WASHINGTON (Reuters) - Six Republicans on the U.S. House of Representatives Judiciary Committee wrote a letter to antitrust enforcers on Wednesday to disagree with proposals from some Democrats for a merger moratorium during the current painful economic slowdown.
The six, led by the top Republican on the committee Representative Jim Jordan, wrote officials at the Justice Department and Federal Trade Commission to argue that lawful mergers should be allowed to continue without “artificial intervention or delay.”
In April, David Cicilline, chair of the House Judiciary Committee’s antitrust panel, made a long-shot call for a moratorium on mergers in the next coronavirus stimulus package and a ban on deals that are not directly related to companies about to fail.
Two of the most popular Democrats, Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, said they would propose legislation to stop mergers for companies with more than $100 million in revenue while the United States struggles economically during the coronavirus pandemic.
The six Republican lawmakers argued in their letter that dealmaking had already slowed to its lowest level in five years, that the agencies are able to review deals despite the new coronavirus forcing many officials to work from home and that stopping dealmaking could make it harder for companies to access capital.
“A broad ban on M&A activity would deny American entrepreneurs and companies the managerial expertise that comes with strategic partnerships, expertise that will enhance
recovery and help avoid business failures and an onslaught of bankruptcy filings,” the letter said.
The letter was addressed to Makan Delrahim, the head of the Justice Department’s Antitrust Division, and Ian Conner, competition director at the Federal Trade Commission.
Delrahim told CNBC on Wednesday that the idea of a moratorium on big corporate mergers was “misguided.”
In addition to Jordan, it was signed by Representative James Sensenbrenner, the top Republican on the antitrust subcommittee, as well as Representatives Ken Buck, Matt Gaetz, Kelly Armstrong and Gregory Steube.
Reporting by Diane Bartz; Editing by David Gregorio