Merger Clearance Investigations
Increased rigor and emphasis on internal documents
Historically, when two companies have proposed a merger or acquisition, European competition authorities evaluated various economic and market analyses to determine whether the transaction would establish too dominant of a position for the companies in any given market. Now, regulators, particularly DG Comp and competition agencies in the UK, Germany and France, are increasingly interested in the review of contemporaneous internal documents.
Some recent Phase II investigations have required companies to produce anywhere from a few hundred thousand documents to more than two million. In one major life sciences European merger that our team at FTI Consulting supported, the client had less than 30 days to respond. Producing high volumes of data in such a short timeframe means that counsel must often turn over documents before they’ve adequately reviewed the content, so they are forced to make blind decisions about the disclosure. An overall increase in merger filings is also causing the volume of work to rise, as is the frequency of examination by the competition authorities: over the last three years, DG Comp has intervened on almost one in three mergers. Adding to the pressure are expectations from board members, management, and shareholders to rapidly close a deal.
Many lawyers facing these types of matters may be doing so for the first time. This makes leaning on forensic technology experts with experience in meeting extensive, deadline-driven demands for internal documents more valuable. A clear approach can have a profound impact on both the cost and the outcome of the process. Working with professionals that understand these processes, and the application of a wide range of advanced technologies and workflows is essential. This will ensure the legal team is proceeding with sound guidance, can complete the project defensibly and on time, and secure clearance for the merger to move forward.