Facebook’s newest startup acquisition, CTRL-Labs, hopes its technology will allow users to control augmented reality (“AR”) technology with nothing more than a thought. (Kurt Wagner, Bloomberg Law). The startup, CTRL-Labs (pronounced “Control”), is developing a non-invasive neural interface that would convert user’s electrical muscle impulses into digital signals. (Polina Marinova, Fortune). This would allow users to move a mouse, or video game character, without having to move a muscle. Although the financial details of the acquisition are being kept private, according to people familiar with the deal, Facebook offered between $500 million and $1 billion for the startup. (Kurt Wagner, Bloomberg Law). The acquisition of CTRL-Labs comes at a time when technology companies, especially Facebook, are facing a bipartisan political attack on anti-competitive behavior within the industry. (David McLaughlin et al., Fortune). This post will also briefly address Facebook’s entry into and aspirations of the AR hardware market, and recent governmental oversight concerning Facebook's history of absorbing potential competitors.
Read MoreThe Delaware Chancery court, per Vice Chancellor Glasscock, issued an opinion in Vintage Rodeo Parent, LLC v. Rent-A-Center, Inc., 2019 WL 1223026 (Del. Ch. Mar. 14, 2019), which discussed the implications of Vintage’s inadvertent failure to meet a merger extension deadline. At stake was a $126.5 million breakup fee. The court held that the target, Rent-A-Center, had no duty to warn Vintage of the impending deadline. While the decision, which focuses on a strict reading of contractual duties is understandable, it fits uneasily with a prominent previous decision; it also seems to be missing a full analysis of the duty of good faith.
Read MoreOn March 12, 2019, executives of T-Mobile US Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) testified in the third round of Congressional Hearings concerning the merger of the two companies. T-Mobile’s purchase of Sprint for $26 billion was announced almost a year ago on April 29, 2018 and continues to endure questioning from regulators. (Victoria Graham, Bloomberg). The Federal Communications Commission (“FCC”) and the Democratic-controlled House Subcommittee on Antitrust are reviewing the merger under the Communications Act of 1934 to ensure it promotes “the public interest, convenience, and necessity.” (47 U.S.C. §310(d); Chairman Frank Pallone, Jr., Committee on Energy and Commerce). While the U.S. Department of Justice’s (“DOJ”) antitrust division does not consider U.S. industrial policy in merger reviews like the House Subcommittee, it is looking at whether the deal harms competition. (Todd Shields et al., Bloomberg).
Read MoreDeutsche Bank’s merger with Commerzbank could make Deutsche Bank the fourth largest bank in Europe with the potential to make Germany instrumental in the international market. With Deutsche Bank (“Deutsche”) getting support from key German government officials to proceed with negotiations to merge with Commerzbank, it seems likely a merger between the two will succeed. Although a merger between the banks is probable, the banks face a great amount of opposition, and logistical issues, which may hinder the merger and any future success Deutsche could enjoy. The acquisition serves as a strategy to improve Deutsche’s competitiveness by giving Deutsche the necessary size and resources to compete in the global market.
Read MoreThe Blackstone Group (“Blackstone”), a New York-based financial services firm, announced on March 15, 2019, that it had signed a definitive agreement to purchase Japanese drug maker AYUMI Pharmaceutical Corporation (“AYUMI”). (Lisa Du, Bloomberg Law). This deal marks Blackstone’s first investment in a growing Japanese private equity market. (Matt Anderson et al., Blackstone). AYUMI produces drugs for rheumatic and orthopedic disorders and is valued at around $1 billion. The company is currently owned by Japanese private equity firms Unison Capital Inc. (“Unison”) and M3 Inc. (“M3”). (Lisa Du, Bloomberg Law).
Read MoreThe Committee on Foreign Investment in the United States (“CFIUS”) is a multi-agency committee comprised of members from executive agencies related to the economy, national security, and foreign intelligence. The agency was created during Gerald Ford’s presidency and its mandate is to review any transaction (called “covered transactions”) that might have an impact on U.S. national security (Keeler, Mayer Brown).A covered transaction is a merger, acquisition, or takeover in which a foreign national, entity, or government acquires an interest in a U.S. business that has an impact on U.S. national security (Jaramillo, Foley Hoag).This system of review was designed to be voluntary. Even so, CFIUS maintains the ability to block transactions when no notice of filing is submitted through the CFIUS system.
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