February 27, 2019
Antitrust: What Would a Hard Brexit Mean for EU/UK Merger Review?
The US government just put us all through a shutdown lasting more than a month – and that’s prompted their colleagues in the UK to respond with something along the lines of “hold my beer.” Incredibly, Her Majesty’s Government is merely a few weeks of further dithering away from the once unthinkable reality of a hard Brexit. That’s not good news for any business with interests in the UK or the EU, but this Baker Botts memo explains that it’s particularly bad news if you’ve got an M&A deal subject to antitrust review. Here’s an excerpt:
When it comes to transactions which involve a significant UK aspect (even where the merging parties themselves are not UK-based companies), the parties will need to take Brexit-related developments into account for transaction planning purposes. In concrete terms, not only will the merging parties need to be prepared to accommodate parallel EU and UK merger reviews in their transaction timelines, but they will also need to provide sufficiently for the possibility of parallel EU/UK merger reviews in the conditions precedent in their deal agreements.
The risk of potential issues arising from parallel reviews by the EU and UK will be particularly acute around the time of Exit Day: the UK’s Competition Management Authority effectively confirmed in its Draft Guidance that it fully intends to enforce UK competition law as of Exit Day in respect of mergers which otherwise would be subject only to review by the European Commission under the EUMR.
The UK’s CMA is apparently taking the position that any deal that hasn’t received a formal clearance decision from European Commission by the time the UK leaves the EU will be fair game for review by the CMA.
– John Jenkins