As investors scour the world for growth, regulators are placing cross-border deals under ever greater scrutiny, and a new regulatory world order is emerging. Understanding it is essential.
The global M&A market has returned to its previous highs, but what sets this cycle apart is the rise of the mega-deal. According to Dealogic, during the first nine months of 2015, 45 deals worth more than US$10 billion accounted for more than a third of total M&A activity.
With size comes complexity. A greater portion of deals are now cross-border in nature, and as economies have become more interconnected and global, companies navigate the globe in search of growth. Shareholder activism is putting pressure on company boards to break up or seek growth through acquisition, but finding the right target and negotiating a deal that will deliver value is only part of the challenge. Big cross-border transactions are attracting greater scrutiny from regulators and governments than ever before.
With forward planning, companies can coordinate their efforts across borders and anticipate where and in what form they will face antitrust investigations
Deals that make strategic sense may be welcomed by investors, but can be repelled by regulators. Since the last M&A boom of 2007 there has been a proliferation of new merger control regimes across the globe, and this proliferation has led to heightened execution risk for big cross-border deals. National governments have also added a further layer of complexity and control, and they scrutinise the impact of foreign acquisitions on local jobs, economies and on national security. Regulatory and political risk can have serious consequences for a deal. It can cause parties to withdraw from their transaction altogether, or force them to re-think the deal and make disposals, which could undermine its original strategic logic.
Fortunately, having a detailed understanding of this new regulatory world order can equip potential acquirers with the tools they need to navigate it. With forward planning, companies can coordinate their efforts across borders and anticipate where and in what form they will face antitrust investigations. That enables them to gain a more realistic understanding of what it will take to get a deal across the finish line.
As global M&A activity is projected to continue to grow in 2016, companies that can identify the best opportunities of today and understand how to execute them will be the winners of tomorrow.
Please follow the links below to read articles in our report, or read the full the report here.
Lessons to keep in mind for your next complex global deal
Antitrust assessment by regulators around the world is becoming increasingly more complex and less predictable. And with global M&A activity approaching boom levels, companies need to plan carefully when preparing for their next big deal. To read the article please click here.
The globe-trotter's guide to merger control: How to avoid falling into traps
Having a sound knowledge of the intricacies of merger control regimes and thresholds is essential when guiding a complex crossborder M&A deal over regulatory hurdles to successful completion. To read the article please click here.
National security clampdown on foreign deals
Countries around the world have been increasingly focusing on national security reviews of foreign direct investments into their markets. To read the article please click here.
European merger control: Well-oiled machine or spluttering engine?
Commissioner Margrethe Vestager was in a celebratory mood when she addressed an audience in Brussels in March 2015 as the EU merger control body celebrated its 25th anniversary. To read the article please click here.
Gun-jumping triggers trouble
In merger control, gun-jumping refers to two distinct types of prohibited practices: failure to notify authorities of a transaction triggering merger thresholds, and implementing a notified transaction before receiving merger clearance from the relevant merger authority. Both behaviours can result in hefty fines. To read the article please click here.
Never say never
When circumstances change, regulators can reverse previous decisions on merger rulings, encouraging companies to reconsider transactions that they initially believed were too challenging to pursue. To read the article please click here.
Private equity firms: In the line of antitrust fire?
There was a time when private equity firms may have seen themselves as arms-length financial investors but regulators are increasingly holding them responsible for the behaviour of their portfolio companies. To read the article please click here.
Remedies in multijurisdictional merger control: Curse or cure?
The rising number of enforcers imposing remedies in international merger control increases the level of uncertainty around whether and in what form a complex deal can be navigated through competition authorities. To read the article please click here.
Below-threshold transactions: Enforcement and exposure
Whether a jurisdiction will investigate a consummated deal that did not require pre-close notification varies widely by country. The US and China provide examples to highlight the range of approaches to merger control where no notification is required. To read the article please click here.
The world of global M&A: Trends, notifications and timelines
To view the infographic please click here.
Video: White & Case partners discuss merger control: Getting your deal over the line
Partners Rebecca Farrington, Mark Powell and Axel Schulz discuss how to get a cross border deal with multiple merger control reviews over the line. To watch the video please click here.
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