Mergers, Acquisitions and Divestitures

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      TikTok Bill’s Progress Slows in the Senate

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      Legislation to force TikTok’s Chinese owner to sell the app or have it banned in the United States sailed through the House, but the Senate has no plans to move hastily.After a bill that would force TikTok’s Chinese parent company to sell the app or face a nationwide ban sailed through the House at breakneck speed this week, its progress has slowed in the Senate.Senator Chuck Schumer of New York, the Democratic leader who determines what legislation gets a vote, has not decided whether to bring the bill to the floor, his spokesman said. Senators — some of whom have their own versions of bills targeting TikTok — will need to be convinced. Other legislation on the runway could be prioritized. And the process of taking the House bill and potentially rewriting it to suit the Senate could be time consuming.Many in the Senate are keeping their cards close to their vest about what they would do on the TikTok measure, even as they said they recognized the House had sent a powerful signal with its vote on the bill, which passed 352 to 65. The legislation mandates that TikTok’s parent company, ByteDance, sell its stake in the app within six months or face a ban.“The lesson of the House vote is that this issue is capable of igniting almost spontaneously in the support that it has,” Senator Richard Blumenthal, Democrat of Connecticut, said in an interview on Friday. He said that there could be adjustments made to the bill but that there was bipartisan support to wrest the app from Chinese ownership.The slowdown in the Senate means that TikTok is likely to face weeks or even months of uncertainty about its fate in the United States. That could result in continued lobbying, alongside maneuvering by the White House, the Chinese government and ByteDance. It is also likely to prompt potential talks about deals — whether real or imagined — while the uncertainty of losing access to the app will hang over the heads of TikTok creators and its 170 million U.S. users.“Almost everything will slow down in the Senate,” said Nu Wexler, a former Senate aide who worked for Google, Twitter and Meta, which owns Facebook and Instagram. “They’ll need some time to either massage egos or build consensus.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Gerald M. Levin, Time Warner Chief in a Merger Debacle, Dies at 84

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      He was called a visionary in cable television, but his foray into the world of the internet, in a marriage with AOL, proved disastrous.Gerald M. Levin, a “visionary” media executive, as he was often described, who became C.E.O. of the world’s largest media company, Time Warner, and an architect of its merger with America Online, widely considered the worst corporate marriage in American history, died on Wednesday. He was 84.Jake Maia Arlow, a grandchild of Mr. Levin’s, confirmed the death, in a hospital, and said he lived in Long Beach, Calif. No other details were provided. Mr. Levin had been diagnosed with Parkinson’s disease.Mr. Levin was Time Warner’s chief executive when he and his counterpart at AOL at the time, Steve Case, devised what was then the largest business merger in U.S. history. When the deal was announced on Jan. 10, 2000, Time Warner was the world’s largest media company, and America Online was the largest internet company, with a combined market value of roughly $342 billion (the equivalent of about $600 billion today).The merger, creating AOL Time Warner, was heralded as a watershed moment — the union of old and new media, a storied 20th-century American company whose origins could be traced to the publishing baron Henry Luce and the Hollywood boss Jack Warner, hitching up with a Virginia tech company for a ride into the World Wide Web. Instead, it became shorthand for the excesses of the turn-of-the-century dot-com bubble and the era of so-called synergy.Richard Parsons, who succeeded Mr. Levin as chief executive of AOL Time Warner in 2002, said in a phone interview for this obituary in 2022 that Mr. Levin was “one of the smartest guys in the media and entertainment space,” a “visionary” who saw the digital wave coming and understood how the internet would transform Time Warner’s business.“He saw the merger with AOL as making Time Warner digital by injection,” Mr. Parsons said. “What AOL brought to the party was instant access and competence in terms of how to access the internet world.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      House Passes Bill to Force TikTok Sale From Chinese Owner or Ban the App

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      The legislation received wide bipartisan support, with both Republicans and Democrats showing an eagerness to appear tough on China.The House on Wednesday passed a bill with broad bipartisan support that would force TikTok’s Chinese owner to sell the hugely popular video app or be banned in the United States. The move escalates a showdown between Beijing and Washington over the control of technologies that could affect national security, free speech and the social media industry.Republican leaders fast-tracked the bill through the House with limited debate, and it passed on a lopsided vote of 352-65, reflecting widespread backing for legislation that would take direct aim at China in an election year. The action came despite TikTok’s efforts to mobilize its 170 million U.S. users against the measure, and amid the Biden administration’s push to persuade lawmakers that Chinese ownership of the platform poses grave national security risks to the United States.The result was a bipartisan coalition behind the measure that included Republicans, who defied former President Donald J. Trump in supporting it, and Democrats, who also fell in line behind a bill that President Biden has said he would sign.The bill faces a difficult road to passage in the Senate, where Senator Chuck Schumer of New York, the majority leader, has been noncommittal about bringing it to the floor for a vote and where some lawmakers have vowed to fight it.TikTok has been under threat since 2020, with lawmakers increasingly arguing that Beijing’s relationship with TikTok’s parent company, ByteDance, raises national security risks. The bill is aimed at getting ByteDance to sell TikTok to non-Chinese owners within six months. The president would sign off on the sale if it resolved national security concerns. If that sale did not happen, the app would be banned.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      JetBlue and Spirit Call Off Their Merger

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      JetBlue said it would pay Spirit $69 million to terminate the $3.8 billion deal, which had been blocked by federal antitrust regulators.JetBlue Airways and Spirit Airlines announced on Monday that they would walk away from their planned $3.8 billion merger after federal antitrust regulators successfully challenged the deal in court. JetBlue said it would pay Spirit $69 million to exit the deal.A federal judge in Boston blocked the proposed merger on Jan. 16, siding with the Justice Department in determining that the merger would reduce competition in the industry and give airlines more leeway to raise ticket prices. The judge, William G. Young of the U.S. District Court for the District of Massachusetts, noted that Spirit played a vital role in the market as a low-cost carrier and that travelers would have fewer options if JetBlue absorbed it.“We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently,” JetBlue’s chief executive, Joanna Geraghty, said in a statement on Monday. “We wish the very best going forward to the entire Spirit team.”JetBlue and Spirit appealed Judge Young’s decision. JetBlue filed an appellate brief last week arguing that the deal should be allowed to go through.But in a regulatory filing on Jan. 26, JetBlue said it might terminate the deal. Spirit said in its own filing the same day that it believed “there is no basis for terminating” the agreement.The merger agreement, which expired on Jan. 28, could have been extended to July 24 if certain conditions were met. But JetBlue suggested in its filing in January that Spirit had not met some of its obligations under the agreement, giving JetBlue the ability to walk away.As part of the merger agreement, JetBlue agreed to pay Spirit and its shareholders $470 million in fees if the deal was blocked. Some legal experts said JetBlue was potentially positioning itself to dispute the remainder of those fees by terminating the agreement.Spirit is heavily indebted and last turned a profit before the Covid-19 pandemic. Investors see a merger as a lifeline for the company. Its stock price has lost more than half its value since the ruling blocking the merger.JetBlue’s stock nudged up on the same news, as investors see the end of the deal as a cost-saving measure.A merger of the airlines would have given the combined company a bigger share of the market, which is dominated by four carriers — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.Alaska Airlines has also announced plans to increase its size. In December, it said it wanted to acquire Hawaiian Airlines for $1.9 billion. That deal, too, is likely to attract the scrutiny of federal antitrust regulators. More

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      The F.T.C. Boosts Biden’s Fight Against Inflation

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      The regulator’s move to block Kroger’s $25 billion bid for Albertsons could win the president points with voters squeezed by rising prices.Kroger’s “low prices” promise has come under fire after the F.T.C. and a number of states sued to block the supermarket giant’s $25 billion bid to buy Albertsons.Rogelio V. Solis/Associated PressKroger, Albertsons and the politics of inflation A paradox at the heart of the U.S. economy is that consumers are feeling squeezed even as growth indicators look strong — and are taking it out on President Biden’s approval ratings.So the White House probably cheered a move by the F.T.C. and several states on Monday to block Kroger’s $25 billion bid to buy Albertsons, arguing that the biggest supermarket merger in U.S. history would raise prices and hit union workers’ bargaining power.The Biden administration has little influence over inflation, but it’s still getting heat. Consumers are spending the highest proportion of their income on food in 30 years, and an internal White House analysis found that grocery prices had the biggest impact on consumer sentiment.The Fed has jacked up interest rates to a 20-year-high in an effort to cool inflation, but progress on that has slowed in recent months.Biden is blaming big business. In a video released on Super Bowl Sunday, he went after “shrinkflation,” lashing out at companies for reducing packaging sizes and food portions without cutting prices. Biden is expected to reiterate that view in his State of the Union address next month.The president could point to the F.T.C.’s tough approach to M.&A. The agency operates independently, but Lina Khan, the F.T.C.’s chair, has taken the most aggressive and expansive antitrust enforcement stance in decades. That may help Biden’s message with voters that he’s fighting for their interests.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      How Washington May Approach the Capital One-Discover Deal

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      Regulators have been tough on big financial mergers, though there are nuances in Capital One’s $35.3 billion takeover bid for Discover.Capital One’s $35.3 billion bid for Discover is a bet that the movement to go cashless will continue to grow.Rogelio V. Solis/Associated PressChallenges, and opportunities, for a financial megadealCapital One’s $35.3 billion takeover to buy Discover Financial Services will create a colossus in the fast-growing credit card industry and a more powerful force in the payment networks that underpin the consumer economy.That will almost surely invite tough scrutiny from a Washington that is increasingly skeptical of big financial mergers. But continuing scrutiny of the two biggest payment networks in the U.S., Visa and Mastercard, may complicate the regulatory math.The deal: Capital One agreed to pay 1.0192 of its shares for each share of Discover, a roughly 26 percent premium to Friday’s trading prices. Discover’s shares were up more than 13 percent in premarket trading on Tuesday.If completed, the transaction would become a giant among credit card lenders, with Bloomberg estimating that the combined company would outstrip JPMorgan Chase and Citigroup in U.S. card loan volume. (That could ratchet up examinations over shrinking competition, and what that means for consumers.)Perhaps more important is the potential supercharging of Discover’s payment network, which has long lagged Visa, Mastercard and American Express. The Wall Street Journal reported that Capital One plans to switch some of its credit cards to the Discover network.The contrarian argument: This is good for Visa and Mastercard. The longtime giants of the payment network business have long been criticized for their fees, with Visa being investigated by the Justice Department. Monday’s deal could give them the opportunity to argue that they would face a newer, bigger competitor.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Capital One to Acquire Discover, Creating a Consumer Lending Colossus

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      The all-stock deal, which is valued at $35.3 billion, will combine two of the largest credit card companies in the United States.Capital One announced on Monday that it would acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion, a deal that would merge two of the largest credit card companies in the United States.“A space that is already dominated by a relatively small number of megaplayers is about to get a little smaller,” said Matt Schulz, chief credit analyst at LendingTree.Capital One, with $479 billion in assets, is one of the nation’s largest banks, and it issues credit cards on networks run by Visa and Mastercard. Acquiring Discover will give it access to a credit card network of 305 million cardholders, adding to its base of more than 100 million customers. The country’s four major networks are American Express, Mastercard, Visa and Discover, which has far fewer cardholders than its competitors.But consumer advocates pushed back on the possible deal, saying it posed antitrust concerns. “It is very difficult to imagine how federal regulators could allow Capital One to buy Discover given the requirement that mergers benefit the public as well as insiders,” Jesse Van Tol, the chief executive of the National Community Reinvestment Coalition, said in a statement.The acquisition by Capital One will be one of the first tests of regulatory scrutiny on bank deals since the Office of the Comptroller of the Currency said last month that it intended to slow down approvals for mergers and acquisitions.“It’s hard to know which way it would go, but there will certainly be a lot of attention paid to this deal because of the money and magnitude of the companies involved,” said Mr. Schulz.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More