FTC Signals New Merger Challenge Strategy With Court Win
The FTC's successful federal court challenge to Henkel's acquisition of Liquid Nails confirms a strategic shift toward seeking permanent injunctions directly, bypassing its own administrative process.
A US district court has granted the Federal Trade Commission a permanent injunction to block Henkel’s proposed $725 million acquisition of Liquid Nails, a key rival to its Loctite brand in the construction adhesives market. The Southern District of New York sided with the FTC’s argument that the horizontal merger would eliminate significant head-to-head competition, leading to higher prices and reduced quality and innovation for consumers.
Sophisticated counsel should note the FTC is explicitly highlighting this victory as a validation of its new enforcement strategy. Rather than seeking a preliminary injunction in federal court while the merits are tried in its own administrative tribunal, the agency pursued the case to a final judgment directly in district court. This approach, championed by leadership, signals a more aggressive litigation posture intended to secure faster and more definitive outcomes. For parties contemplating mergers with potential antitrust issues, this shift means they must prepare for a full-scale federal court battle from the outset, altering the strategic landscape for challenging or defending a proposed transaction against an FTC complaint.