The department today confirmed that it has retained Axinn as an adviser in the MCI WorldCom-Sprint merger.
"We wanted to bring someone on as a consultant who had expertise in this industry, and he will advise us in regards to this particular transaction," said Gina Talamona, a DOJ spokeswoman. "[Retaining Axinn] doesn't mean we have made any decisions about the merger--we are still in the middle of this investigation."
When the merger was first, both companies said they expected the deal--valued at an estimated $129 billion--to close sometime in the second half of next year. But the Justice Department's move may signal that the deal is likely to face even greater scrutiny during the federal review.
Two years ago, Axinn started a lawyer firm, Axinn Veltrop & Harkrider, which specializes in antitrust and other commercial litigation issues. He headed up the antitrust division of Skadden, Arps, Slate, Meagher & Flom prior to creating his own practice.
Axinn is also known for his definitive study of the Hart-Scott-Rodino statute, "Acquisitions Under the Hart-Scott-Rodino Antitrust Improvements Act (Antitrust Trade Regulation Series)," published in 1988.
Some attorneys noted that while Axinn is considered an astute lawyer, he is not perceived as having the presence of a courtroom litigator as has David Boises, who was retained by the DOJ to work on the landmark Microsoft antitrust case.
MCI Worldcom declined to comment on the hiring of Axinn. Both MCI WorldCom and Sprint have said they are confident the deal will be approved, although industry experts have maintained that the combined companies would need to sell Sprint's extensive Internet backbone to win regulatory approval. MCI WorldCom and Sprint are the second and third largest residential long-distance carriers, respectively, in the United States.
The Federal Communications Commission, which will also scrutinize the deal after the DOJ reviews the case, already has hinted that it will give the transaction a grilling. FCC chairman William Kennard went as far as to hint that approval of the merger may be contingent upon the companies shedding some assets.
"It is not uncommon for outside counsels to be brought in to review large mergers," said a source in the telecommunications industry, noting that the SBC Communications-Ameritech merger and the Bell Atlantic-NYNEX merger involved outside counsel review. "It's the largest merger in history. It's not a shock that they bring in someone with those kinds of credentials."
"The Justice Department doesn't retain outside counsels in typical run-of-the-mill cases," said Howard Morse, an attorney at Drinker Biddle & Reath in Washington who specializes in antitrust issues involving high-technology companies. "But they have done so in enough cases over the past five years so that it is not a shock to see them bring in a heavy-hitter on a high-profile matter."
"It certainly means they are taking the antitrust analysis seriously, but I would not read into this move an expectation that the Justice Department was ready to fight in court," added Morse.