Black underrepresentation in the acquisition of divested assets raises questions at FTC and DOJ

MLex Market Insight

Divestitures are part and parcel of the US regulatory landscape: When a deal raises red flags, the merging companies offer to shed parts of their businesses, in a bid to get the proposal over the line. But who buys those divested assets and businesses? According to an investigation by MLex’s sister publication FTC Watch, black-owned and black-backed businesses are missing out. In fact, over a recent three-year period, no African American businesses have been involved in acquiring divested assets. It’s something that goes to the heart of the merger operations of both the Federal Trade Commission and the Department of Justice because they are the regulators that sign off on acquisitions of this kind and, therefore, are the gatekeepers of divestitures. The federal agencies argue that they’re just applying the rules; But black businesses and lawyers who spoke to FTC Watch argue that the underrepresentation of minority acquisitions in divestitures is a result of structural racism.