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Everybody Wants to Rule Your Deal – A Practical Guide to International Merger Control Dave Anderson Partner, Berwin Leighton Paisner LLP Brussels 9 October, 2007 [email protected]
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Everybody Wants to Rule Your Deal – A Practical Guide to International Merger Control
Dave AndersonPartner, Berwin Leighton Paisner LLP Brussels9 October, 2007
Initial questions…
Is everybody trying to rule my deal?Why is everybody trying to rule my deal?Who is trying to rule my deal?– Jurisdiction
What do we have to tell them?– Notification
How do I deal with all of these bodies trying to rule my deal?– Process and timing
Agenda for today
Merger regimes worldwide – common features
Around the world tour of major regimes – EMEA, Asia-Pacific, Americas
Handling international merger control– Where: jurisdictional information needed/filing decisions– What: notification requirements– How & when: process and timing
Q & A
Reception
Merger control regimes – common features
Jurisdiction – thresholds & exceptionsNotification – contacts & forms (Brussels effect)Buyer usually files/responsible for filingFeesSuspension of closing/implementationInvestigations– Phase I/phase II and duration– clear/block/change deals
• unwind, divestments, other commitments– Powers - failure to file on time, failure to reply to information
requests, complete without clearance
Appeals
Around the world in minutes – Jurisdictional thresholds– Procedure
EMEA, Asia-Pacific, Americas
The ICN – Guidelines and Recommended Practices– Training officials
The good, the ok and the ugly
EMEA (1)
EC Merger Regulation – European Commission
EU Member States
EMEA (2)
Switzerland
Israel
Russia
South Africa
Turkey
Ukraine
Asia-Pacific
Japan Korea Australia and New ZealandWelcome to the club– China – New Anti-monopoly law – comes into
force 1 August, 2008– India – New Competition Act due to come into
force by mid-2008 – including mandatory merger notification
– Singapore – voluntary; market share tests
More good, less ugly – the ICN effect
ICN Guidelines and Recommended Practices on mergers – major multilateral milestoneReform successes – e.g., Belgium, Brazil, Czech, Estonia, Finland, Greece, US, KoreaOverall RP implementation– 2004 – less than 10% of ICN members had made changes– 2006 – 50% of ICN members with merger control regimes
had made changes; seven planning changes– Major jurisdictions are leading by example – US, EC, Brazil
Peer pressure Training new/young agencies/officials
Your deal – practical guide
Where: filing decisions
What: notification requirements
How & when: process and timing
Substantive assessment– market power– public interest
Where - jurisdiction
Deal-type/concentration analysis – Mergers, acquisitions, disposals– Watch - JVs, minority stakes, assets, outsourcing
Thresholds – Turnover – main tool– Market share– Asset value
Exceptions and special sectors
Buyer v.s. seller
Where - turnoverCalculation - general rules– Gross revenue (not profit)– Acquirer - “group” revenue– Target - only that part being sold
Geographic allocation– Main rule - location of customer
Last financial year– Adjust for post-year end acquisitions/disposals
Special cases – financial/insurance sectorsBrussels rules used most oftenConsider maintaining turnover information for merger control purposes
Where - market share
It’s a bit early isn’t it?Yes, but…– Approx. 25 jurisdictions still use market share for
establishing jurisdiction– Strong lobby from ICN and businesses to remove
National market or relevant market?– Portugal v.s. Brazil
Aggregation needed?– Spain v.s. UK
ICN effect – Greece, Czech, Brazil, Slovenia, Portugal
Where - assessing jurisdictionAssessment boxes– Box 1 - straightforward yes/no (and voluntary/mandatory)– Box 2 - unclear – more information required?– Box 3 - technical requirement – but candidate for not filing?
Box 3 – candidates for not filing– “We may have to file where? Are you crazy?” – Possible factors in considering taking a view:
• limited/no effects: considering levels of local sales, local assets and local overlap
• local sanctions/powers• aggressiveness of agency• risk tolerance• illegitimate exercise of jurisdiction – international law
Appointing coordinating outside counsel to manage jurisdictional assessment and notification process
What – notification informationDeal detailsParties’ details/turnover/subsidiariesInternal documents assessing dealSubstantive information– Relevant markets– Market shares – parties and competitors– “Story telling” – e.g., entry barriers, buyer power
Top customer, supplier, competitor contact detailsPower of attorney/ translations/ signatures/ authenticated copiesPushing back when needed– Some regimes focus on form not substance– The weird and wacky – when to go with it, when not to
How – timing tipsBuilding merger control timing into deal timing– Preparation of filing– Pre-notification contacts/drafts– Suspension of closing and clock stopping– Contract – conditions/drop dead dates
Getting the clocks running– How early can we file? – How early do we have to file – filing deadline jurisdictions– Priority timing
• filing deadline jurisdictions• substantive “lead” jurisdictions• longest investigation periods
– Is there a short-form/simplified procedure?
How – process tipsInternal team – BD/marketing/strategy– Notification information– Post-filing requests for information
Aim to tell the same basic story everywhere– “Template” filing – deal/parties/substantive story– May be asked for “waivers”: int’l cooperation
Previous/next filings– What did we say last time? keep filings to hand– Merger filings as part of exit/growth strategy
• avoiding hostages to fortune
Dealing with the agencies– Their agendas, capabilities, know-how
How – post-filing/clearance tips
Information requests– Fast reactions to avoid/minimise clock stopping
Will third parties be involved/consulted?
What form does the clearance decision take?
Published – protect business secrets
Advising agencies about other clearances (peer pressure/timing)
Post-clearance obligations (Germany, Greece)
Fees (pre/post filing)
Summary
Is merger control relevant
Obtaining turnover/asset information
Assessing jurisdictional thresholds
Identifying any lead jurisdictions on timing and substance
Preparing notifications – coordination
Getting the clocks running
Keeping them running
Clear and close!
Everybody wants to rule your deal – a practical guide to international merger control
Dave AndersonPartner, Berwin Leighton Paisner LLP Brussels9 October, 2007
