The Booz Allen Hamilton Holding Corporation building in Los Angeles.
Photo:
mike blake/Reuters
Hard to believe, but the Biden antitrust squad is having a worse season than the Washington Nationals did. The Justice Department recently lost its third merger case in a month. This is what happens when the government swings for the fences and brings lawsuits that lack merit.
The government traditionally hasn’t gone to court to challenge mergers unless it’s reasonably confident it can win. Justice also usually tries to address competition concerns with conditions on mergers such as asset divestitures. But the Biden Justice Department is choosing litigation first at the risk of striking out, and is it ever.
A federal judge last week declined to block Booz Allen Hamilton’s acquisition of the cybersecurity and intelligence firm EverWatch. Justice argued that the two companies were competitors for a National Security Agency five-year contract before Booz Allen proposed a $440 million “merger-to-monopoly” that would guarantee it won the procurement order. What monopoly?
Unlike weapons contracts in which competition is concentrated, hundreds of companies compete for government technology contracts. Booz Allen made a compelling case that the acquisition would accelerate its delivery of classified software to the government.
The contract also would yield a mere $17 million in profit, which is small compared to the size of the deal and other government contracts. Booz Allen said the tie-up would make it a stronger competitor for large NSA contracts against the likes of
Raytheon, Peraton and
Underlying the Justice lawsuit is the modern progressive belief that companies should never be allowed to buy potential rivals even if the mergers increase competition and benefit consumers. This flies in the face of the longstanding “rule of reason” standard…
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