Chapter 1: What is the main topic discussed in this episode?
Bloomberg Audio Studios, podcasts, radio, news. Welcome to our Bloomberg TV and radio audiences around the world. A recurring theme of recent tech M&A has been deals to bring in talent in so-called acquihires. The Federal Trade Commission is taking notice. One member of the FTC warned Thursday that these, quote, creative deal structures could raise antitrust concerns.
Let's discuss and delighted to welcome Andrew Ferguson, chairman of the FTC to the program. We cover the topic of acqui-hires on Bloomberg Tech regularly. It was a mainstay story in 2025. When does a talent deal stop being a talent deal and become more than that, become a merger? What are the rules-based approach that the FTC would take, chairman, to look at that?
Yeah, so we are examining ā look, acquihires have been around, especially in the sort of startup founder space for a long time.
Chapter 2: What are acquihires and why are they significant in tech M&A?
And they've gotten bigger basically in the last admin. And a lot of people were of the view that these things were sort of being constructed in these big deals to try to escape admins. Hart-Scott-Rodino review, which is pre-merger antitrust review in the United States, because the Biden administration was trying to block all deals, and I think generally they were. That isn't necessary anymore.
We don't need clever workarounds around antitrust review anymore, because at the FTC under the Trump administration, you get a fair shake. I'm not saying your deal will go through. I've sued to block several deals this year and I've won those cases. But if your deal is not illegal, we get out of the way and sort of let the market take care of things.
So we are beginning to examine that the HSR Act has a provision that says you're not allowed to structure deals in order to escape pre-merger review.
Chapter 3: How is the FTC addressing antitrust concerns with acquihires?
And so we are beginning to examine these acqui-hires to make sure that they aren't an attempt to get around HSR review. But The message I want to send sort of to Silicon Valley and to the M&A infrastructure generally is you don't need to structure deals as a clever attempt to get around pre-merger review. You'll get a fair shake at the FTC.
Deal may not go through, but if your deal is legal, I will get out of your way very quickly. And if it's not, I'll take you to court and I'll fight to win there. We're not going to let the process be the punishment anymore. But, you know... It is important to us to make sure that people aren't going to use clever deal structures to get around pre-merger review.
The language of clever or creative deal structures that I cited at the beginning of our conversation was from your colleague and fellow commissioner, Mark Mador, who was speaking at a conference in California yesterday.
I think what the industry hopes to understand from you is what the threshold is or what the set of rules would be where a hiring proposal situation should be reported to antitrust authorities. It should be, yeah, as simple as that. It should be by rope reported.
Yeah, and we are beginning to examine how these deals work. Acquihire deal structures vary from deal to deal, and so there wouldn't necessarily be sort of a one-size-fits-all rule. But we are beginning to examine these big acquihire deals that raise a lot of attention so that we can understand when an acquihire is in fact an acquisition that might be covered by the pre-merger review laws.
And when it's not, and we need to understand them before we're sort of out there telling people what the rules are. But this is, you're right, this has become a big enough deal that we are beginning to look very closely at how these things work, including determining whether we need to promulgate additional guidance here in the coming months about how we understand these acquihires.
Is there a factor that matters more to you, the number of employees hired or putting a value on the intellectual capital or the competitive advantage that such a transaction would give the acquirer?
So the value that matters for HSR is set by the statute. That's not really here or there. But the HSR Act applies to deals where assets or stock are being purchased. And that's what triggers HSR review.
And so what we need to understand, which is why we're beginning to examine this question now, is when does an acqui-hire involve the acquisition of assets or stock in a way that would trigger the statute? Look, at the end of the day, I'm a lawyer and a law enforcer, and I enforce statutes, and those statutes have texts.
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Chapter 4: What rules does the FTC follow for reviewing acquihires?
And is anything being structured as an attempt to circumvent review? But I'm not here to say this is what the rules are. There will be hard and fast, clear rules. There aren't even for the ordinary deals. We've got the HSR Act and the HSR rules. But deal structures, even in ordinary M&A, vary widely. And so we have to apply the text that Congress actually wrote to specific deals.
But acqui-hires have become frequent enough and large enough that we are beginning to look at how we can the appropriate way to apply the law that Congress actually adopted to acquihires.
It's not my job as an enforcer to sort of fit square pegs into round holes, but it is my job to make sure that the will of Congress, which is the will of the people at the end of the day, is being followed, and that's what we're here to try to do. We're trying to figure out how that applies in the case of acquihires.
Chairman, how common is this in the field of artificial intelligence, or how often is this particular scenario arising and crossing your desk from the AI industry?
We've seen a couple in the last 12 months. My understanding is that the act we hire sort of structure, if you want to call it that, where a firm acquires a lot of the talent in another firm is pretty old, it's been going on for a long time, but it often involves very small firms.
And I think the reason that a lot of people are starting to notice it is because now it involves much larger firms and the sort of price being attached to obtaining the talent into licensing IP is in the billions. So I've definitely seen a couple in the AI space this year, which is what has attracted a lot of the attention.
And it's why we're beginning to try to examine how are these working and how does the law that Congress passed governing pre-merger review actually apply here. As well as the provision in the pre-merger review law that says you can't structure a deal in order to try to escape HSR review. So that is what we are trying to understand now. But certainly, I mean, you all have reported on them.
You can read about them in the Wall Street Journal. It's definitely true that there have been a couple of these big ones in the AI area.
Yeah. You're live with us on Bloomberg Television, Bloomberg Radio around the world. We're speaking to Andrew Ferguson, chairman of the FTC. I think the biggest case study of late, just to give an example of the structure, is NVIDIA and GROK.
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Chapter 5: When does an acquihire trigger pre-merger review under the HSR Act?
If you are violating the Take It Down Act, you are going to hear from us and we are going to be ready to do it. This is incredibly important legislation. I'm really excited that the FTC has a role in this. I lobby Congress very heavily to make sure that we had enough money to get this program off the ground when it takes effect in the middle of this year.
We are getting that money and we will be ready.
Chairman, President Trump has nominated David McNeil to the commission. Our audience have asked me to ask you your thoughts on that. Someone perhaps without antitrust experience, a legal experience, commission experience, and somebody, you know, frankly, with high net wealth. Your thoughts, please.
Look, I am generally of the view that Washington has too many lawyers. I think it is great that the president has decided to nominate someone who isn't a lawyer, who doesn't sort of think in the pathways that lawyers always think. I think it's great that the president has nominated, you know, I've never met Mr. McNeil. I've talked to him a little since the nomination.
The man is a true American patriot. He's created thousands of jobs in this country. He has been one of the most outspoken proponents of manufacturing here in America. That has been one of the president's principal economic priorities is to make sure we make and build things in America. David McNeil has done that. He has been successful in doing that.
And I think it's great that there is going to be sort of someone with that perspective who isn't coming at this like I am from fancy law schools with a long sort of litigation and law enforcement background. He's coming at it as a job creator, as a wealth creator, and as one of the most outspoken proponents of manufacturing in America that there is in this country. Is it an unconventional pick?
Yeah, of course it is. But part of what has made President Trump so successful is that he doesn't always think in the conventions that govern D.C. And I think that this is a really, really good idea to bring someone with Mr. McNeil's perspective here to the commission.
Chairman, the major concern for the consumer right now is affordability. What is the FTC able to do on pricing pressure, bringing prices down, addressing that consumer concern?
Yeah, I mean, it's one of my main concerns, too. We're doing a lot on this front. On the merger review front, my first two merger enforcement actions were in the health care space. We just won one of those health care enforcement actions last week and several months before.
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