Hannah Pittock uses weight-loss company Novo Nordisk’s offer to acquire Metsera to create a three-prong framework by which the antitrust agencies can identify when an invitation to exclude a rival from a market constitutes illegal exclusionary conduct under Section 2 of the Sherman Act.
In the final days of October 2025, Novo Nordisk made a move that stunned both the pharmaceutical and antitrust worlds. With the ink nearly dry on Pfizer’s agreement to buy Metsera, a small biotech company developing next-generation GLP-1 weight-loss drugs, Novo lobbed a last-minute bid. The offer came with an eye-popping $9 billion price tag—nearly double Pfizer’s bid—and an even more eye-popping two-step contractual structure. The contract stipulated first, a multibillion-dollar up-front payment that Metsera’s investors could keep, even if regulators later blocked the deal, and second, a full acquisition down the line if the deal was not blocked.
The fast-growing GLP-1 market is currently a duopoly of Novo and Eli Lilly. Pfizer’s attempts to develop its own GLP-1 product failed, which is why it wants to buy Metsera, whose GLP-1 product has shown promising results while still in the Food and Drug Administration pipeline process. However, to bring its product to market, Metsera requires the resources and legal expertise to navigate the FDA process that only a larger firm can offer. While Pfizer’s purchase of Metsera would almost certainly result in the rapid entry of a competitive product that would disrupt the current duopoly market structure, Novo’s acquisition of Metsera would present obvious and serious concerns of horizontal consolidation.
With this context, the logic of Novo’s offer comes into sharper focus as a “heads I win, tails you lose” play. If Metsera had accepted the up-front cash offer and the merger proposal miraculously survived review by the Federal Trade Commission, Novo would complete its two-step transaction, eliminate an emerging rival, and cement its duopoly with Eli Lilly. Crucially though, even if that merger was enjoined, Novo would still achieve a subtler victory; the covenants in the first step of the contract that accompany the upfront cash payment would make it significantly more expensive, and potentially prohibitive for anyone else, namely Pfizer or Bristol Myers, to step in if and when the FTC blocked the Novo merger within the thirty-month contract period that came with Novo’s offer to Mesera.
Shortly after alleging that the Novo contract violated both the Sherman Act and the Clayton Act, Pfizer countered with a higher bid amounting to about double its initially accepted offer. This last bid appears to have prevailed. But most importantly for antitrust, that ending does not resolve the core issue of whether Novo’s contractual offer itself deserves further scrutiny by the FTC as an attempted monopolization under Section 2 of the Sherman Act, independent of the fact that it failed to block Pfizer.
In Novo’s proposed two-step contractual structure, the transaction would immediately transfer billions of dollars to Metsera’s shareholders in exchange for non-voting convertible stock and impose extensive interim covenants on Metsera’s operations. In essence, the first step is a stand-alone “agreement stage” that could operate for up to thirty months before any Novo merger closes. Only in the second step, contingent on regulatory clearance, would Novo consummate the acquisition and obtain full control.
This unusual first stage, effectively a binding financial and operational arrangement prior to closing, caught the FTC’s attention. Despite the ongoing government shutdown, the FTC sent a letter warning that Novo’s pre-closing covenants and funding mechanisms risked violating the Hart-Scott-Rodino Act’s prohibition on consummating mergers above a certain financial size before agency review (often referred to as “gun-jumping”), exposing the parties to civil penalties and possible unraveling of the contract. Pfizer’s subsequent complaint went further, alleging that even apart from merger-control issues, Novo’s contractual offer itself constituted an attempt to monopolize the GLP-1 markets.
While Steve Salop’s article in ProMarket analyzed the economics of the proposed contract, this article analyzes the legal treatment of its first step. This analysis suggests that against the backdrop of what the parties understood to be a very high likelihood that the FTC would enjoin the ultimate merger, the offer itself may constitute an anticompetitive exclusionary act in violation of Section 2. This analysis suggests that the structure and intent of this type of contract may constitute an anticompetitive “invitation to exclude,” even if the contractual offer is not accepted.
Previous unsuccessful attempts to monopolize
Under the 1993 Spectrum Sports, Inc. v. McQuillan case, an “attempt to monopolize” requires three elements: 1) exclusionary conduct, 2) specific intent to achieve or preserve monopoly power, and 3) a dangerous probability of success in achieving or preserving that monopoly power.
Section 2 of the Sherman Act treats illegal conduct that falls short of actual monopolization but still poses a significant competitive threat. As Swift & Co. v. United States explains, the statute “directs itself against the dangerous probability as well as against the completed result.” The question becomes if Novo’s offer, even though ultimately unaccepted, can constitute an anticompetitive exclusionary act. In other words, can an unsuccessful “invitation to exclude” be sufficient conduct to establish the attempted monopolization offense?
Courts have long condemned collusive invitations even when they fail. In United States v. American Airlines, Inc., former American Airlines CEO Robert Crandall’s phone call famously proposing a truce in the price war with Braniff Airlines was immediately rebuffed and reported to the Justice Department’s Antitrust Division. Although no collusive deal was consummated, Crandall’s initiative was nonetheless held sufficient to constitute attempted monopolization. The United States Court of Appeals for the Fifth Circuit reasoned that such a “uniquely unequivocal” solicitation displayed the requisite intent and, if accepted, would have been “uniquely consequential.” That is, given the market conditions (high joint market share and high barriers to entry), the agreement would have conferred joint monopoly power on the two airlines. The court grounded liability not in the success of the solicitation but in its structure, clarity, and economic consequences if accepted, thereby treating the invitation itself as the exclusionary act.
That reasoning logically extends beyond collusion to other unilateral invitations that, if accepted, would exclude rivals. American Airlines demonstrates that Section 2 liability applies if a dominant firm’s proposal—viewed ex ante—is designed so that the consequence of acceptance is monopoly power and if the proposal itself evidences the requisite specific intent. Notably, Crandall’s call was not an effort to create a monopoly from a fragmented market but to preserve a tight duopoly. Novo’s bid for Metsera fits that pattern: a structured offer whose acceptance would have entrenched duopoly market power, and whose very design makes sense only through the lens of anticompetitive exclusion.
While American Airlines involved what the court called a “naked proposal”—a blunt and unequivocal request to fix prices—the principle it embodies should not be confined to such extreme conduct. The law’s concern is not the brazen language of the invitation but its likely anticompetitive effect. A dominant firm can achieve an analogous and transparently anticompetitive outcome by embedding a coordination or foreclosure mechanism within a contractual offer rather than a phone call. If the structure and foreseeable consequences of the proposal would preserve market power in the same way as would a naked solicitation, Section 2 should apply with equal force. Novo’s bid exemplifies that extension: its complexity and formal legality do not mitigate its exclusionary purpose or likely effect, but rather reveals how modern “invitations to exclude” may operate under the cover of dealmaking.
A new lens: invitations to exclude
Novo’s conduct belongs in the lineage of American Airlines. Where American Airlines involved an invitation to collude, Novo’s offer functioned as an invitation to exclude: a unilateral proposal designed so that its acceptance would preserve the joint dominance and market power of Novo and Lilly by foreclosing rival entry by Pfizer.
Drawing on existing antitrust doctrine and attempted monopolization jurisprudence, I propose a three-part standard for evaluating “invitations to exclude.”
An invitation to exclude constitutes the requisite exclusionary conduct for the attempted monopolization offense when:
(1) the offer makes economic sense primarily as a device to exclude rivals or raise their costs,
(2) acceptance would confer or preserve monopoly power, and
(3) its acceptance is likely.
This three-part “invitation to exclude” framework reconfigures the established antitrust test for determining monopolistic intent and probability of success, as articulated in Spectrum Sports v. McQuillan, to operationalize it for this particular form of conduct. The first prong of my “invitation to exclude” framework, that the offer makes economic sense primarily as an exclusionary device, establishes intent by distinguishing legitimate competition from conduct that sacrifices profits solely to disadvantage rivals. The second prong, that acceptance would confer or preserve monopoly power, tracks whether the company had a high success rate of obtaining a monopoly. It tests the requirement that the conduct is capable of producing monopolization, focusing the inquiry on market structure and competitive effect and serves as proof of specific intent. The third prong, the likelihood of acceptance, functions as further proof of the probability of success. Together, monopolization by acceptance and likely acceptance capture the essence of the established “dangerous probability of success” standard. Combined, these conditions operationalize the traditional Section 2 framework for attempting to monopolize for the context of invitations to exclude, ensuring that liability attaches only when an offer’s structure and purpose reveal an economically irrational strategy that makes sense only through the lens of exclusion.
My framework is also consistent with the version of the attempted monopolization standard articulated in American Airlines. There, the Fifth Circuit emphasized that American’s unlawful solicitation was both “uniquely unequivocal,” leaving no doubt as to its exclusionary or collusive intent, and “uniquely consequential,” such that, if accepted, it clearly would alter market structure or competitive conditions. The first and third prongs of my proposed test, exclusionary economic logic and likelihood of acceptance, capture that uniquely unequivocal intent: they require a clear, deliberate proposal that makes sense only through its anticompetitive purpose. The second prong, acceptance would confer or preserve monopoly power, embodies the uniquely consequential element, ensuring that liability attaches only where the offer, if accepted, would materially enhance or maintain dominance. In this way, the standard articulated above translates American Airlines’ emphasis on clarity and competitive significance into a doctrinally coherent test for unilateral exclusionary offers. It adds a requisite likelihood of acceptance to account for the different treatment under the law each invitation would receive if accepted; while the invitation to fix prices would have been per se illegal if accepted, an accepted invitation to exclude would be evaluated under the rule of reason, hence the higher bar for attempt.
How Novo’s offer fits the frame
The novel structure of Novo’s offer reveals its purpose. Novo offered billions of dollars in advance for non-voting convertible stock that Metsera could keep if regulators blocked the deal, and included covenants restricting Metsera’s spending, licensing, and compensation discretion in the interim. These terms would constrain Metsera’s incentive to seek alternative partners and its ability to innovate independently, even without Novo having full control or a successful acquisition. Evaluation of its contractual offer under the three-prong test articulated above brings its anticompetitive nature into sharper focus.
1. Economic Irrationality Except for Exclusion: Perhaps the most striking characteristic of Novo’s offer is that its structure makes financial sense only if one assumes exclusion as the primary goal. If Metsera believed (as evidenced by its reasoning for its refusal of Novo’s initial offer) that the FTC would be highly likely to block the merger, Novo’s willingness to risk billions it could not recover if it never acquired the target asset defies ordinary business logic. The only plausible payoff was strategic: deterring Pfizer and delaying Metsera’s entry long enough to protect its supra-competitive duopoly profits.
By contrast, if there were a significant likelihood that the FTC would clear Novo’s acquisition, the economic logic would look very different. In this case, making the large up-front payment could be a rational premium for obtaining strategic certainty rather than an exclusionary bet to raise entry barriers. The analysis therefore turns on the ex-ante expectation that clearance was extremely unlikely: as Metsera itself described, the proposal was “very risky.” That assumption is core to the theory of liability. This is because it renders Novo’s willingness to pay billions of dollars up front that it was unlikely to recover irrational but-for its exclusionary payoff. And under the proposed standard, the bid’s structure only becomes an anticompetitive device if the probability of regulatory approval falls low enough that a profit-maximizing firm would not proceed but-for the strategic value of deterring or delaying entry.
Salop’s hypothetical comparison makes this logic concrete. He models a monopolist (Firm M) paying an upstream Firm U for a contractual promise not to sell an input to a potential entrant Firm E. Even though Firm M derives no productive use from the input, paying Firm U raises Firm E’s costs so high that entry becomes unprofitable. Novo’s bid operates on the same logic, but the mechanism depends on timing. By bidding only days before Metsera was to close with Pfizer, Novo created the potential of a multi-billion dollar exclusionary “entry tax,” but that barrier would only have crystallized if Metsera first had accepted Novo’s offer and taken the advance payment. Because Pfizer countered before the deal was signed and funds changed hands, it avoided the need to make up that payment and thus escaped the anticompetitive exclusionary effect. In other words, the offer’s design, not its consummation, embodied the exclusionary strategy: Novo’s willingness to propose a deal that would have imposed prohibitive costs on its rival if Metsera had accepted Novo’s “invitation to exclude.”
2. Preservation of Monopoly Power: Novo and Eli Lilly currently share a lucrative duopoly in GLP-1 weight-loss drugs. Pfizer’s planned acquisition of Metsera represents the most credible new entry into this rapidly growing market. Had Novo’s bid not been immediately topped by Pfizer before Metsera agreed to the exclusionary conduct and received the advance payment (i.e., which would have dramatically raised Pfizer’s minimally acceptable counteroffer), it would have kept that duopoly intact. The offer’s restrictive covenants also would have blunted Metsera’s ability to compete independently. In other words, the first step of Novo’s offer, if accepted, would have preserved Novo’s joint dominance and duopoly market power, even if the second step of the transaction, actual acquisition, never materialized. As Salop described, Novo’s up-front payment amounted to the purchase of an exclusionary right.By making Metsera unacquirable and financially entangled for thirty months, Novo effectively would have paid for the benefit of continued dominance.
3. Likelihood of Acceptance: Metsera’s board initially did indicate that it would accept Novo’s proposal absent it being further topped by Pfizer, evidence that the terms made acceptance not merely possible but highly probable. The combination of a higher price, the immediate payout, and the indemnification against legal risk effectively overrode the board’s prior conclusion that a Novo merger was untenable for regulatory reasons. The terms that the advance payment must be refunded to Novo in the event that Metsera accepted a subsequent counteroffer transformed the offer into an exclusionary contract that raised barriers to entry by dramatically raising a rival’s minimally acceptable counteroffer that would apply even after the Novo merger was blocked by the FTC. While Metsera did not accept Novo’s invitation in the end, acceptance of the terms of its offer would have prevented entry if accepted, and its acceptance was clearly likely absent the threat of action by the FTC and the immediate topping offer by Pfizer before Metsera signed the Novo contract.
In this way, Novo’s conduct fits the doctrinal frame precisely. The acceptance was likely; success would have maintained market power; and the deal structure was rational solely as an exclusionary device that likely would dramatically raise its rival’s costs and deter or substantially delay competitive entry.
Ex ante dangerous probability
If the FTC continues its investigation into Novo’s offer or Pfizer relies on this attempt logic in its antitrust case, Novo might argue that Pfizer’s ultimate win disproves any “dangerous probability of success.” But the proper inquiry is ex ante, not retrospective. As American Airlines held, what matters is whether the conduct, at the time it occurred, posed a genuine risk of monopolization (“When evaluating the element of dangerous probability of success, we do not rely on hindsight but examine the probability of success at the time the acts occur.”) On October 31, 2025, that risk was palpable. Novo held a 50% market share in the GLP-1 market, Metsera was a singular competitive entry threat if it obtained a well-financed pharmaceutical partner, and Pfizer’s deal was poised to close until Novo intervened with its invitation to exclude. Novo’s offer had a high likelihood of acceptance and anticompetitive effect until Metsera’s board switched sides in the face of the FTC’s threat before Pfizer’s counterbid. That near-miss itself demonstrates “dangerous probability.” To dismiss an attempted monopolization claim because the defendant ultimately failed—particularly failed in the shadow of likely governmental action—would dramatically weaken the attempted monopolization offense.
Section 5 of the FTC Act
In addition to the Sherman Act, these “invitations to exclude” fall squarely within the FTC’s authority under Section 5 of the FTC Act, which prohibits “unfair methods of competition.” Section 5 has long been recognized as reaching invitations to collude. The FTC has repeatedly used Section 5 to condemn such solicitations on the ground that they threaten competitive harm even if the invitation is declined. The same logic applies to exclusionary invitations: a dominant firm’s offer that would preserve or enhance monopoly power if accepted poses precisely the same kind of incipient competitive harm that Section 5 was designed to interdict and deter. Recognizing “invitations to exclude” as falling within the ambit of Section 5 simply extends the Commission’s established doctrine to include exclusionary as well as collusive solicitations. Doing so closes a doctrinal gap that otherwise is likely to be increasingly exploited by dominant firms attempting to deter procompetitive mergers by small competitors or entrants.
Conclusion
Novo’s failed invitation to exclude highlights a new exclusionary tool for dominant firms and oligopolists with substantial market power: “killer non-acquisitions” designed to block or delay competitive entry despite never closing. If regulators treat such schemes as mere contract-law curiosities, incumbents will replicate them. The next dominant firm facing disruptive entry also could simply structure its offer to make a non-refundable payment in advance, knowing this termination cost is outweighed by the benefit of deterring rival entry.
Attacking these invitations to exclude as attempts to monopolize that violate Section 2 would achieve deterrence. It would affirm that exclusionary offers, whether cast as “strategic merger and acquisition innovations” or “risk-sharing structures,” fall squarely within the attempted-monopolization framework. It would also clarify that “dangerous probability of monopolization” is judged when the dice are thrown, not after.
In American Airlines, the court condemned an invitation to collude. Novo Nordisk’s bid for Metsera should be understood as its fraternal twin: a clear invitation to exclude, an economically irrational but strategically potent offer, acceptance of which would have entrenched monopoly power.
Section 2’s language makes clear that the law need not wait for the harm to be completed. When dominant firms design offers that make sense only as mechanisms of exclusion, the law should recognize the attempt for what it is and act accordingly. Novo’s “heads I win, tails you lose” proposal fits that bill. Enforcing Section 2 here would not punish aggressive bidding; it would protect the competitive process from being gamed by financial engineering.
Author Note: The author is grateful to Professor Steven Salop for his mentorship and advice for this article.
Author Disclosure: The author reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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