Novel FTC Theory in Evonik, PeroxyChem Sinks Merger Win Streak

The Federal Trade Commission’s multi-year winning streak ended with Evonik Industries AG’s successful $625 million acquisition of PeroxyChem LLC after unsuccessfully employing an atypical legal strategy to block the deal.

Lawyers for the FTC invoked the uncommonly used theory of supply-side swing. The theory is that suppliers of a product have the ability to easily switch from one product grade to another, giving one firm the ability to monopolize an entire product market.

The FTC’s “mistake in my view was putting all of their eggs in one basket which is the supply side swing theory,” Joel Mitnick, an antitrust partner ...