FTC Signals New Merger Challenge Strategy With Permanent Injunction
The FTC's successful block of Henkel’s acquisition of Liquid Nails marks a strategic shift toward seeking permanent injunctions in federal court without parallel administrative proceedings.
A US district court granted the Federal Trade Commission's request for a permanent injunction to block German multinational Henkel’s proposed $725 million acquisition of Liquid Nails. The court sided with the FTC's view that combining Henkel's Loctite brand with its main competitor would eliminate head-to-head competition, leading to higher prices and reduced innovation for construction adhesives.
This victory is significant because the FTC is framing it as a successful application of its "new approach to seeking permanent injunctions to block anticompetitive mergers without the need to continue cases in administrative proceedings." This signals a more aggressive litigation posture aimed at resolving merger challenges directly and finally in federal court, circumventing the agency's traditionally lengthy and resource-intensive internal administrative trial process. The outcome may embolden the Commission to pursue this streamlined path in future challenges.
Counsel for merging parties must now incorporate this assertive FTC litigation strategy into their transaction-risk assessments, as it increases the prospect of a faster, higher-stakes court battle. The case underscores the critical need for parties to be prepared for a robust federal court defense from the outset of any deal facing deep FTC scrutiny.