This article is an extract from The Merger Control Review, Edition 13. Click here for the full guide.

I Introduction

When planning an acquisition or merger involving global companies, merging parties often concentrate on obtaining merger approvals in the United States and the European Union, in the expectation that other countries' regulators would follow the substantive lead provided by those authorities. However, with the growth in national merger control systems and other regulators' increased activity, other countries' regulators may also significantly impact a deal. Similarly, the extent of international cooperation on mergers is steadily growing.2 For example, the International Competition Network (ICN) mergers working group included 21 countries in 2006, but that had risen to over 60 in 2020.3

So, while in practice the US and the EU remain 'priority' jurisdictions because of the economic importance of the territories they cover and their influence, parties should also consider the possible need for remedies in other jurisdictions, tailored to deal with other specific concerns, or the application of similar principles to local markets.

Some local interventions remain pragmatic rather than strict, because sometimes a competition authority in a smaller country may consider that it cannot enforce its will on a big deal occurring abroad when there are no local assets in that country, or because the authority may be concerned that if it presses a company too far, the company might just withdraw from the local market.4 However, even then, such a situation may still lead to behavioural remedies in that country.

With all of this in mind, merger planning should cover (1) aligning the timing of filings, (2) substantive assessments, and (3) remedy design worldwide, dealing with any jurisdiction where substantial lessening of competition or dominance issues could arise.5 Such review should also assess whether other national economic or public interest factors could exist.

Parties must also take account of authorities' recent practice regarding remedies. A key devhelopment to be watched in this context is the apparent increasing reluctance to accept behavioural remedies. The US Federal Trade Commission (FTC) has refused to accept remedies in several recent transactions and instead wanted them blocked.6 In January 2022, Jonathan Kanter, the Assistant Attorney General of the Antitrust Division at the US Department of Justice (DOJ), also indicated that he would rather block mergers that are likely to lessen competition than accept complex settlements, whether behavioural or structural:

I am concerned that merger remedies short of blocking a transaction too often miss the mark. Complex settlements, whether behavioral or structural, suffer from significant deficiencies. Therefore, in my view, when the division concludes that a merger is likely to lessen competition, in most situations we should seek a simple injunction to block the transaction. It is the surest way to preserve competition.7

Below we highlight some prominent cases that illustrate the diverse issues raised in international merger remedies: (1) the Seagate/Samsung and Western Digital/Viviti cases; (2) Dow/DuPont; (3) Glencore/Xstrata; (4) two examples of particularly effective cooperation between agencies, Cisco/Tandberg and UTC/Goodrich; (5) Danaher/GE Healthcare Life Sciences Biopharma; and (6) Cargotec/Konecranes (see Section II).8 We then outline some of the key context, drawing on Organisation for Economic Co-operation and Development (OECD) studies9 (see Section III). We also refer to the ICN's Merger Guides. Finally, we offer some practical conclusions for companies and their advisers (see Section IV).

II Prominent cases

i Seagate/Samsung and Western Digital/Viviti

Although not the most recent examples, these two global mergers still are particularly interesting for international merger remedies.

As a result of the two transactions, five hard disk drive (HDD) manufacturers became three and, in some market segments, the level of concentration was greater.10 Ultimately, most jurisdictions decided to clear the transactions in the sector for HDDs for storage of digital data on the condition that Western Digital (WD) sold some production assets to Toshiba. However, while China's Ministry of Commerce (MOFCOM)11 allowed the transactions to go through, it imposed materially different remedies with worldwide impact. The main points of interest are as follows.

First, the EU, the US and China each had different approaches to the essentially simultaneous transactions. The European Commission (EC) treated them under a 'first come, first served' rule, so that Seagate/Samsung, which was notified to the EC one day before WD/Viviti, was assessed against the market situation before the WD/Viviti transaction, while WD/Viviti was assessed against the backdrop of Seagate/Samsung.12 The FTC treated both cases as occurring simultaneously. MOFCOM assessed each deal separately, as if the other had not happened.

Second, both the US and EU authorities13 cleared the Seagate/Samsung transaction without any remedy, whereas MOFCOM required the two businesses to be held separate until potential subsequent approval.

Third, the EU, US, Japanese and Korean authorities diverged from China on what remedies were required in WD/Viviti. The EU required WD/Viviti to divest certain production assets, including a production plant, to an approved third party before closing the deal.14 The US did the same, requiring a named upfront buyer, Toshiba.15 The Japanese and Korean authorities also required similar divestitures.16 However, in addition to this divestiture, MOFCOM required that WD and Viviti be held as separate businesses until approved.17

Fourth, MOFCOM imposed other behavioural obligations.18 For example, Seagate was required to invest significant sums during each of the next three years to bring forward more innovative products.

Fifth, there was widespread cooperation between competition authorities. For example, the FTC states that its staff cooperated with authorities in Australia, Canada, China, the EU, Japan, Korea, Mexico, New Zealand, Singapore and Turkey, including working closely on potential remedies.19 Since many of these authorities did not have bilateral or multilateral cooperation agreements, one can only imagine that this was a varied and informal process.

Finally, at a practical level, the same trustees were appointed in the US and the EU for the WD/Viviti divestiture remedy, while others were appointed in China, covering the rather different behavioural remedy of monitoring firewalls between the two companies.

MOFCOM's approach raised several points

First, many of the customers, the computer companies buying the HDDs, manufacture in China, and some of the merging parties' production facilities were also in China. So one could argue that China had a particularly strong interest in these cases.

Second, in both decisions MOFCOM emphasised its concern to allow large computer manufacturers to keep their 'procurement model', in which they divide their demand among two to four manufacturers.20 MOFCOM was also evidently concerned by the prospect of reduced competition; it noted that when WD lost HDD production capacity because of floods in Thailand in 2011 and raised selling prices of HDDs, other HDD manufacturers followed, with some product prices rising over 100 per cent.21

Third, one may interpret MOFCOM's imposition of hold-separate remedies as being diplomatic to its US and EU counterparts when it was not comfortable with the level of concentration if the two transactions went through. Rather than outright prohibitions, the hold-separates gave opportunities to see if things might change in the future and to see whether Toshiba, with its new assets, could develop to become a third force in HDD.

However, the problem for the parties was clearly that it left them unable to achieve the desired synergies from their investments and that they faced considerable uncertainty as to what the future held. In short: while the equity transfers could occur, the parties did not know when, if at all, they would be able to fully integrate the businesses, or if they would later face an order to divest.

In October 2015, MOFCOM partially lifted the hold-separate obligation on WD/Viviti and, in November 2015, MOFCOM removed the hold-separate obligation on the Seagate/Samsung transaction, allowing full integration (while still maintaining certain other behavioural commitments).22 In both cases, the remaining conditions were valid until October 2017 and they lapsed then some five or six years after the transactions closed.

Hold-separate remedies of this kind are not usual in the US or the EU, mainly because authorities favour clear-cut structural remedies. They do not generally leave matters in suspense, with some scepticism as to whether, with common ownership, two businesses will compete. The use of such remedies is therefore a topic of some controversy.23

ii Dow/DuPont

The merger between Dow and DuPont is a good example of a transaction requiring clearance in multiple jurisdictions and of regulators requiring differing remedies.24 Both parties were leading agrochemical companies and they had overlapping activities in many markets including crop protection and pesticide markets (including herbicides, insecticides and fungicides) and petrochemical markets.

In March 2017, the EC cleared the transaction subject to extensive structural remedies.25 Among other things, the EC found that the merger would have reduced competition in some EU Member States on the markets for certain pesticides. To address these concerns the parties proposed, among other things, to divest DuPont's pesticide business. The divestment was subject to an upfront buyer requirement, so the parties could not close their transaction until the EC approved the buyer.26

In addition, the EC was concerned that the transaction would reduce innovation.27 Controversially, its decision highlights not only potential competition between the parties and their overlapping pipeline products but also reduced innovation at the overall industry level, rather than on particular relevant antitrust markets. To address these concerns, the EC required that the parties divest almost all of DuPont's global research and development (R&D) organisation.28

In May 2017, MOFCOM also cleared the transaction but subject to both structural and behavioural remedies.29 MOFCOM's structural remedies largely mirror those entered into in the EC. In addition, however, MOFCOM required behavioural commitments apparently to address issues that were specific to China. These included obligations to supply relevant products to Chinese customers 'at reasonable prices (i.e., not higher than the average price over the past 12 months)' for a period of five years and an obligation not to require distributors to sell certain products on an exclusive basis during the same period.30

In June 2017, the DOJ announced that it would require divestments of a number of crop protection and petrochemical products before the deal could proceed.31 Unlike the EC, the DOJ did not, however, require any divestments to address a potential reduction in competition in innovation. Noting its close cooperation with the EC during its review of the transaction, the DOJ's press release states that '[l]ike the European Commission, the Antitrust Division examined the effect of the merger on development of new crop protection chemicals but, in the context of this investigation, the market conditions in the United States did not provide a basis for a similar conclusion at this time'.32 The DOJ also did not require any behavioural remedies.

iii Glencore/Xstrata

In October 2012, the South African Competition Commission (SACC) recommended clearance, with remedies, of the acquisition of Xstrata's mining business by Glencore's trading and production group, after close scrutiny of the acquisition's implications for coal supply in South Africa.33 The SACC found that there was no substantial lessening of competition. However, in the public interest, conditions were imposed regarding proposed job losses, limiting them to 80 employees initially, with a further loss of 100 lower-level employees a year later and a financial contribution towards their retraining. Similar conditions have been imposed in many other cases.34

In April 2013, MOFCOM cleared the acquisition, subject to different remedies compared to those previously agreed with the EU.35 MOFCOM raised concerns despite market share levels on a worldwide or Chinese basis that generally would not raise concern in other jurisdictions.

Nevertheless, MOFCOM imposed structural and behavioural remedies, apparently after consultations with other governmental departments. Glencore agreed:

  1. to dispose of Xstrata's Las Bambas copper mine project in Peru by June 2015;36
  2. to guarantee a minimum supply of copper concentrate to Chinese companies until 2020, including pre-defined volumes at negotiated prices; and
  3. to continue to sell zinc and lead to Chinese producers under both long-term and spot prices at fair and reasonable levels until 2020.

It appears, therefore, that the Chinese authorities were concerned about national economic development goals and the fragmented nature of Chinese buyers with weak bargaining power, given Chinese dependency on imports for these metals.37

The risk of broader factors being a basis for intervention and remedies is therefore another important factor to bear in mind in some jurisdictions.

iv Cisco/Tandberg and United Technologies Corporation/Goodrich

Cisco's acquisition of Tandberg, which led to overlaps in videoconferencing solutions, and United Technologies Corporation's (UTC) acquisition of Goodrich in the aviation sector, are two examples of effective cooperation between regulators, here the EC and the DOJ and, in UTC/Goodrich, additionally with the Canadian Competition Bureau (CCB).

In Cisco/Tandberg, Cisco proposed remedies to the EC to increase interoperability between its products and those of its competitors.38 The DOJ's press release, announcing that it would not challenge Cisco's acquisition, expressly noted the commitment entered into with the EC. Assistant Attorney General Christine Varney noted: 'This investigation was a model of international cooperation between the United States and the European Commission. The parties should be commended for making every effort to facilitate the close working relationship between the Department of Justice and the European Commission.'39

Similarly, in UTC/Goodrich, the EC, the DOJ and the CCB all approved UTC's acquisition on the same day. The EC and the DOJ accepted very similar remedies, which were of both a structural and a behavioural nature.40 The CCB noted that these remedies 'appear to sufficiently mitigate the potential anti-competitive effects in Canada' and, in particular, since no Canadian assets were involved, it decided not to impose any remedies.41 It appears that the three authorities were in frequent contact throughout this investigation. The EC and the DOJ worked closely on the remedies' implementation, jointly approving the hold-separate manager and monitoring trustee.42 The DOJ's press release also noted its discussions with the Federal Competition Commission in Mexico and the Administrative Council for Economic Defence in Brazil.

v Danaher/GE Healthcare Life Sciences Biopharma

Danaher's acquisition of GE Healthcare Life Sciences' Biopharma business (GE Biopharma) is also an interesting example of a merger involving cooperation between multiple agencies, in this case in Brazil, China, the EU, Israel, Korea and the US, both in analysing the transaction and remedies.43

Given the complexity of the markets,44 the cooperation appears to have been useful in aligning remedies.

Both parties were suppliers of products and services used in the bioprocessing industries and the merger involved overlaps in several markets.45 The Brazilian and Japanese authorities approved the transaction without any remedy,46 whereas the parties offered to divest several businesses to alleviate competitive concerns raised by the agencies in China, the EU, Korea and the US.

The remedies, mainly focusing on concerns around actual competition, consisted of the divestment of several of Danaher's businesses. China's State Administration for Market Regulation (SAMR) also had concerns regarding potential competition, requiring Danaher to also provide the purchaser of the divested business package with an unfinished project and to continue R&D for two years after the closing of the deal, in addition to divestment of several businesses.47

As for the timing of the regulatory process, following the announcement of the deal in February 2019,48 the merger control review procedures took different paths in the EU, the US and China. The parties notified the merger to the EC in November 2019, and obtained conditional approval in December 2019 after a Phase I review of the transaction. The EC granted purchaser approval in a separate decision in March 2020.49 This is another example of the time constraints in a Phase I review not allowing the EC to review and approve the purchaser at the same time as it analysed the main transaction50 (even though the proposed purchaser was already known).51

In China, the parties first notified in April 2019, and then withdrew the notification to refile in December 2019. The SAMR conditionally approved the merger in February 2020. Similar to the EC procedure, the SAMR approved the same proposed purchaser of the divestment businesses in a separate decision. Danaher completed the sale of the divestiture to Sartorius on 30 April 2020.52

In contrast to the two-step procedure in China and the EU, the last regulatory authority to approve the Danaher/GE Biopharma transaction conditionally, the FTC, announced its approval of the main transaction and the proposed purchaser at the same time.53

Interestingly, it appears that the same monitoring trustee was appointed, at least in the US and the EU, offering efficiencies in the implementation and oversight of the divestment plan.54

vi Cargotec/Konecranes

Cargotec's proposed merger with Konecranes – both of which are global leaders in container and cargo handling equipment – is a recent example of antitrust agencies adopting diverging approaches regarding remedies despite an apparently close and constructive collaboration55 among, notably, the DOJ, the Australian Competition Authority (ACCC), the EC and the UK Competition and Markets Authority (CMA). While the EC cleared the transaction with structural remedies on 24 February 2022,56 the parties abandoned the transaction on 29 March 2022 following a prohibition from the CMA.57 One day before the CMA's prohibition, the DOJ had informed the parties that the proposed settlement did not address its concerns.58

While the EC's conditional clearance was an exception compared to the approaches adopted elsewhere, this does not mean that there was not valuable cooperation between the different authorities. On the contrary, the authorities reiterated the importance of joint efforts and their commitment to cooperation. The Assistant Attorney General in the DOJ's Antitrust Division underlined that the authorities reached similar substantive outcomes and that 'efforts to engage in regulatory arbitrage didn't work'.59 EU Executive Vice President Vestager emphasised that EU and UK regulators had the same analysis of the problems posed by the deals, but a 'different approach' to the remedies.60 Notably she highlighted that, given the positive market reaction to the companies' proposed remedies and the fact that the European courts would be able to review the EC's decision, the EC had little discretion but to clear the deal subject to the remedies.

III Context

There are a number of key points that should be borne in mind when considering international merger remedies.

First, international mergers tend to present two types of remedy situation: local remedies and international remedies common to many jurisdictions. Unsurprisingly, when addressing international remedies, there is potential for conflict both in substantive assessments and remedies, since the competition authorities work with their specific laws and from their different regional or national perspectives, and often with different approaches61 and inputs (e.g., in terms of market testing results).62

Second, as noted above, there is increasing international cooperation on remedies.63

There are, for example, frequent contacts between authorities through the OECD64 and the ICN.65 The work of these organisations is in parallel and is not case-specific,66 but rather provides a forum for regular discussions and a network of contacts between individuals, so that authorities can notify each other and discuss broadly what they are doing about a particular case. However, such coordination should not be underestimated and many of the examples discussed and quoted in these reports are very revealing.67

For example, in October 2013, the OECD Competition Committee held a 'Roundtable on Remedies in Cross-Border Merger Cases'. Among other things, the Secretariat pointed to cooperation and coordination as effective tools to prevent parties from playing authorities against each other, such as using commitments accepted by one authority as leverage against others.68 The Roundtable report emphasised that cooperation between authorities is most effective if parties grant confidentiality waivers and allow authorities to communicate early on in their investigations and if the timing of reviews is aligned insofar as is possible.69 The Roundtable report also highlighted the advantages of appointing common enforcement and monitoring trustees to enforce cross-border remedies.70

There has also been an ICN initiative to improve cooperation between competition authorities on mergers. Notably, the ICN Merger Working Group presented a 'Practical Guide to International Enforcement Cooperation in Mergers' (the ICN Practical Guide) at the ICN 2015 Annual Conference in Sydney.71 The purpose of this Guide, which is quite short (14 pages), is to facilitate effective and efficient cooperation between agencies through identifying agency liaisons and possible approaches for information exchange. The Guide creates a voluntary framework for inter-agency cooperation in merger investigations and provides guidance for agencies willing to engage in international cooperation, as well as for parties and third parties seeking to facilitate such cooperation. For example, the Guide explains the need for timing alignment to facilitate meaningful communication between agencies at key decision-making stages in an investigation; how cooperation between agencies may vary in a case; how information (including documents) may be exchanged through waivers; how agencies may organise joint investigations (e.g., interviews); and – last but not least for present purposes – how agencies may cooperate on remedy design and implementation.

In 2016, the ICN also published a 'Merger Remedies Guide', outlining best practices on remedy design and complementing the ICN Practical Guide.72 This is an extensive work (some 54 pages). It again emphasises the need for timing alignment and international cooperation on remedies in multi-jurisdictional mergers and offers 'practical tips' for competition authorities on how to do that73 and examples of cooperation on remedies.74

There are also other layers of cooperation based on bilateral agreements. Clearly EC and US cooperation is close and important.75 EC and DOJ cooperation has developed from their first cooperation agreement in 1991,76 with, more recently, the 2011 Best Practices on Cooperation in Merger Investigations.77 There are also specific agreements between the EU and Switzerland,78 and between Australia and New Zealand.79 Such cooperation can be case-specific, where supported by appropriate waivers of confidentiality.80 In 2019, the DOJ cooperated with 11 international counterparts on 20 different merger matters.81 The DOJ and the FTC have concluded a general 'best practice' agreement with the CCB;82 the ACCC signed a memorandum of understanding with MOFCOM to enhance communication on merger review cases;83 and in October 2015, the EC signed a best practices framework agreement with MOFCOM for cooperation on reviewing mergers.84 Since then, the EC has cooperated with (what is now) the SAMR in at least five merger review cases.85

Beyond this, many competition authorities emphasise that they cooperate even without such formal structures.86 Several authorities gave examples of cooperation in cross-border merger cases. Some agencies held joint discussions with the parties to the merger and many exchanged documents after the necessary waivers had been granted.87 Cooperation has often led to coordination of remedies.88

Agencies may cooperate even without waivers on the basis of public information or 'agency non-public information' such as an agency's procedures regarding timing and views on the competitive assessment.89 The Nestlé/Pfizer Nutrition case is an example of successful cooperation between agencies even without the use of waivers. The ACCC started cooperating with the Competition Commission of Pakistan (CCP) while the two agencies' investigations of the proposed acquisition were at different stages: the ACCC was still in its preliminary investigation stage, while the CCP was already reviewing the transaction in Phase II. The parties did not provide these two agencies with waivers. As a result, discussions between the two agencies were limited to non-confidential information. However, it appears from the ICN Practical Guide that the cooperation was beneficial for both agencies' understanding of the relevant markets and theories of harm.90

In the ICN Practical Guide, when discussing the Thermo Fisher Scientific/Life Technologies case, it is also emphasised that the degree of cooperation between agencies may vary, even in the same transaction.91

Third, while a competition authority may decide to defer to review by more established authorities, many also consider that reliance on a foreign authority might not deal adequately with local concerns.92 This was well illustrated in Singapore's contribution to the OECD report, 2011:

It is important to note that although the acceptance of commitments in overseas jurisdictions may be relevant in [The Competition Commission of Singapore's, (CCS)] assessment of the competitive impact of the merger in Singapore, commitments accepted by overseas competition authorities do not necessarily imply that CCS will allow the merger to proceed in Singapore. Any overseas commitments must be viewed in light of the facts and circumstances of the case, to see if they are capable of addressing competition concerns arising within Singapore, if any.93

Interestingly, in the Unilever/Sara Lee case, the SACC also indicated in the OECD Cross-border Merger Control Report 2011 that it looked at whether it was correct to require divestiture of the Status brand, when the EU had already required divestiture of the Sanex brand. The SACC noted that, since it does not make practical and commercial sense only to own a brand in certain parts of the world, South Africa could be faced with a double divestiture. The SACC considered whether the divestiture of Sanex would have been enough for South Africa as well, but concluded it would not, since the brand was still small there.94 The SACC therefore appears to have shown sensitivity for the impact of other jurisdictions' remedies internationally, while also showing that such remedies still do not outweigh a local concern.

Fourth, when considering worldwide transactions, it is important to bear in mind the related point that each competition authority views things from its own jurisdictional perspective. Notably, even when the US and EU authorities find worldwide markets and recognise worldwide dynamics, the US decision concerns the effect on US commerce and the EU decision is based on the compatibility of the transaction with the (EU) internal market.95 Even if contacted by and cooperating with other competition authorities, the US and EU competition authorities are not ruling on the effects elsewhere, in, for instance, Brazil, Korea or Singapore.

As Korea notes in the OECD report, 2011:

As for now, only a few large jurisdictions like the US or EU have full control over large-scale international M&As. However, because such large competition authorities tend to impose remedies focused on anti-competitive effect on their own domestic markets, adverse impact [on] developing countries might suffer [if] not adequately controlled.96

The recent Google/Fitbit transaction is a good example of this, with the issue in Australia. While the authorities in the EU, Japan and South Africa approved the transaction conditionally, at the time of writing the ACCC is still reviewing it. The ACCC has already indicated doubts regarding the competitiveness of the merger and the adequacy of the remedies approved in other jurisdictions in light of Google's accumulation of data.97

Fifth, a competition authority may consider that it cannot just rely on another jurisdiction's remedy to ensure enforcement.98 An authority may need its own order, albeit modelled generally on a remedy accepted in other jurisdictions. For example, in Agilent Technologies/Varian, the ACCC required Agilent to comply with its commitments to the EC to divest itself of several businesses and accepted the two proposed purchasers.99 In so doing, the ACCC noted, however, that the purchasers had 'established and effective Australian distribution arrangements'. In other words, the ACCC checked that the EC remedy also worked in Australia.100

Sixth, a competition authority may decide that it cannot order a structural remedy involving assets outside its jurisdiction because it lacks the means to enforce it, and therefore accepts a behavioural remedy instead. This was, for example, the position of the UK in Drager/Airshields.101 It also appears often to be the position of newer competition authorities, or those in smaller countries.102

Seventh, managing timing as far as possible is a major issue in achieving cohesive remedies. Competition authorities do not like it when a favourable review in one jurisdiction is then used to pressurise them to follow suit. They also do not like being a 'non-priority' jurisdiction that is only contacted late in the day. Unsurprisingly, therefore, they advocate simultaneous contacts to facilitate simultaneous reviews of the same transaction. Practitioners also tend to emphasise the need to 'work back from the end' (i.e., where possible filing earlier in jurisdictions that may take longer to rule). They also try to manage things so that the authorities are 'in sync' at the key time when they have to make similar closing decisions on remedies.

Two FTC officials have made the point well in the context of remedies, noting a case where time was lost dealing with the unique concern of an agency brought into the process late on. It appears that an upfront buyer had been agreed on by all the reviewing authorities previously, 'but then a new agency was brought in at the last minute and was unable to approve the potential buyer. We had to locate and approve another buyer that satisfied all agencies, adding months to the process and delaying the deal.'103

Usefully, they emphasise the need to plan the remedies phase, especially if an upfront buyer may be required,104 taking into account the differences in authorities' practices, such as the way that the FTC selects a purchaser itself, while in the EU the parties or the divestment trustee may carry out that task, then propose the result to the EC; and the actual timing requirements of each authority's procedure requiring publication of proposals for comment, etc.

Interestingly, in the Springer/Funke cases (concerning TV programme magazines), the German and Austrian competition authorities cooperated in the implementation of remedies that addressed different competition concerns in each country. According to the ICN Practical Guide, due to the structure of the transaction, the merging parties could only avoid serious risks for the implementation of the remedies if they were able to obtain the Austrian agency's approval first. The timing and sequence of the two conditional clearance decisions and their implementation were therefore critical. The German and Austrian authorities coordinated on timing to ensure the successful completion of the transaction.105

Coordination on timing can also be complicated by post-completion antitrust reviews. As noted above, recently, Argentina's National Commission for Competition Defence raised concerns about the Linde/Praxair merger and indicated an intention to impose remedies three years after the parties' notification and the closing of the deal.106

IV Conclusions for companies and their advisers

In light of the above, companies and their legal advisers should plan on a global scale, including as regards remedies, especially if some jurisdictions want an upfront buyer.

Parties should not assume that the more established competition authorities in the US and the EU are the only ones that matter. Clearly, those authorities are critically important, because they are responsible for large markets and their procedures and analysis are highly developed, which means that their decisions are often influential in other parts of the world.

However, markets that appear worldwide in scope may often be more limited in practice, which may mean that important and varied concerns of other authorities need to be addressed. Nor should parties assume that the newer authorities, or those in smaller countries, which in the past have tended to defer to the larger, longer-established authorities, will always do so. Whether because of concerns about local effects, or through a desire to have a locally enforceable remedy, those authorities may also intervene.

Particularly in light of situations like MOFCOM's remedies in Seagate/Samsung and WD/Viviti, parties must consider carefully the purchaser's 'walk-away' rights, any related vendor's break-up fees and valuation rules in the purchase agreement. Given that the initial clearance in those cases was just an equity clearance, not allowing the business synergies, some purchasers may consider this to be simply too onerous and, in effect, not a clearance; nor will they be willing to deal with ongoing hold-separates and the uncertainty of subsequent review. As shown in that case, remedies like this can take a long time to work through.

Parties should also consider how to involve all relevant competition authorities appropriately and to facilitate those authorities conducting their investigations in parallel and in consultation with each other, taking into account their likely demands (e.g., upfront buyer or not) and the practicalities of different timings for the approval of such remedies.107

That may mean:

  1. talking to the authorities concerned prior to filing, and filing earlier in one jurisdiction than another, or accepting a 'stop-the-clock' solution to allow an authority to catch up;
  2. a willingness to offer waivers of confidentiality, such as the standard models available through the ICN or the websites of the EU and US authorities (although clearly provided that the authorities concerned give sufficient assurance on maintaining confidentiality, especially where industrial policy considerations may come into play in local review); and
  3. talking to less-central authorities early on to ensure that they have enough information to consider that they could reasonably defer to others.

If possible, the parties should include a review clause in any undertakings given, so that they can be adjusted to other authorities' demands. For example, in the (old) Shell/Montecatini case, the EU required divestiture of one holding in a joint venture to protect one technology, while the US required divestiture of the other linked to a rival technology. Fortunately, the parties were able to go back to the EU for review and revise their EU undertaking in light of the US one.108 This need for flexibility was recently illustrated by the Bayer/Monsanto case, where Bayer had to request the EC's approval of two modifications to its prior commitments, which had already been approved by the EC to 'address competition concerns arising in other jurisdictions'.109

As illustrated in some of the case studies in Section II, the Chinese process often takes longer than others. As such, early contact with the SAMR is advisable.110

Parties and their advisers also need to determine whether the recent scepticism regarding behavioural, and even structural, remedies becomes more established in practice.

Finally, as is so often the case in international situations, the parties and the authorities concerned need to be resourceful and flexible to work out practical solutions. Often, even in complex cases, such solutions are achievable, with willingness, creativity, hard work and some patience.