Global Antitrust Filings in M&A Transactions February 25, 2014 Today’s Speakers Peter Crowther Richard Falek Steve Harris Managing Partner, Brussels office Partner Partner Brussels / London New York Washington, D.C. / New York +32 2 891 8333 / +44 (0)20 7011 8750 +1 (212) 294-3314 +1 (202) 282-5415 [email protected] [email protected] [email protected] ©2014 Winston & Strawn LLP 2 Global Merger Control Issues Understanding and Managing the Worldwide Antitrust Clearance Process Steve Harris Antitrust Merger Control Now Truly Global • The US was the first country to establish mandatory antitrust merger reviews for certain transactions, with the 1976 Hart-Scott-Rodino (HSR) Act • The EU, Canada, and a few other jurisdictions followed suit soon thereafter • Post-2000 boom: now, over 100 countries have antitrust merger review laws ©2014 Winston & Strawn LLP 4 The Basics • Merger control laws try to stop deals likely to harm competition before they close (“incipiency” law) • Only deals that meet certain criteria (“thresholds”) are subject to such reviews • Likely positions of agencies in established jurisdictions reasonably predictable • In other jurisdictions, agencies’ views are hard to predict, and can be affected by protectionism, politics, lack of experience, etc. • It doesn’t matter if there is a real competition issue caused by the deal – you will likely still have to file in some jurisdictions ©2014 Winston & Strawn LLP 5 Nuts and Bolts Mandatory or Voluntary? • Most countries: mandatory filing for deals meeting thresholds (e.g., U.S., EU, China, Brazil, Japan, Korea). • A few countries: voluntary (e.g., UK, Australia) ©2014 Winston & Strawn LLP 6 Nuts and Bolts Suspensory or Non-suspensory? • In suspensory jurisdictions, it is illegal to close the deal before “clearance” is obtained • Most countries are suspensory ©2014 Winston & Strawn LLP 7 Nuts and Bolts Active or Passive Clearance? • Active: Approval requires affirmative act of agency • Passive: Approval requires only the passage of time without notice from agency that deal is challenged or blocked ©2014 Winston & Strawn LLP 8 Where do we have to file? Filing Thresholds • Vary a lot • Most based on one or more of the following tests – Revenues (sales) of buyer and/or seller (in Jurisdiction X or Worldwide) – Market shares in that jurisdiction ©2014 Winston & Strawn LLP 9 What happens if we don’t file? • Mandatory jurisdictions may impose: – Large fines – Orders requiring the deal to be undone (“unscrambling the egg”) – Closer scrutiny of the deal and more intrusive remedies – Closer scrutiny of subsequent deals, or fines when later deal brings earlier failure to file to light – (worst case): prohibit company from doing business in that jurisdiction/ revoke business license (e.g., China) • Voluntary jurisdictions: – No fines or other penalties, but: – Not filing does not guarantee that deal will not be reviewed if the agency chooses to do so – if so, must cooperate with review or risk fines ©2014 Winston & Strawn LLP 10