The U.S. Department of Justice began a new investigation to research anti-competitive practices between private equity firms, the Wall Street Journal reports. A number of companies, including Silver Lake Partners and Kohlberg Kravis Roberts, received document requests from the DOJ regarding buyout deals, but to date its unknown if these requests will result in any action. Though the industry has long involved buyouts of large corporations, the government is concerned that the formation of buyout groups is influencing companies and causing some that might have bid to shy away. But, the government may also fear the existence of information sharing among bidders, thanks to the presence of buyout teams. Concerns would stem from the conjecture that companies could potentially agree to withdraw bids on the premise that they be allowed to join the winning team toward the end of negotiations. According to the WSJ, it has become somewhat commonplace for competing firms to retreat once another p.e. firm has signed a merger agreement. However, in a recent speech, Carlyle Group co-founder David Rubenstein implied that what some may consider anticompetitive behavior others interpret as mature behavior, “It has been civil and I expect it to remain so.”
