The FTC and the Justice Department aren’t backing down from the antitrust fight

A new road map for vetting deals

The Justice Department and Federal Trade Commission announced their long-awaited merger guidelines on Wednesday morning, and the proposed regulatory framework shows that the regulator has not let up on its aggressive approach despite losing a series of court cases trying to block the transaction. are changing.

Regulator under President’s Administration lyndon johnson set new guidelines, which function largely as a matter of policy intent as they are not enforceable by law. But the sweeping proposals introduced by FTC Chairwoman Leena Khan and the Justice Department’s top antitrust official Jonathan Cantor have one key distinguishing feature: for the judges to sift through footnotes about case law to understand the regulators’ more progressive views on trustbusting. a road map. – a clear rebuttal to those who say the strict approach is not based on US rules.

The guidelines broaden the scope of valuation of deals. Regulators say that the existing laws are not suitable for the contemporary era. “We are updating our enforcement manual to reflect the realities of how companies do business in the modern economy,” Ms Khan said in a statement. He said these proposals would give the FTC “the mandate given to us by Congress and the precedent on the statute books.”

The guidelines look at how large influential platforms can use their scale to consolidate market power and eliminate emerging competition. (Critics of this approach argue that it is nearly impossible to know what threats young technologies may pose in the future.)

The proposals also suggested that the regulator assess the cumulative impact of multiple deals, which could have an impact on the private equity industry. And the guidelines aim to examine how the deals affect not just consumers but employees as well.

The new rules continue the Biden administration’s broader fight against consolidation, “Competition is at the heart of capitalism,” lel brainard, the director of the National Economic Council said in a speech this month. Along with new merger rules, the White House on Wednesday announced a new enforcement group to crack down on price gouging in food and agriculture markets.

Can regulators sway the courts in their favor? Regulators have had some success in cracking down on deals, but courts have often disagreed with their views on deal making. The FTC and the Justice Department have lost several cases, most notably Microsoft’s move to block its $70 billion acquisition of Activision Blizzard.

What will happen next? The guidelines will be subject to a 60-day comment period. In addition, the agencies must persuade the courts to agree with their interpretation of precedent. And deal makers must decide which battles they are prepared to fight.

What’s going on over here

Meta and Microsoft team up on AI The social media giant will distribute a version of its technology available for free to commercial users through Microsoft’s Azure cloud computing platform for the first time. microsoft too $30-per-month AI subscription launched For its Word, Excel and Teams users, shares hit record highs on Tuesday.

Senators plan to propose stock-ownership limits on lawmakers and federal officials. An upcoming bill from Democrat Kirsten Gillibrand of New York and Republican Josh Hawley of Missouri would bar legislators, their aides, the president, vice president and executive branch staff. owning individual stockEven in blind faith, according to the Wall Street Journal. The move comes amid a growing public outcry over policymakers holding shares in companies they regulate.

Donald Trump says he is likely to face another federal indictment. The former president revealed he received a purported target letter from Jack Smith, the special counsel investigating him over efforts to overturn the 2020 election results. It is unclear how the new criminal charges will affect Trump’s standing in campaign polls or fundraising.

The UK antitrust regulator has provisionally approved Broadcom’s acquisition of VMware. The Competition and Markets Authority found that its $69 billion acquisition of enterprise software maker, VMware, competition will not decrease, The agency is still negotiating possible changes to their $70 billion deal with Microsoft and Activision Blizzard after taking steps to put it on hold.

Michael Moritz leaves Sequoia

Michael Moritz, who built a legacy as one of Silicon Valley’s leading venture capital investors, is leaving Sequoia Capital after nearly 38 years. The company’s managing partner, Roelof Botha, announced the news to its limited partners this morning in a memo, which has been seen by DealBook.

Mr. Moritz details the early days of the Internet. He was a reporter at Time magazine and became the San Francisco bureau chief at a time when some of today’s tech giants were starting out. His work included books about Steve Jobs and Apple.

The venture capitalist got some big wins. He joined Sequoia in 1986 and led its investments in companies including Google, Yahoo, PayPal and Stripe. He has served as a partner – he left in 2012 after revealing he had been diagnosed with an unspecified medical condition – and left daily management in the chair.

Mr. Moritz is focusing on Sequoia Heritage, wealth management unit Moderated in part by Mr. Moritz and Doug Lyons, former global managing partner of Sequoia. Mr Botha said Mr Moritz would continue to represent the firm in some companies but would be replaced on the board over time.

His departure is the latest change at Sequoia. The company announced last month that it would split into three separate partnerships, spin off its China business and spin off its India and Southeast Asia operations. The US and European businesses will retain the Sequoia brand.

Is Kim Kardashian’s Clothing Brand Preparing To Go Public?

Clothing brand Skims, co-founded by Kim Kardashian, has raised $270 million in its latest fund-raising round, DealBook’s Michael de la Merced reports, valuing the company at $4 billion.

This is yet another achievement by the four-year-old company to help it maintain its rapid growth. But it also raises the question of whether Skims is preparing itself for another milestone: an IPO.

Skims have grown rapidly. The company, which is now profitable, is on track for sales of $750 million this year, up from $500 million in 2022. This was largely driven by its expansion beyond shapewear into loungewear, swim and more.

The company, which got its start in e-commerce, is also pushing into physical retail: After opening outposts inside stores including Nordstrom and Saks, it plans to open flagship locations in Los Angeles and New York next year.

The round was led by Wellington Management, An asset manager known for investing in start-ups about to go public, The latest round takes the total funding raised by Skims to $670 million.

Ms Kardashian – who was certified a billionaire following the 2021 investment round – is still the company’s biggest shareholder; He and the company’s CEO Jens Grede jointly hold a majority stake.

The IPO of the company is likely to come in the future. In addition to bringing on Wellington — whose entry into a company’s cap table almost always precedes a public offering — Brand has taken other steps in line with many start-ups that eventually led to stock sales, including hiring a CFO. is included.

Mr. Grede declined to say when Skims would go public — “we’re certainly in no rush,” he told DealBook — but said stock market investors had recently shown interest in consumer-facing businesses. Is. And he said the IPO remains a goal: “At some point in the future, Skims deserves to become a public company.”

A major investigation on and from Tesla’s board

As Tesla continues to face questions about its corporate governance from Senator Elizabeth WarrenElon Musk’s car company has agreed to this pay $735 million To settle an inspection dispute.

proposed paymentOne of the largest of the shareholder derivatives lawsuits is to settle Detroit police and fire retirement funds’ allegations that the electric car maker was overly indebted to its CEO — and, according to the plaintiffs, “excessively” owed its board. paid more. Result.

The lawsuit accused Tesla’s directors of failing to provide proper oversight. From 2017 to 2020, when the lawsuit was filed, by paying “unreasonable and excessive compensation” (both in cash and option grants) to its members, the board deprived shareholders of significant amounts of money belonging to the company. It said a majority of independent Tesla shareholders rejected changes to director pay in 2014 and 2019.

The lawsuit also accused Mr Musk of stacking the board with friends and family, ensuring his desired results and avoiding independent oversight. The defendants in the lawsuit include Musk himself; his brother, Kimbal Musk; Robin Denholm, President of Tesla since 2018; James Murdoch, current director; and former board members Antonio Gracias, Stephen Jurvetson and Larry Ellison.

Tesla denies wrongdoing in court filing stating that its directors had acted in good faith, but agreed to a settlement to end costly litigation. As part of the proposed settlement, the defendants agreed not to take any compensation for 2021, 2022 and 2023, and the company will provide investors with more information on how it comes up with board compensation proposals.

There is one matter on which there will be no settlement: Mr. Musk’s $56 billion pay package, which is the subject of a separate lawsuit that may soon be decided.

Caravana secures a loan lifeline

Carvana has announced a debt-restructuring agreement aimed at reducing its rising interest payments and helping it avoid bankruptcy, as the once high-flying online auto dealer grapples with slowing sales and a declining stock price .

Caravana has made a big bet in the sale of used cars. This acquired a car auction business to $2.2 billion in May 2022, just as the Fed was raising interest rates. caravan sale There has been a sharp decline since thenThe company was left with an inventory glut and large losses.

Neil Boudet and Joe Rennison of The Times report on Caravana’s debt deal, adding that the company will also issue about $350 million of new stock.

Its shares jumped nearly 25 percent in premarket trading.

read speed

deal

• Giant company Blackstone is ready to invest Reach $1 Trillion in Assets Under Management, despite an investigation in recent months over troubles at one of its wealth funds. (ft)

• middle eastern sovereign wealth funds Private equity funds including KKR, EQT and Brookfield have pumped in billions to help, as other funding dried up. (Bloomberg)

• vanmoofThe Dutch maker of a popular range of electric bikes that raised $128 million two years ago has filed for bankruptcy. (ledge)

artificial intelligence

• Over 8,000 writers signed a letter to tech CEOs asking them not using their work To train your AI tools without compensation. (WSJ)

• SEC Chairman Gary Gensler Is Worried That AI Can Create Tools herd mentality among investors Due to which financial crisis can arise. (insider)

best of the rest

• “How Dubai Was Made.” The ‘new Geneva’ for Russian oil business, (ft)

• Gucci’s CEO, Marco Bizzarri, is stepping down amid turmoil at luxury conglomerate Kering, the brand’s parent company. (NYT)

• Angelo Mozzilo, who turned Countrywide Financial into a mortgage company before becoming infamous for its role in the 2008 financial crisis, died Sunday. He was 84 years old. (NYT)

We need your feedback! Please email ideas and suggestions to dealbook@nytimes.com.