Antitrust Reviews of Mergers and Acquisitions, Outside the United States


Antitrust Reviews of Mergers and Acquisitions, Outside the United States

Globalization has had profound effects on the antitrust aspects of transactions. Over the past decade , I have been involved with increasing frequency in transactions reviewed by antitrust authorities outside the United States. This arises in several ways.

First, many transactions involve companies with operations in many countries . In addition to having to comply with the US antitrust laws, there are antitrust merger filing obligations in dozens of countries around the world. My colleagues and I advise companies on the issues initially, identifying which jurisdictions may require filings and whether there are likely to be serious substantive issues, and retain (or help the client to retain) local counsel in the appropriate jurisdictions. We work with local counsel to assure that the clients position is presented most effectively and in a manner that is not inconsistent with positions taken in other jurisdictions (unless justified by different market facts in the two jurisdictions, as sometimes happens). In transactions that are reviewed by multiple competition authorities, we normally serve as lead global antitrust counsel for the transaction, representing the client before the US agency and working with one or more foreign law firms on the merger review process abroad.

Second, I am consulted increasingly in deals that raise no US antitrust issues but may create concerns in jurisdictions abroad. I normally serve as the clients liaison with foreign antitrust counsel, helping to ensure that foreign counsel get the information and assistance they need in terms of filling out pre-merger notifications and presenting relevant facts to the competition authority. I am involved in determining the strategy and substantive arguments that are employed to get the deal through.

The EU is the foreign antitrust authority that I deal with most frequently. I have been involved in many EU pre-merger filings and a number of extensive investigations including two full merger review hearings conducted by DG-Competition, the staff of the European Commission in competition law matters. The EU antitrust pre-merger notification law, which is referred to as the Merger Regulation of the European Communities (ECMR), came into effect in 1991, and the EU authorities have been increasingly active in the merger area since.

If a proposed merger exceeds the relatively high worldwide and EU revenue thresholds established by the ECMR (basically, 5 billion euros in combined worldwide revenues and 250 million euros of EU revenues for each party, although there are lower alternative thresholds which are still substantial), then it is important from the outset to explain to the client the merger review process in the EU, which differs in a number of significant respects from the US merger review process. The EU employs a far more burdensome merger form than the US, and this form (referred to as Form CO) is transaction specific, meaning that most of the information called for cannot be assembled in advance of any specific transaction, so that acquisition minded companies are not able to prepare a filing relatively quickly once a specific transaction is being pursued (the reverse is the case in the US). The EU staff reviews the extensive information provided in the Form CO and typically requires even more information before the filing is deemed sufficient and the timetables for the merger review begin to run. The EU process includes a first phase of review that is roughly analogous to the review conducted in the US in the first HSR waiting period, and then the EU determines whether the transaction should be subjected to a much more intense review in what is referred to as second phase. If during the course of second phase, the deal continues to be viewed as problematic , the staff will issue a statement of objections (to which the parties may respond), and then will conduct a hearing at which the EU staff will lay out their concerns about the merger and then listen to presentations by the parties and interested third parties. Ultimately, the Commission will issue a final decision blocking the transaction or allowing it to proceed with or without remedies. There are provisions under the ECMR whereby the parties can offer remedies in either phase 1 or phase 2.

The EU process, like its counterpart in the US, is quite extensive and time consuming. There are, however, a number of important procedural differences with the US process.

First, the review is far less document and data intensive . Although the EU asks for a good deal of information from the parties, there is no analogue to the HSR Second Request.

Second, the tools that DG-Competition employs in its investigations are generally less intrusive than those employed by the FTC and DOJ. For example, the EU seeks information from parties and third parties principally through written requests (so-called Article 11s) and doesnt employ the civil investigative demands for documents and sworn deposition testimony that are frequently used by the FTC and DOJ. Under reforms slated to go into effect in May 2004, the EU will acquire enhanced investigative powers in merger cases.

Third, the EU timetables are relatively certain. Once a filing is deemed sufficient to begin the process, which can take a month or in some cases even more, the EU Commission must decide the matter within first phase time period of roughly one month (25 working days effective May 2004) or trigger second phase, which must be completed within an additional period of about four months (90 working days effective May 2004).

Finally, the EU can block a transaction on its own, subject to judicial review that in the most expedited cases normally takes one to two years to complete. The transaction cannot be consummated prior to then. By contrast (and as noted above), the FTC or DOJ have no power to stop a transaction on their own, but instead must seek a preliminary injunction to block a deal.

I have been involved in extensive investigations by the antitrust authorities with a number of other foreign competition law authorities most notably in Canada, the United Kingdom, Australia and Venezuela. My colleagues and I have worked on merger review filings in dozens of other countries. Each countrys enforcement authority is different, and one needs to work closely with local counsel to effectively represent the clients interests.




Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
ISBN: N/A
EAN: N/A
Year: 2004
Pages: 102

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