everybody wants to rule your deal – a practical guide to international merger control dave...

Everybody Wants to Rule Your Deal – A Practical Guide to International Merger Control

Dave AndersonPartner, Berwin Leighton Paisner LLP Brussels9 October, 2007

David.Anderson@blplaw.com

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

The Americas

USA

Canada

Mexico

Brazil

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

David.Anderson@blplaw.com