The number of merger control regimes worldwide is on the rise: there are already over 120 and the list is growing
In 2018, we saw far more active enforcement, with many regulators using market intelligence and international co-operation to identify unnotified deals. Filings can now be triggered even where the target has limited or no connection to the jurisdiction, and a corporate culture of full global compliance means that deal-doers need to consider early on where filings need to be made and factor these into the deal timetable. Timetables for review vary widely and can be very lengthy in some jurisdictions, even for a first phase review.
We are also seeing regulators intervening more in deals to extract remedies from parties (and, in the worst cases, to block deals where no suitable remedies can be agreed). There is a growing trend for regulators to request many more internal documents from deal parties in these cases. We have also seen regulators focusing on the impact of a deal on innovation/R&D competition, in addition to the impact on existing market competition.
As well as issuing more fines for failure to notify and the provision of inaccurate information in merger filings, regulators have also started to focus more on verifying that the buyer does not start to exercise control over the target assets while awaiting the outcome of the merger review, a practice known as gun-jumping.
This makes it more important than ever in 2019 for market participants to identify any potential merger control issues up front and plan carefully how to deal with them on a global basis. Key to this process will be anticipating how competitors could react – complaints will inevitably mean a closer review.
"Anti-trust regulators are confidently and proactively asserting their powers and showing their appetite to intervene in transactions. They are also more willing than ever to sanction those who get the process wrong."
High value procedural fines
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© Herbert Smith Freehills 2021