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IN THIS ISSUE:
Breaking Up Is Hard to Do (But Planningfor It Can Be Even Harder) 1
The M&A Lawyer Roundtable: TheInternational Antitrust Picture, 2017 5
Delaware Supreme Court, ReversingChancery Court, Interprets Post-ClosingPurchase Price Adjustment “True Up”Narrowly, Based on the Specific FactualContext—Chicago Bridge v.Westinghouse 10
Federal Judge Blocks Merger of NuclearWaste Disposal Companies Rejecting“Failing Firm” Defense 14
German Government Expands AuthorityOver Takeovers by Investors fromOutside the EU 16
From the Editor 18
BREAKING UP IS HARD
TO DO (BUT PLANNING
FOR IT CAN BE EVEN
HARDER)
By Peter D. Lyons, Mary Lehner, Jennifer
Mellott, and Elise Nelson
Peter Lyons is an M&A partner with Freshfields
Bruckhaus Deringer US LLP in New York. Mary
Lehner is a partner, Jennifer Mellott is a senior
associate, and Elise Nelson is an associate in
Freshfields’Antitrust, Competition, and Trade
practice in Washington, DC.
Contacts: peter.lyons@freshfields.com or
mary.lehner@freshfields.com.
The past 15 years have seen an explosion in the
number of jurisdictions requiring pre-merger
antitrust notification and an increase in the aggres-
siveness of many of those antitrust regulators in
challenging transactions. In particular, the U.S.
Department of Justice and Federal Trade Commis-
sion and the European Commission have become
more aggressive in requiring remedies to approve
transactions and other jurisdictions, including
Brazil, China, and India, have also required
remedies. At the same time the multi-jurisdictional
nature of business has resulted in more transac-
tions involving merger notifications in multiple
jurisdictions, causing burdens and delays that
frustrate parties eager to get to closing. In most
cases these delays are merely annoying, but in
transactions that raise substantive antitrust con-
cerns, dealing with multiple regulators with differ-
ent levels of sophistication, methods, and legal
standards can make it difficult to predict the likely
outcome.
With this risk in mind, parties to transactions
that pose antitrust risk are paying close attention
to the way that antitrust risk is allocated in trans-
action agreements. Where the parties expect anti-
trust scrutiny, the allocation of antitrust risk be-
tween the parties is often the second most
significant negotiation issue, following only price.
Sellers push buyers to do anything and everything
necessary to make sure that the clearances are
secured, while buyers want to be able to walk
away from a transaction if a regulator insists on a
remedy that undermines the value of the deal.
A range of antitrust risk allocation provisions
are possible, but parties typically default to one of
the following, set out from the most seller-friendly
to the most buyer-friendly:
E Hell or high water (HOHW): The buyer
must agree to any remedy required to garner
antitrust approvals. At its most extreme, a
buyer that agrees to a true HOHW provision
could be required to sell the entire target im-
mediately after closing.
E Obligation to divest up to a limit: The
buyer is obligated to divest up to a negoti-
ated limit, but if the buyer cannot secure
regulatory clearance within that limit, it can
terminate the transaction agreement. The
limit can be described in either numerical or
descriptive terms, sometimes taking the
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form of a specified list of facilities or a capacity or
revenue figure, or it could be defined in words as, for
example, a remedy that would not have a material
adverse effect on the target.
E Reasonable best efforts, without a specific obliga-
tion to agree to a remedy: The buyer must use rea-
sonable best efforts to secure antitrust approvals. The
provision is sometimes viewed as being “silent” with
respect to antitrust risk allocation because it does not
include an explicit obligation to agree to a remedy.
For most buyers, a HOHW is too much risk to take on.
On the other hand, a seller may balk at a limit on the rem-
edy obligation. To address these concerns, parties some-
times pair a commitment to divest with a break fee,1 which
the buyer must pay if it abandons the transaction for regula-
tory reasons. Break fees can bridge the gap between the
available alternatives, allowing a buyer to avoid a HOHW
but giving a seller comfort that a buyer won’t abandon and
pay the fee if a reasonable fix can be found.
When looking at trends in antitrust risk allocation,
transactions that don’t raise antitrust concerns don’t have
much value as precedent. For a buyer that does not think it
will be required to offer antitrust remedies, a HOHW is a
meaningless “give” in the back and forth of a negotiation.
Similarly, a seller who does not expect the buyer to present
serious antitrust issues will often choose not to expend any
of its negotiating chips on the antitrust risk allocation
provisions. Therefore, when thinking about risk allocation
provisions, we think it makes more sense to focus on
transactions where the parties expected substantive anti-
trust issues.
To understand how parties allocate antitrust risk in cases
where it matters, we collected data on 1,156 merger agree-
ments between 2010 and 20162 that involved a public U.S.
target. We then focused on the 120 transactions where the
parties disclosed that the U.S. Federal Trade Commission
or Department of Justice issued a Request for Additional
Information or Documentary Material (Second Request).
Because it is extremely unlikely, in our experience, that a
Second Request would be issued if the parties had not
foreseen some level of antitrust risk, this approach focuses
on transactions where we believe the parties should have
anticipated an in-depth antitrust review or remedies
requirement when the transaction was negotiated.
Figure 1 shows the antitrust risk allocation provisions
used in the 120 transactions involving a Second Request.
While sellers often include a HOHW in the first draft of
the transaction agreement, the data shows that the most
common way to allocate antitrust risk is a commitment to
divest up to a limit, with or without a break fee. Of the 120
transactions, 93 (77.5%) involved a commitment to divest
up to a limit, with or without a break fee. Of those, 41
transactions included a break fee, while 52 did not. Seven
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additional transactions (5.8%) contained only an antitrust
break fee.3 Perhaps most interestingly, only six transac-
tions (5%) included a HOHW provision. Fourteen transac-
tions (11.7%) were silent or contained only a reasonable
best efforts provision.
The data also shows that antitrust break fees have
become more common since 2010. At the same time, the
average amount of a break fee as a percentage of equity
value4 has declined. Figure 2 shows these relationships,
with the top solid line showing the number of Second
Request transactions that included an antitrust break fee in
each year, and the bottom solid line showing the average
antitrust break fee as a percentage of transaction equity
value. In each case, the dotted line shows the overall trend:
more transactions with an antitrust break fee, but a lower
average break fee as a percentage of equity value.
In addition, the standard deviation5 of the value of
antitrust break fees decreased between 2010 and 2016. In
other words, while the average value of a break fee has
decreased, the range of typical break fees has tightened.
From 2010 to 2012, the range of antitrust break fees as a
percent of equity value was between 0.2% to 37.3% with a
standard deviation of 8.5%6, but from 2015 to 2016, the
range of antitrust break fees as a percentage of equity value
was between 0.6% and 8.7% and the standard deviation
shrunk to 2.0%.
The data suggests some useful trends that can be help-
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ful to parties negotiating antitrust risk allocation
provisions. However, it is important to keep in mind that
Second Requests are exceedingly rare and that this analy-
sis is based on a very small data set of 120 transactions
where outliers can have a disproportionate effect on the
data. In addition, antitrust risk allocation provisions are not
negotiated in a vacuum. Parties negotiating transactions
often point to the precedent for their provision of choice.
However, antitrust risk allocation provisions—like any
other provision—ultimately reflect the circumstances in
which the transaction was negotiated. In an auction situa-
tion, a strategic buyer may be pressured to accept a HOHW
to compete with private equity buyers, which usually do
not foresee any antitrust risk and are happy to offer one.
On the other hand, in a merger of equals or an all-stock
transaction, the parties will both have a stake in the syner-
gies expected post-closing, so may agree to share the
antitrust risk because they will share in the transaction’s
upside.
With these caveats, the data suggests some interesting
food for thought.
E HOHWs are not typical in transactions that raise
substantive antitrust concerns. Although many
sellers (and their lawyers and investment bankers)
initially seek a HOHW and point to prior transac-
tions without antitrust concerns as evidence that
HOHWs are the norm, HOHWs were actually quite
unusual in transactions that received a Second
Request. Only 5% of Second Request transactions
between 2010 and 2016 included a HOHW.
E Commitments to divest up to a limit—with or
without break fees—are the norm. The most com-
mon type of antitrust risk allocation provision be-
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tween 2010 and 2016—by far—was an obligation to
divest with or without a break fee. Over that period,
93 out of 120 (77.5%) transactions that received a
Second Request included this provision; 41 of these
transactions also included a break fee and 52 did not.
It is worth noting that including a commitment to
divest up to a limit in an SPA may bring its own
problems, most importantly that it can create a road
map for regulators as to the remedies that a buyer
will have no choice but to accept or alert regulators
to an issue that they may otherwise have missed.
E The typical value of a break fee is decreasing, and
there are fewer outliers. Between 2010 and 2016,
the average value of a break fee in a Second Request
transaction declined from 6% to 4%, and the range
of break fees in any given year shrank. This is evi-
denced by the decreasing standard deviation from
8.52% from 2010 to 2012 to 2.0% from 2015 to
2016, and the 2016 average antitrust break fee of
3.90% as a percentage of equity value. The fact that
the range of break fees is becoming more tightly
clustered may suggest that parties are becoming
more sophisticated in the way that they negotiate
these provisions. Based on our experience, it is best
practice for the parties to undertake a meaningful
antitrust assessment before negotiating antitrust risk
allocation, and we think that this practice has become
the norm.
We continue to study the data and trends, and invite
observations and conversation on the topic.
ENDNOTES:
1Contrary to a forward break fee, which is payable by atarget to the buyer if the seller abandons the transaction inresponse to a topping bid, we refer here to a regulatory re-verse break fee, which is a fee paid by a buyer to the targetif the acquirer abandons the transaction because it is un-able to secure antitrust approval.
2We used public transactions from Westlaw’s PracticalLaw What’s Market. Without question there will be othertransactions where the parties foresaw antitrust risk thatare not included in the data; for example, transactions inwhich the parties avoided a Second Request altogether.There also will be private transactions that presented seri-
ous antitrust issues, but many of the transaction agreementsaren’t publicly available.
3Two transactions, Actavis/Allergan and Dow/DuPont,did have both a HOHW and a break fee.
4In Figure 2, equity value is used. However, usingenterprise value results in a similar trend.
5For readers more than a few years removed from astatistics class, a standard deviation measures the distancethat most values in a dataset are from the average, with ap-proximately 68% of the values within one standard devia-tion on a symmetrical bell-shaped graph. A small standarddeviation suggests that the values are clustered closelyaround the average, while a large standard deviationindicates that the range is more dispersed.
6Removing the highest break fee (37.26%) from thedata set still leaves a maximum break fee of 21.05% dur-ing this period with a standard deviation of 4.65%.
THE M&A LAWYER
ROUNDTABLE: THE
INTERNATIONAL ANTITRUST
PICTURE, 2017
While the antitrust regime of the Trump administration
remains a developing picture, there are equally interesting
changes happening across the Atlantic and Pacific oceans.
As a follow-up to our roundtable on domestic antitrust (The
M&A Lawyer, June 2017), we interviewed two lawyers
with extensive experience in Europe and Asia. Our conver-
sation centered on how antitrust has changed in both
regions over the past five to ten years, and what to expect
in the future. We spoke in late July 2017.
Peter J. Wang is the partner-in-charge of Jones Day’s
China region, based in the firm’s Shanghai and Beijing of-
fices, and coordinates Jones Day’s competition practice in
Asia. He has handled U.S. and Chinese government anti-
trust investigations of proposed mergers and acquisitions,
including Baxter’s acquisition of Gambro, Goodrich’s
acquisition by UTC, GM’s acquisition of Delphi, Alcatel’s
merger with Lucent, America Online’s merger with Time
Warner, and Procter & Gamble’s acquisition of Clairol.
Alexandre G. Verheyden is a partner in Jones Day’s
Brussels office and coordinates Jones Day’s competition
practice in Europe. He recently represented Wabtec in its
merger with Faiveley, Huber in its acquisition by Evonik,
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and COMREG in relation to the merger filings that resulted
in the consolidation of the mobile communications sectors
in Ireland and Germany.
The M&A Lawyer: There is a sense among some U.S.
antitrust lawyers that the next few years could see a grow-
ing divergence between the U.S. regime and its counter-
parts in the European Union, China, and Japan, among
other regions. Is that a fair assessment? What are you see-
ing from your perspective?
Alexandre Verheyden: In the U.S., enforcement has
been in part a reflection of the administration in place. In
the EU, there is little room for political interference in re-
lation to enforcement policy. There are four major factors
that have influenced the evolution and application of
[European] competition law over the last decade or so.
First is the change in the legal tests for mergers. Since mov-
ing to the test of significance impediment to effective com-
petition, the SIEC test, this has enabled EU authorities to
shift away from standard dominance assessments and to
focus rather on concerns relating to the lack of competitive
nature of the market. In the SIEC test environment, when
you have a [small] number of players left in a given mar-
ket—for example, going down from five to four players—it
can raise scrutiny from the Commission.
The second factor is that there’s a greater reliance on
economic analysis. In complex matters, the Commission
will include its own team of economists and sometimes
third parties assisted by their own economists as well. It’s
[leading to] a profound evolution of European competition
law. A third factor is that global companies are no longer
limited to primarily one jurisdiction. Now China is also
becoming a key jurisdiction, for instance, and there are a
large number of countries that have adopted merger
regulations. In the past, a company would notify its merger
before a few authorities. Now it’s not unusual to notify
before a much larger number of authorities. This raises is-
sues about the timing of clearances and it’s raising issues
of consistency. It adds one more layer of complexity in the
process.
And there’s a fourth factor that has really emerged in
the past four years or so, which is probably more of a policy
nature. The Commission is paying increasing attention to
protecting technological innovation. This is an argument
that’s increasingly used in the context of mergers when the
facts lend themselves to such a review. So these are the
factors that are now influencing the evolution of competi-
tion law, much more than, say, the type of administration
in place.
Peter Wang: About five or 10 years ago, China and Asia
in general weren’t even on the radar for merger review—
really, for antitrust in general. So this is all still very new to
us. Everyone is learning as they go. Development [in Asia]
has been generally moving towards convergence with the
older, more established antitrust regimes. In particular,
Europe. The two most aggressive jurisdictions in Asia—
China and Korea—have tended to view the EU model as
being closer to their own legislative or legal models. In
that sense, that’s still the case—they generally look to what
the EU is doing first. Whereas the U.S. was considered kind
of an outlier because it was more permissive, and case-
based, and the agencies have to go to court to sue. All of
those things are fairly unusual to Asian regulators, who
have complete regulatory authority over the deals they’re
reviewing.
In the later part of the Obama administration there was
a twist, as it became quite aggressive, especially in its
willingness to challenge mergers and apply the sort of eco-
nomic tools that Alexandre is talking about. In a way, the
U.S. started to look more like everyone else. We were start-
ing to see some aggressive theories being advanced to
potentially merging parties from all of these jurisdictions,
not just the Europeans. Now it could be coming from China
or Korea, or even from the U.S. In a way, that meant a
growing convergence but it also made it a bit tough for
merging parties. You start trying to determine which
jurisdictions are more reasonable, which will care more
about a deal, which would consider the efficiencies of the
deal more.
So when I think about the Trump administration, I think
we’re going to revert to the norm. It’s reasonable to expect
that [the new antitrust regime] might be more like the U.S.
was in the past, which would mean the U.S. may pull back
some of the more aggressive theories that we’ve seen com-
ing from there. That in turn might leave Asian authorities
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more out on a limb. They may end up getting ahead of U.S.
enforcers on deals.
MAL: Alexandre mentioned protecting technological
innovation as a growing European priority, but that would
seem to be important for the likes of China and Japan as
well.
Verheyden: As far as the EU is concerned, what’s fuel-
ing this need to protect technological innovation is a feel-
ing at policy level that the European economy has not in-
novated as much as it could have in the past, and that
bottlenecks on necessary inputs on technology have been
part of the reason for this. There have been a number of
merger cases where the Commission put an emphasis on
technological innovation, and this is not exclusively in the
area of mergers, as the recent Commission Google deci-
sion demonstrates.
Wang: We’re seeing concerns and theories about the ef-
fects on innovation resonating in China and other jurisdic-
tions—particularly Korea, and also in Taiwan and Japan. It
can be hard to separate where there are real concerns, and
attempts to look at the effects on innovation for a particu-
lar industry, from simply local interests. Innovation-based
theories historically haven’t been pursued very aggres-
sively, especially in countries like the U.S., because they’re
inherently speculative. They’re essentially trying to predict
the future. Everyone is trying to adjust for a more dynamic
business environment, which means there’s a lot more
room for discretion by regulators. You can look into the
future and see what you think you want to see.
MAL: There was an increased emphasis on vertical
merger enforcement during the later Obama years. Is that
a concern for other countries’ regimes?
Wang: Vertical enforcement in general has become a
very high priority of China and, increasingly, all around
Asia. It reflects a general sense that there are cases where
companies are being affected adversely by their rivals’
vertical relationships. They may have unequal bargaining
power in one side or other of those relationships. There’s a
sensitivity as to how will the downstream customers or
sometimes upstream clients be affected by this consolida-
tion? China in particular has a very aggressive stance, not
only looking at [vertical] issues but setting pretty low
thresholds for when they will start to look at things very
closely. Thresholds include the percentage of market share
on either the upstream or downstream side, which is usu-
ally much lower than what normally would have expected
in other jurisdictions.
Verheyden: As far as Europe is concerned, there’s been
some attention on vertical mergers but I can’t say it’s a
new trend. The threshold for regulatory intervention is still
much higher than it is for horizontal mergers, so I’m not
convinced that we’re at any turning point in terms of
enforcement strategy.
MAL: A speculative question for Alexandre: should
Brexit go forward and the UK leaves the European Union,
does that add another layer of complexity for deal review?
Verheyden: I’m not sure Brexit will change much. Of
course, if there’s a Brexit, a company will technically have
one more filing to do. But as I mentioned before, most of
these complex mergers involve a fairly high number of fil-
ings already, so one more filing may not be a game-changer
in such cases. Another reason not to expect a significant
impact is that the UK regime is voluntary, which gives par-
ties the option of not notifying, although only to a limited
extent. So yes, at most the UK will likely be one more
European country where a company may need to notify.
MAL: Has the timing of clearances become more
complex? With the growing number of notifications re-
quired, is it harder for a deal to get cleared?
Verheyden: For the timing of clearances, whenever a
deal is negotiated, there’s a fair amount of work that’s done
ahead of time: seeing which jurisdictions are likely to
require filings and whether the deal is likely to attract
regulatory scrutiny. Sometimes you do it based on infor-
mation you have received during deal negotiation, although
the information provided by the parties is not always
complete. Once the deal is signed and you start working on
notifications, most jurisdictions do not have a mandatory
notification timeframe, so you can take the time necessary
to prepare the relevant filing (subject of course to the tim-
ing agreed between the parties). In my experience, you ba-
sically focus first on the countries which you expect to raise
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some concerns or which by experience take more time than
others to reach a position. This is not playing one agency
against another, in particular because you know that they
are likely to exchange information between each other.
Wang: I’d add one point specifically on China. In many
global deals, the China review becomes the jurisdiction
that’s most likely to have the longest approval process.
That has been improving for simpler deals but I think it
still remains the case. As Alexandre was saying, you can
expect all the regulators to exchange information on where
they stand in the process as well as on substantive issues.
In the great majority of cases, you’re seeing convergence
not just on substance but on the process too. Everyone is
always asking each other what’s their status, who’s going
to clear when. In most cases, nobody wants to be the outlier
who’s holding up a deal that the rest of the world doesn’t
see problems with. But then there are a small minority of
cases where the review in a particular jurisdiction, which
often has been China in the past, will take a lot longer. This
is often because of a substantive divergence in the way a
jurisdiction looks at things. Sometimes there’s a different
competitive analysis at play. Other times there could be
different domestic concerns. The [agency] might be look-
ing for feedback from stakeholders— not just directly-
affected customers but government agencies and trade as-
sociations that have a role in regulating the industry in
question. Sometimes you can get cases in China where the
nature and the volume of the feedback will drag out the
process. Those situations have become frustrating for
merging parties. It’s often difficult to understand the real
competition issues at stake and some jurisdictions aren’t
transparent. They won’t let you see what third parties have
complained about, they won’t let you directly talk to the
economists that are working for them. So you can feel like
you’re shooting in the dark.
Again, that’s for a small minority of cases. But it is
there, and it drives the perception that China is a problem
from a deal timing perspective. As result, on the negotia-
tion side companies are doing their utmost to manage
whether they need to have a China filing, and if they need
to have one, thinking proactively how that timeline is go-
ing to work.
MAL: Do European and Asian regimes seem more open
to deal remedies than in the past?
Verheyden: As far as Europe is concerned, only an
extremely small number of deals are prohibited. There
have been only two such cases over the past twelve months.
By and large, for most of those cases where there are
concerns, the Commission is amenable to finding a remedy.
A good example is GE’s recent acquisition of Alstom’s
turbine business. There was an issue in relation to certain
types of turbines and the Commission accepted a fairly
complex remedy addressing the issue of innovation in the
market. It’s a good example of a flexible approach taken
by the Commission.
The challenge we have sometimes is that the type of
remedies the Commission accepts in “Phase I” and “Phase
II” are different. In Phase I, the Commission is looking for
very clear-cut remedies, which means that sometimes that
parties have to propose more than would be strictly neces-
sary to address the Commission’s concerns. Phase I simply
doesn’t allow for enough time for back-and-forth and
extensive market testing of complex remedies. By contrast,
in Phase II, you’ve got more time and more options, in
terms of when you offer remedies, and the Commission
has more time to assess these. The Commission has a bet-
ter understanding of the market and the issues, which al-
lows for remedies that can be better crafted and strictly
limited to the concerns identified.
Wang: We’re starting with a very short historical
sample here, but there has been increasing skepticism [in
Asia] about the quality of buyers, driven by the skepticism
that’s coming out of the U.S. and to a lesser extent Europe.
That has led to a similar kind of movement towards often
preferring upfront buyers in a divestiture situation. Also,
the MOFCOM rules in China specifically appear to require
that MOFCOM needs to be presented with a choice of buy-
ers, although in practice it’s difficult to work out if you
need to obtain multijurisdictional approvals over the
remedy.
For a long time, conduct remedies have been an impor-
tant part of MOFCOM’s jurisprudence. A lot of them are
very standard things but with a twist. There are standard
firewalls and nondiscrimination requirements, of course,
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but often the aim has been to make sure that Chinese
customers or sometimes Chinese suppliers are treated
fairly and have equal access to supply. Sometimes [MOF-
COM] goes beyond that and says they want the parties to
continue to deal with China as they have before. They’re
trying to lock in consistency and predictability for a com-
mercial process for a particular industry. That’s a very
important concern in Asia. We’ve seen some remedies
directed at having market forces be relatively stable—pric-
ing and supply. As Alexandre said, we’ve seen fewer
outright rejections of transactions. In each case, it was a
unique circumstance. In other cases, however, the deals
weren’t officially rejected but they were dragged out for so
long the parties withdrew the deal. That’s happened on a
few occasions.
Another interesting thing to note is that other Asian
jurisdictions, Korea in particular, in the last few years have
appeared to be more willing to just outright reject a deal as
proposed. We’ve seen that a few times. Sometimes it’s
surprising even to the parties involved. [An agency] would
just reject proposed remedies and block the deal instead of
engaging in back and forth trying to get to a negotiated
solution. This may have something to do with the proce-
dural limitations in their review process. They may not
have as much flexibility to extend their process or engage
in back and forth.
It’s an issue that we need to be aware of as we handle
these global deals. I think we’re going to see more jurisdic-
tions becoming more active. Each has its own
idiosyncrasies. I don’t think the substance will diverge on
the surface as much as there will be local differences and
interests. The main issue is we’ll have to manage all sort of
procedural timelines, as many countries have different
processes and timelines for approval of a remedy or
divestiture. That all needs to be mapped out ahead of time.
MAL: What do you see on the horizon now—is there
new legislation or regulation that could have an impact on
the European or Asian antitrust regimes?
Verheyden: The four main trends I mentioned earlier
are the main parameters we’re faced with now. I don’t
expect those to change. They could contribute to increased
case complexity, but this also provides parties with more
opportunities as well. The legal and economic tools we
have today can provide parties with additional arguments
to demonstrate that a merger leading to high market shares
will not necessarily affect competition. So while cases are
becoming increasingly complex, it’s also a window of op-
portunity for businesses.
Wang: I think there’s a great deal of opportunity, but
danger also, in an increased focus on economic analysis. I
think that’s spreading through the world and it’s not going
to be pulled back now. But the key is how it’s done. We
have a lot of tools that can give you insight but they’re
limited by the quality of data and the assumptions that
regulators make with it. What we see sometimes happen-
ing from jurisdictions further away from the U.S. and
Europe is a tendency to use these tools without at least
acknowledging any limitations on their validity or how in-
formative they can be. You will see agencies like MOF-
COM hiring outside economists, which is generally a posi-
tive outcome. But it’s still hard to evaluate given the lack
of transparency—we can’t actually see the reports of these
outside economists. When we don’t know how much detail
they go into, or the quality of the data they rely on, it’s
hard for us to respond.
The last thing I’d mention is that the growing interplay
of all these jurisdictions is having both good and bad
effects. On the one hand, the agencies can help each other,
each can educate the other, they can get up to speed faster.
But there’s also a danger as well—sometimes you’ll see a
multiplier effect, an amplification effect. If someone had a
particularly aggressive theory of harm, it can spread
around. Third-party complainants can forum-shop, in a
way. They can take their theory around and present it to all
these different agencies until they find one that thinks it’s
interesting enough to pursue. And from a process perspec-
tive, some agencies may be coming from jurisdictions
where their procedural structure doesn’t set relatively high
barriers for the challenge of deals. The leverage over par-
ties is completely different. We’re seeing the potential in
which a complainant that has what once was considered an
iffy challenge can now take that theory to another jurisdic-
tion, where the agency does not need to convince a court,
but instead the burden is on the parties to prove it’s not a
problem. This could change the dynamic of the deal review
process.
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DELAWARE SUPREME COURT,
REVERSING CHANCERY
COURT, INTERPRETS POST-
CLOSING PURCHASE PRICE
ADJUSTMENT “TRUE UP”
NARROWLY, BASED ON THE
SPECIFIC FACTUAL
CONTEXT—CHICAGO BRIDGE
v. WESTINGHOUSE
By Gail Weinstein, Christopher Ewan, Steven J.
Steinman and Brian T. Mangino
Gail Weinstein is senior counsel in the New York office of
Fried, Frank, Harris, Shriver & Jacobson LLP.
Christopher Ewan and Steven Steinman are partners in
Fried Frank’s New York office. Brian Mangino is a partner
in Fried Frank’s Washington DC office.
Contact: gail.weinstein@friedfrank.com or
christopher.ewan@friedfrank.com or
steven.steinman@friedfrank.com or
brian.mangino@friedfrank.com.
In Chicago Bridge & Iron Company N.V. v. Westing-
house Electric Company LLC1, the Delaware Supreme
Court interpreted a purchase agreement net working capital
“True Up” as a “narrow, subordinate, and cabined remedy.”
The buyer contended that the seller’s post-closing net
working capital calculations were flawed because the sell-
er’s historical accounting practices in preparing the target
company’s financial statements were not compliant with
GAAP. The seller argued that, under the purchase agree-
ment, the buyer’s only remedy for breaches of representa-
tions and warranties had been a refusal to close (which the
buyer had foregone)—and that, therefore, the buyer could
not properly request that the dispute resolving auditor
make a determination with respect to claims about GAAP
compliance of the financial statements. The Supreme Court
ordered that the Court of Chancery “enjoin [the buyer]
from submitting to the [auditor] or continuing to pursue”
the claims that were based on the historical accounting
issues. The only claims that could be submitted and
pursued, the Supreme Court held, were those “based on
changes in facts and circumstances between the signing
and closing.”
As a result of the decision, the buyer’s $2 billion claim
with respect to the post-closing purchase price adjustment
was reduced to less than $70 million. The Supreme Court
emphasized that the decision was grounded in the specific
factual context of the case. The first sentence of Chief
Justice Strine’s opinion reads: “In giving sensible life to a
real-world contract, courts must read the specific provi-
sions of the contract in light of the entire contract.”
Key Points
E The decision confirms that a provision requiring a
“True Up” at closing of net working capital for
purposes of determining a purchase price adjustment
will generally be considered to be a narrow remedy,
relevant only to changes occurring between signing
and closing—and cannot be used as an end-run
around purchase agreement provisions that limit li-
ability for breaches of representations and
warranties.
E The decision underscores, however, that the specific
language of a True Up provision, the other provi-
sions of the purchase agreement, and the overall
context of the deal, will influence the court’s inter-
pretation of the breadth of the claims that can be
made under the True Up.
Background
CB&I Stone & Webster, Inc. (the “Company”), a sub-
sidiary of Chicago Bridge & Iron Co. (the “Seller”), had
been building nuclear power plants, in partnership with
Westinghouse Electric Company (the “Buyer”). As delays
and cost overruns mounted, the relationship became
“contentious.” To resolve their differences, the Seller
agreed to sell the Company to the Buyer, with the Buyer
paying zero dollars as a purchase price but assuming all of
the liabilities of the Company. (Cost overruns at these proj-
ects, in the billions of dollars, ultimately forced the Buyer
into bankruptcy in March 2017—also threatening the
financial viability of the Buyer’s parent, Toshiba Corp.)
The Purchase Agreement provided as follows:
E True Up. The purchase price of zero was based on a
target net working capital amount of $1.174 billion.
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The Agreement provided for a “True Up” at closing,
and a post-closing purchase price adjustment to the
extent that actual net working capital at closing
varied from the target amount. The Seller was re-
quired to continue to run the Company in the ordinary
course of business until closing.
E Liability Bar. The Agreement provided that the
Buyer’s sole remedy if the Seller breached its repre-
sentations and warranties was to refuse to close; that
the Seller would have no liability for monetary dam-
ages post-closing (the “Liability Bar”); and that the
Buyer would indemnify the Seller for all post-closing
claims or demands against, or liabilities of, the
Company.
E Dispute Resolution. Any dispute over the post-
closing purchase price adjustment was to be submit-
ted to an independent auditor (the “Auditor”)—who
was to act “as an expert, and not as an arbitrator”; to
issue a decision, in the form of a “brief written state-
ment,” within 30 days; and to rely on the parties’
written submissions as the sole basis for its decisions.
The Court of Chancery ruled in favor of the Buyer, rea-
soning that the mandatory dispute resolution provision in
the Purchase Agreement meant that all disputed issues re-
lating to the post-closing adjustment were to be submitted
to the Auditor.2 The Supreme Court reversed, finding that
the lower court decision—which would have permitted a
“wide-ranging” challenge to the Company’s historical
financial statements—was inconsistent with (i) the Li-
ability Bar provision of the Purchase Agreement; (ii) the
structure of the True Up, which reflected that it was a “nar-
row,” “confined” remedy that related to the period between
signing and closing; and (iii) the general tenor of the deal
and other terms of the Purchase Agreement, which indi-
cated an intention to provide a “clean break” for the Seller.
Discussion
The Supreme Court viewed the True Up as a narrow
remedy that could not be used as, in effect, an end run
around the Liability Bar. In the Supreme Court’s view,
the Buyer’s claims were, “in essence, claims that [the
Seller] breached the Purchase Agreement’s representations
and warranties. . ..” The claims “therefore are foreclosed
by the Liability Bar,” the Supreme Court held. The Court
of Chancery decision, the Supreme Court wrote, by “read-
ing the True Up as unlimited in scope and as allowing [the
Buyer] to challenge the historical accounting practices
used in the represented financials, . . . rendered meaning-
less the Purchase Agreement’s Liability Bar.” The Buyer’s
sole remedy if the financial statements were not GAAP-
compliant was to refuse to close, the Supreme Court
stated—which the Buyer had chosen not to do.
The Supreme Court confirmed that the main role of
a True Up, as a general matter, is to account for changes
in the target company’s business between signing and
closing. The Supreme Court rejected the Court of Cha-
ncery’s interpretation of the True Up as “providing [the
Buyer] with a wide-ranging, uncabined right to challenge
any accounting principle used by [the Seller].” Rather, the
Supreme Court wrote, the True Up, “[w]hen viewed in
proper context, . . . is an important, but narrow, subordi-
nate, and cabined remedy available to address any develop-
ments affecting Stone’s working capital that occurred in
the period between signing and closing.” The Supreme
Court reviewed that generally the purpose of a True Up is
to “maintain the underlying economics of the parties’
bargain”—in this case, to ensure that the Seller would
continue to operate the Company “as though it were still
its own business, but without worrying that pursuing
normal construction operations would benefit [the Buyer]
to [the Seller’s] own detriment”; to protect the Buyer
against the Seller or the Company “suddenly shift[ing]
course in how it chose to treat [the Company] from an ac-
counting perspective”; and to protect the Buyer against
“end[ing] up worse off than it was at signing” if “[the
Seller] didn’t follow through with the construction program
or if the Buyer and the utilities paid a bunch of their
bills. . ..”
The Supreme Court viewed the language of the True
Up as supporting the view that it could not be used to
challenged past accounting practices. The Supreme
Court noted that the True Up “emphasizes that net working
capital should be determined in a manner consistent with
GAAP, consistently applied by the seller in preparation of
the company’s financial statements.” Other pertinent
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language in the agreement also requires consistency with
past practices and with “the basic idea that the True Up is
used to set a Final Purchase Price based on developments
after the initial price of zero was set.” Thus, the Court
concluded, “the True Up was tailored to address issues that
might come up if [the Seller] tried to change accounting
practices midway through the transaction or if it stopped
work on the projects, rather than continue to invest as
expected [and as required by the covenant to run the busi-
ness in the ordinary course until closing].”
The parties’ expectation, according to the Court, was
that, “at closing, [the Buyer] would get [the Company] and
[almost certainly would] have to make a payment to [the
Seller], [under the True Up,] to account, for example, for
the expectation that [the Seller] would make substantial
capital expenditures before closing so [the Company]’s
construction projects could continue.”
The Supreme Court viewed the limited role of the
Auditor as confirming the narrow role of the True Up.
Moreover, the Court noted, the structure of the dispute
settlement provision confirmed that the True Up was to
have a “subordinate and confined purpose.” The settlement
procedure required a brief written statement by the Audi-
tor, issued within the “expedited timeframe” of 30 days,
with reliance only on the parties’ written submissions. The
Court stated:
[T]he reason parties can hazard having an expert decide
disputes in this blinkered, rapid manner is because when
considering claims under the True Up, the expert is address-
ing a confined period of time between signing and closing
using the same accounting principles that were the subject of
due diligence and contractual representations and warranties,
and thus formed the foundation for the parties’ agreement to
sign up and close the transaction.
The Supreme Court viewed the overall context of
the deal as supporting its interpretation of the True Up
as a narrow remedy. “The basic business relationship be-
tween parties must be understood to give sensible life to
any contract,” the Chief Justice wrote. The zero purchase
price, assumption of all liabilities by the Buyer, Liability
Bar, and other provisions of the Purchase Agreement, and
the genesis of the deal as a resolution of the various differ-
ences between the parties in running the construction proj-
ects, indicated an intent to provide the Seller with a “clean
break,” the Supreme Court wrote.
The “essence of the deal” was that “[the Seller] would
deliver [the Company] to [the Buyer] for zero dollars up
front consideration and, in return, would be released from
any further liabilities connected with the projects.” Not
only would the Buyer indemnify the Seller against future
liabilities, the Court wrote, but closing was contingent on
the Seller receiving releases from the utility company that
would operate the plants when they were completed. The
Court concluded: “The key provisions of the Purchase
Agreement show and the business context they highlight
demonstrates, [the Buyer]’s view that the Purchase Agree-
ment gave it a free license to re-trade the core common
basis of the exchange is beyond strained; it involves a re-
writing of the contract embodying that exchange.” More-
over, the Court noted, the accounting practices about which
the Buyer complained were known to the Buyer prior to its
entering into the Purchase Agreement and were reflected in
the very financial statements on which the Buyer relied
when deciding to enter into the deal.
Justice Strine characterized “the sum total of [the
Buyer’s] logic” to be as follows:
Based on challenges to large items included in the [Seller’s]
financials that [the Seller] represented were GAAP compli-
ant, which [the Buyer] knew about before closing, and which
[the Buyer] did not use as a basis not to close, [the Buyer]
now says that it should keep [the Company], which it got for
zero dollars, and be paid by [the Seller] over $2 billion for
taking it!
Practice Points
E It should be kept in mind that a court’s interpretation
of a contract provision will be influenced not only by
the language of the provision and the contract as a
whole, but also the overall history and context of the
deal. Clarity in drafting is key, as unambiguous
language will be applied as written.
E Although most of the issues in Chicago Bridge arose
because of the Liability Bar in the purchase agree-
ment, the decision is a reminder of the need to draft
a True Up with clarity and precision. Based on Chi-
cago Bridge, parties should consider stating whether
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a closing True Up is intended to cover only changes
occurring in the business between signing and clos-
ing (and, if so, which changes). Attaching hypotheti-
cal examples can be helpful.
E Parties should be mindful that the timeframe and
other parameters set forth for a settlement process
may influence the court’s view of the breadth of a
settlement dispute provision purporting to cover
“all” disputes. Parties should consider stating
whether the structure of the settlement process is or
is not reflective of the parties’ intent with respect to
the substantive breadth of the True Up.
ENDNOTES:
1(June 28, 2017.)
2See Michael P. Conway, Bryan E. Davis, ElizabethClough Kitslaar and James A. White, “Accounting True-UpVs. Valuation Dispute,” The M&A Lawyer, February 2017,Vol. 21, Issue 2.
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FEDERAL JUDGE BLOCKS
MERGER OF NUCLEAR
WASTE DISPOSAL
COMPANIES REJECTING
“FAILING FIRM” DEFENSE
By Mary Strimel
Mary Strimel is a partner in the Washington DC office of
McDermott Will & Emery. Noah Feldman-Greene, a
McDermott summer associate, also contributed to this
article.
Contact: mstrimel@mwe.com.
On June 21, 2017, U.S. District Judge Sue L. Robinson
blocked EnergySolutions, Inc.’s proposed acquisition of
Waste Control Specialists LLC (WCS), applying a strict
standard for the “failing firm” defense to a merger
challenge. The parties compete in the disposal of low level
radioactive waste (LLRW). WCS had argued that it would
be forced to exit the market due to heavy operating losses
if the transaction were not approved. Judge Robinson’s
recently-released opinion provides insights into how ag-
gressively a putative failing firm must shop its assets to
third parties before it can qualify for the failing firm
defense to an otherwise anticompetitive merger.
What Happened
The U.S. Department of Justice (DOJ) filed suit in
November 2016 to enjoin the proposed acquisition of WCS
by EnergySolutions, arguing that the merger would lead to
a substantial lessening of competition in the LLRW dis-
posal industry. DOJ alleged that EnergySolutions and WCS
are the only significant competitors in this industry for the
relevant geographic market.
The court found that the government easily established
a prima facie case of anticompetitive effects by demon-
strating that the proposed acquisition would create a firm
controlling an exceedingly high percentage of the relevant
market and result in a significant increase in market
concentration. Judge Robinson identified two product
markets: the disposal of higher-activity LLRW and the dis-
posal of lower-activity LLRW. In both markets she found
that the relevant measures of concentration “blow past the
presumptive barriers” for harm to competition, especially
in regards to higher-activity LLRW where the transaction
would result in a “merger to monopoly.”
The defendants’ main defense to rebut the government’s
prima facie case was that WCS was a “failing firm.” The
failing-firm doctrine considers the possible harm to com-
petition resulting from an acquisition preferable to the neg-
ative impact on competition, loss to stockholders, and neg-
ative effect on local communities that result when a
company goes out of business. Judge Robinson’s opinion
explains that in order to assert a valid failing firm defense,
the defendants must show that WCS faces the “grave pos-
sibility of business failure” and that there was no “other
prospective purchaser.”
Judge Robinson avoided deciding the more difficult
question concerning whether WCS indeed faced imminent
business failure, finding instead that the defendants failed
to demonstrate that EnergySolutions was the only avail-
able purchaser. According to Judge Robinson, WCS’s par-
ent company failed to make the necessary “good faith ef-
forts to elicit reasonable alternative offers” that would have
lesser negative effects on competition.
The opinion highlights the fact that once it was clear
that the parent company was serious about selling all of
WCS, the parent company had already agreed to several
deal protection devices such as a 30-day exclusivity period
with EnergySolutions and a “no-talk” provision in the
merger agreement. WCS and its parent company thus did
not respond to other companies that reached out to express
interest in acquiring WCS after the transaction with
EnergySolutions was announced.
What This Means
Judge Robinson’s application of the failing-firm doc-
trine is consistent with the approach taken in the joint
Federal Trade Commission (FTC)/DOJ Horizontal Merger
Guidelines1 which require the failing firm to demonstrate
that “it has made unsuccessful good-faith efforts to elicit
reasonable alternative offers that would keep its tangible
and intangible assets in the relevant market and pose a less
severe danger to competition than does the proposed
merger.”
The opinion is also consistent with a March 2015 ar-
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ticle2, published by the FTC and discussed here3, that ad-
dressed the agency’s application of the failing firm doc-
trine to the health care context. In the article, the FTC
explained that the mere fact that the acquired firm may be
clearly failing does not quell the FTC’s concerns. Rather,
the agency will seek information from the failing firm
regarding its search for alternative offers, and reach out to
other prospective purchasers to see if they were contacted
and whether they have interest in acquiring the failing firm.
As Judge Robinson’s opinion demonstrates, in the rare
case where merging parties believe that the “failing-firm”
defense may be available to rebut a presumption of anti-
competitive effects, the owners of the failing company
should make serious, good faith efforts to seek out alterna-
tive offers that pose less danger to competition than a
proposed merger. Further, owners of the failing company
should not agree to any deal protection devices or exclusiv-
ity periods with the acquiring firm. The failing company
should be aware that in soliciting reasonable alternative of-
fers, the 2010 Horizontal Merger Guidelines consider any
offer to purchase the assets of the failing firm for a price
above the liquidation value to be a reasonable alternative
offer.
ENDNOTES:
1 https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf.
2 https://www.ftc.gov/news-events/blogs/competition-matters/2015/03/power-shopping-alternative-buyer.
3 http://www.antitrustalert.com/2015/04/articles/mergers-acquisitions/ftc-clarifies-failing-firm-defense.
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GERMAN GOVERNMENT
EXPANDS AUTHORITY OVER
TAKEOVERS BY INVESTORS
FROM OUTSIDE THE EU
By Jürgen Beninca, Karin Holloch and Martin T.
Kemmerer
Jürgen Beninca is a partner in the Frankfurt office of Jones
Day. Karin Holloch is a partner in Jones Day’s Dusseldorf
office. Martin Kemmerer is an associate in Jones Day’s
Frankfurt office.
Contact: jbeninca@jonesday.com or
kholloch@jonesday.com or
mkemmerer@jonesday.com
The Situation: Rules designed to protect Germany’s
national security interests have been extended to non-EU
investments in “critical infrastructure,” such as energy, wa-
ter, food, IT/telecom, health, banking and insurance, and
transportation.
The Result: Transactions by non-EU investors involv-
ing such critical infrastructure are now subject to additional
rules and potential scrutiny by the German government.
The Outlook: Transactions caught by the new rules may
face additional uncertainty and a prolonged period between
signing and closing. Applying for a certificate of non-
objection can speed the approval procedure but will not
fully remove the uncertainties if a legally binding state ap-
proval for the transaction must be obtained.
On July 18, 2017, the German government enacted
changes to the Foreign Trade and Payments Ordinance
(“AWV”) that significantly expand the scope of the law.
The German Federal Ministry of Economic Affairs and
Energy (“BMWi”) now has the right to investigate and
potentially block deals in the areas of energy, water, food,
information technology and telecommunication, health,
banking and insurance (“B&I”), and transportation that are
classified as “critical infrastructure,” provided that certain
thresholds are met. Companies affected by the AMV
changes include those that work with technical equipment
for (legal) telecommunication surveillance, cloud-
computing services, and components and services for
electronic health files also subject to the AWV.
Following a discretionary investigation, the BMWi can
block non-EU investors from directly or indirectly acquir-
ing 25% or more of a German entity active in these areas if
the deal endangers public or national security. Investments
in targets operating in sensitive security-related areas, such
as military equipment and cryptotechnology, always must
be notified to and cleared by the BMWi.
Companies Providing “Critical Infrastructure”
Facilities in the following seven areas are defined as
critical infrastructure if they reach certain thresholds:
E Energy: Production and distribution of electricity,
natural gas, gas, heating oil, and district heating;
E Water: Supply/disposal of fresh water and sewage;
E Food: Production, processing, and distribution of
food;
E IT/Telecom: Transmission, processing, and storage
of voice and data;
E Health: Inpatient medical care, manufacturing of
life-sustaining medicinal products, prescription
drugs, supply of plasma and human blood, distribu-
tion and transport of such products, and provision of
health services such as laboratories;
E B&I: Supply of cash, card-based money transfer,
conventional money transfer, settlement of securi-
ties, and derivatives; and
E Transportation: Transport of people and goods on
the road, by rail, by boat, and in the air; public
transport; and weather forecast and satellite naviga-
tion systems.
For example, companies producing, processing, stor-
ing, or selling food equaling or exceeding a volume of
434,500 tons or 350 million liters per year qualify as criti-
cal infrastructure. For hospitals, the threshold is 30,000
stationary treatments per year. Logistic centers qualify if
they process 17 million tons of goods per year. In the
financial industry, clearing and settlement services provid-
ers handling 18 million transactions per year are deemed
critical infrastructure, as are clearing and settlement ser-
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vices providers for securities and derivatives with a vol-
ume of 850,000 transactions per year.
Companies developing or adapting software designed
to run such infrastructure are also subject to these rules, ir-
respective of their size or the number of their customers.
Thus, the acquisition of a software company active in, for
instance, hospital information or core banking systems by
a non-EU investor also may be investigated and blocked.
Investment Approval Procedure
The BMWi may assess any direct or indirect acquisition
of 25% or more of the voting rights in a German company
(including German subsidiaries or branches of foreign
companies) by a non-EU investor that falls under the
extended AWV. The parties to such a transaction are
obliged to inform the BMWi about the signing to allow the
BMWi to catch relevant transactions early. The BMWi may
initiate a formal investigation of the transaction within five
years after signing, but only three months after it has been
informed about the transaction. The acquirer may ask for a
certificate of non-objection. Such certificate is deemed to
have been issued if the BMWi does not open a formal
investigation within two months after receipt of the
application.
If the BMWi formally opens the investigation, it must
make a decision within four months after receipt of all rel-
evant information. The BMWi may also ask for changes to
the transaction to protect Germany’s interest in public or
national security. While the law does not empower the
BMWi to prohibit the close of a transaction, the BMWi has
ample powers to unwind a deal.
Preliminary Comments and Guidance
Parties contemplating a transaction that is likely to fall
under the extended law on investment approval should take
its effects into consideration, particularly where the parties
are required to inform the BMWi about the transaction.
While a request for a certificate of non-objection will not
always provide the desired level of legal certainty, it is
likely to be a tool of choice that will be seen more often in
the future.
Three Key Takeaways
E Changes to Germany’s Foreign Trade and Payments
Ordinance dictate that the acquisition of a 25% stake
in a German company by investors from outside the
EU can be reviewed by Germany’s Ministry of Eco-
nomic Affairs and Energy.
E Seven areas defined as providing “critical infrastruc-
ture” are subject to the new provisions.
E Business entities considering a transaction that could
fall under the new law should consider its possible
implications for their plans.
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FROM THE EDITOR
A Global Flavor for 2017?
As the summer of 2017 begins to wane, speculation is
growing that this year could wind up posting a notable
decline for domestic M&A—possibly the lowest-volume
year for U.S. M&A since the depths of the past recession.
At the same time, however, global M&A is heating up, fu-
eled in particular by a boom in European deals. It could
well turn out that 2017 will be saved for many M&A shops
by their activity overseas.
Cross-border M&A activity totaled $630.9 billion dur-
ing first-half 2017, driven by increased levels of outbound
M&A from U.S. acquirers and growing inbound M&A for
European assets, according to Thomson Reuters data. This
accounted for 40% of overall M&A volume and the high-
est first-half volume since 2007.
And a surge in European deals is a major reason why
worldwide M&A activity hit $1.6 trillion during first-half
2017, up 2% from the first half of 2016. Compare that
relatively minor increase to the skyrocketing jump seen in
European M&A—M&A activity for European targets
totaled $449.0 billion during first-half 2017, up 33%
compared to the same period in 2016. The growth is a fresh
phenomenon: activity rose 45% year-on-year in the second
quarter to $234 billion. Hernan Cristerna, global M&A co-
head at JPMorgan Chase, told Reuters in July that “the EU
recovery is happening and has made companies more at-
tractive, even if there are increased regulatory hurdles.”
Speaking of the latter, this issue of The M&A Lawyer
has another in-depth conversation with Jones Day on the
current state of antitrust. Where in our June issue, we
discussed the cloudy state of domestic antitrust in the
Trump era, our focus now turns to antitrust regimes in the
European Union, China, Japan, and Korea, among other
areas. It’s a different story than in the U.S., with interna-
tional regimes in some cases being far more aggressive
than U.S. antitrust regulators. In particular China, barely
on the radar for global antitrust as little as a decade ago, is
becoming a potentially deal-chilling factor for global
dealmakers.
As Jones Day’s Peter Wang says in our conversation,
“development [in Asia] has been generally moving towards
convergence with the older, more established antitrust
regimes. In particular, Europe. The two most aggressive
jurisdictions in Asia—China and Korea—have tended to
view the EU model as being closer to their own legislative
or legal models. . .Whereas the U.S. was considered kind
of an outlier because it was more permissive, and case-
based, and the agencies have to go to court to sue.” Should
the new U.S. regime cut back on aggressive theories, “that
in turn might leave Asian authorities more out on a limb.
They may end up getting ahead of U.S. enforcers on deals.”
Chris O’Leary
Managing Editor
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EDITORIAL BOARD
CHAIRMAN:
PAUL T. SCHNELL
Skadden, Arps, Slate, Meagher & FlomLLP
New York, NY
MANAGING EDITOR:
CHRIS O’LEARY
BOARD OF EDITORS:
BERNARD S. BLACK
University of Texas Law School
Austin, TX
DENNIS J. BLOCK
Greenberg Traurig
New York, NY
ANDREW E. BOGEN
Gibson, Dunn & Crutcher LLP
Los Angeles, CA
H. RODGIN COHEN
Sullivan & Cromwell
New York, NY
STEPHEN I. GLOVER
Gibson, Dunn & Crutcher LLP
Washington, DC
EDWARD D. HERLIHY
Wachtell, Lipton, Rosen & Katz
New York, NY
VICTOR I. LEWKOW
Cleary Gottlieb Steen & Hamilton LLP
New York, NY
PETER D. LYONS
Freshfields Bruckhaus Deringer LLP
New York, NY
DIDIER MARTIN
Bredin Prat
Paris, France
FRANCISCO ANTUNES MACIEL
MUSSNICH
Barbosa, Mussnich & AragãoAdvogados,
Rio de Janeiro, Brasil
PHILLIP A. PROGER
Jones Day
Washington, DC
PHILIP RICHTER
Fried Frank Harris Shriver & Jacobson
New York, NY
MICHAEL S. RINGLER
Wilson Sonsini Goodrich & Rosati
San Francisco, CA
PAUL S. RYKOWSKI
Ernst & Young
New York, NY
FAIZA J. SAEED
Cravath, Swaine & Moore LLP
New York, NY
CAROLE SCHIFFMAN
Davis Polk & Wardwell
New York, NY
ROBERT E. SPATT
Simpson Thacher & Bartlett
New York, NY
ECKART WILCKE
Hogan Lovells
Frankfurt, Germany
GREGORY P. WILLIAMS
Richards, Layton & Finger
Wilmington, DE
WILLIAM F. WYNNE, JR
White & Case
New York, NY
The M&A Lawyer July/August 2017 | Volume 21 | Issue 7
19K 2017 Thomson Reuters
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