June 7, 2018 / 7:20 PM / 4 months ago

U.S. antitrust official says worries over limiting vertical deals 'misplaced'

NEW YORK (Reuters) - A top antitrust official at the U.S. Justice Department attempted to reassure investors on Thursday that worries that regulators would crack down on proposed combinations of two companies on a supply chain — known as vertical mergers — were overblown.

FILE PHOTO: The U.S. Department of Justice building is seen in Washington, U.S., February 1, 2018. REUTERS/Jim Bourg

Makan Delrahim, the assistant attorney general for antitrust, said that most proposed transactions were either good for consumers or neutral.

But the department’s decision in November to sue to stop AT&T Inc (T.N), which owns DirecTV, from buying Time Warner Inc TWX.N made investors question whether other vertical deals might also meet with skepticism from antitrust enforcers.

Delrahim said that was overblown.

“I understand that some journalists and observers have recently expressed concern that the antitrust division no longer believes that vertical mergers can be efficient and beneficial to competition and consumers,” he said.

Delrahim said that some of these point at the decision to sue to try to stop AT&T from buying Time Warner “as a supposed bellwether,” he said. “Rest assured these concerns are misplaced.”

Two other vertical deals under review are Cigna Corp’s (CI.N) plan to buy Express Scripts Holding Co (ESRX.O) for $52 billion and CVS Health Corp’s (CVS.N) planned merger with Aetna Inc (AET.N) for $69 billion.

Reporting by Liana B. Baker; Writing by Diane Bartz; Editing by Lisa Shumaker

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