WESCO International Acquisition of Anixter International

In August 2020, following an agreement with the Competition Bureau of Canada (CBC), WESCO International completed regulatory clearance of its $4.5 billion acquisition of Anixter International. WESCO and Anixter are two prominent distributors of electrical, communications, and utility components in North America. Compass Lexecon was retained by counsel for WESCO and Anixter to evaluate the competitive effects of the transaction in the U.S. and Canada. After HSR termination in the U.S., the investigation focused on Canada. CBC expressed concerns about potential adverse competitive effects from the transaction in the distribution of datacom products and pole line hardware products.

Compass Lexecon worked closely with counsel to analyze and present the parties’ sales and bid data and to respond to the CBC’s supplementary information request. Compass Lexecon also submitted white papers presenting econometric evidence showing that the presence of the merging parties in certain Canadian provinces had no statistically significant effect on each other’s profit margins. CBC ultimately approved the merger following an agreement with WESCO and Anixter to divest certain legacy utility and datacom assets in Canada, which generate revenues that amount to a de minimis share of the parties’ total revenues.

The Compass Lexecon team was headed by Jonathan Orszag and Aren Megerdichian and included support from Christopher Fasel, Marc Huntley, Linchun Chen, Rob Foley, Todd Bettisworth, Kelvin Huang, Akawin Tanjitpiyanond, Yu Zhu, and Donovan Kaddis. Compass Lexecon worked closely with Ilene Gotts and Emily Samra of Wachtell, Lipton, Rosen & Katz; and Mark Katz, Charles Tingley, and Dajena Pechersky of Davies Ward Phillips & Vineberg LLP.