Fourth Circuit Affirms Decision Requiring Divestiture In Private Antitrust Case

On February 18, the Fourth Circuit affirmed a district court decision ordering a divestiture in a private merger challenge. Although the FTC and DOJ have successfully challenged a few closed transactions, the Jeld-Wen decision marks the first time that a private business has obtained an order to unwind a consummated merger.

The case involves a 3-to-2 merger between two vertically integrated firms—Jeld-Wen and CMI—that sell both doorskins (the outer casing of a molded door) and finished molded doors. The challenge was brought by Steves, a finished door competitor that relies on third parties to supply its doorskins. Describing the case as “a poster child for divestiture,”¹  the Fourth Circuit affirmed the district court's order requiring Jeld-Wen to unwind the merger and auction off the business it acquired.²