In a recent tweet, Senator Elizabeth Warren, D-Mass., expressed her support for the Federal Trade Commission’s (FTC) ongoing antitrust probe into the potential acquisition of sandwich giant Subway by private equity firm Roark Capital. The deal, reportedly worth over $9 billion, has raised concerns about a potential monopoly in the fast-food industry.
Warren, one of the leading antitrust hawks in the Senate, commended the FTC for investigating the acquisition, stating, “We don’t need another private equity deal that could lead to higher food prices for consumers.” She also highlighted the potential monopoly created by Roark Capital, which already owns sandwich shops such as Jimmy John’s, McAlister’s Deli, and Schlotzky’s.
The FTC’s probe comes as part of its mandate to ensure fair competition in the market. Under the leadership of FTC Chair Lina Khan, the regulator has intensified scrutiny of mergers and acquisitions, aiming to prevent market consolidation that could harm consumers.
According to Politico, mergers valued at over $111 million typically undergo a 30-day review by the FTC or the Department of Justice. Subway and Roark attempted to expedite the process by requesting an additional 30 days, but their request was denied. The FTC’s investigation will evaluate whether the acquisition gives Roark Capital a dominant position in the sandwich market and potentially leads to higher prices for consumers.
The New York Post reported that a Subway franchise agreement from 2021 identified Jimmy John’s, McAlister’s Deli, and Schlotzky’s as direct competitors within a three-mile radius. This may serve as a focal point for the FTC’s challenge to Subway’s sale.
Roark Capital, known for its portfolio of fast-food franchise brands, including Baskin-Robbins, Dunkin Brands, Buffalo Wild Wings, and Sonic, has not yet provided a comment on the ongoing investigation.
The FTC’s decision on this case will have significant implications for the fast-food industry and competition in the market. As Warren continues to advocate for antitrust scrutiny on high-profile mergers and acquisitions, the outcome of this investigation will be closely watched by industry stakeholders and consumers alike.
Disclaimer: This article is based on publicly available information and does not reflect the opinions or views of all parties involved.
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