While parties already needed to consider state-level antitrust enforcement over mergers, the recent spate of new premerger notification requirements may mean additional potential roadblocks to merger clearance. In addition to explaining notified mergers to federal regulators, parties will need to include state regulators in their clearance strategy. The growing patchwork of regulators and statutes also introduces the possibility for divergent views on mergers among states or between states and federal regulators, which could slow the clearance process. 

The United Kingdom Competition and Markets Authority (CMA) proposes to update its approach to merger remedies: The UK CMA recently closed a consultation on proposed changes to its Merger Remedies Guidance. This draft guidance suggests a more flexible approach to remedy design in merger cases, including greater openness to the possibility of behavioral remedies and an emphasis on earlier engagement to identify workable solutions to competition issues in Phase 1. Please see our Sidley Update for further details.

Why it matters: The consultation comes against a backdrop in which the CMA looks to refine elements of both its policy framework and its case-handling approach. On policy framework, at the end of October the CMA published final updated guidance on jurisdiction and merger procedure, an updated Merger Notice template, and updated guidance on the CMA’s mergers intelligence function. As regards case handling, the CMA merger inquiry outcome statistics show that in the first six months of FY2025–26 only five Phase 1 cases were considered in a Case Review Meeting — an internal meeting toward the end of Phase 1 where the CMA considers whether the investigation should progress toward a finding of a substantial lessening of competition (which, if found, may be a candidate case for possible remedies), comparing with an annual previous all-time low of 18 in FY2019–20. This may be the result of the CMA’s broader effort to embed its “4Ps” — pace, predictability, proportionality and process — more firmly into its merger control framework.