Representing Parties in Mergers Subject to Multijurisdictional Review

• Pages: 57-94

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CHAPTER II

REPRESENTING PARTIES IN MERGERS SUBJECT

TO MULTIJURISDICTIONAL REVIEW

As the global economy has become increasingly integrated and

interdependent, many nations have adopted premerger antitrust review

procedures that are comparable to the U.S. Hart-Scott-Rodino (HSR

process. Nearly one hundred jurisdictions around the world have now

enacted merger review laws and merger notification regimes in one form

or another. Many of these competition authorities actively enforce the

filing requirements, imposing significant fines and other penalties for

failure to file.199 The growth of merger control regimes around the world

has increased the risk of procedural and substantive conflict between

merger control regimes,200 as well as prompting various efforts to

promote international convergence.201

199. Kaethe Carl, Merger Control: Signs of Increasing International Penalties

for Noncompliance, IX THETHRESHO LD, Summer 2009, at 85.

200. As explained by former Federal Trade Commission Chairman Timothy

Muris, multijurisdictional review raises the possibility that the fate of the

transaction will be decided by the most restrictive review regime. See

Timothy J. Muris, Chairman, Fed. Trade Comm’n Merger Enforcement

in a World of Multiple Arbiters, Remarks Before the Brookings

Institution Roundtable on Trade and Investment Policy (Dec. 21, 2001),

available at http://www.ftc.gov/speeches/muris/brookings. See also

Rachel Brandenburger, Calvin S. Goldman, Ilene Knable Gotts,

International Merger Reviews,reprinted in ABA SECTION OF ANTITRUST

LAW,ISSUES IN COMPETITION LAW AND POLICY Vol. III, Ch. 70 (2008).

201. To this end, the International Competition Network (ICN) was

established to facilitate procedural and substantive convergence in

international antitrust enforcement. The ICN is a “virtual” organization

composed of over one hundred governmental entities. See ICN,

http://www.internationalcompetitionnetwork.org. Notably, the Merger

Review Working Group has developed ICN-recommended practices and

procedures relating to confidentiality and interagency coordination of

merger reviews. ICN, Recommended Practices for Merger Notification

Procedures, Practices IX-X (ICN Recommended Practices), available at

http://www.internationalcompetitionnetwork.org/uploads/library/doc588.

pdf; see also ICN, Notification & Procedures Subgroup Dra ft Self

Assessment Tool: Evaluating Merger Notification Provisions for

58 The Merger Review Process

As a result, merging parties frequently must interface with

competition authorities from other nations in addition to the Federal

Trade Commission (FTC) or the U.S. Department of Justice (DOJ or

Antitrust Division). Where there are issues in common, the non-U.S.

agencies involved may seek to coordinate with the U.S. agency

reviewing the transaction, or vice versa. In transactions subject to review

in multiple jurisdictions, merging parties need to develop and implement

a detailed plan and timetable for making the requisite filings and

obtaining the necessary approvals.

Most mergers subject to multiple review receive compatible

enforcement decisions. There have been a few notable exceptions,

however, such as the G.E./Honeywell transaction, which was blocked by

the European Union (European Union or EU), although cleared with

remedies by the Antitrust Division.202 The EU is not alone, however, in

Conformity with ICN-Recommended Practices for Merger Notification &

Review Procedures,available at http://internationalcompetition

network.org/uploads/templates/merger/self%20assessment%20tool.pdf.

See also Maria Coppola & Cynthia Lagdameo, Taking Stock and Taking

Root: A Closer Look at Implementation of the ICN Recommended

Practices for Merger Notification & Review Procedures,reprinted in

THE INTERNATIONAL COMPETITION NETWORK ATTEN 297 (Paul Lugard

ed., 2011).

202. On May 2, 2001, the Antitrust Division cleared the merger subject to

certain divestitures. See Press Release, U.S. Dep’t of Justice, Justice

Department Requires Divestitures in Merger Between General Electric

and Honeywell (May 2, 2001), available at http://www.justice.gov/atr/

public/press_releases/2001/8140.pdf (requiring divestitures in helicopter

engine business and authorization of new service providers for engines

and auxiliary power units). Two months later, the EU determined that the

merger of GE and Honeywell was incompatible with the common market

and blocked the transaction. See Case COMP/M.2220—General

Electric/Honeywell, Commission Decision C(2001) 1746 (July 3, 2001),

available at http://ec.europa.eu/competition/mergers/cases/decisions/

m2220_20010703_610_en.pdf (explaining that the transaction would

yield dominant positions in the markets for the supply of avionics and

non-avionics equipment, and would create or strengthen a dominant

position in the market for jet engines and other concerns; the Commission

further held that GE’s proposed remedies were insufficient to correct the

competitive problems arising from the transaction). On December 14,

2005, the European Court of First Instance upheld the Commission’s

decision, denying GE and Honeywell’s applications for annulment of the

Representing Parties in Mergers Subject to Multijurisdictional Review 59

challenging multinational deals.203 Many jurisdictions have either

recently revised or are revising their merger guidelines to take account of

increased experience, developments in economic analysis, and the desire

for international convergence.204

merger prohibition. Case T-209/01, Honeywell Int’l v. Comm’n of the

European Communities, 2005 E.C.R. II-5527; Case T-210/01, General

Electric Corporation v. Comm’n of the European Communities, [2005]

E.C.R. II-5575. Analysis of the rationale for these opposite results and the

resulting cause for concern throughout the business world is plentiful.

See, e.g., William Kolasky, Deputy Ass’t Att’y Gen., U.S. Dep’t of

Justice, Antitrust Div., Conglomerate Mergers and Range Effects: It’s a

Long Way from Chicago to Brussels, Remarks Before the George Mason

University Symposium (Nov. 9, 2001) (Kolasky Symposium Speech),

available at http://www.usdoj.gov/atr/public/speeches/9536.pdf.

203. For example, in 2009, China’s Ministry of Commerce rejected Coca-Cola

Co.’s $2.4 billion bid to buy Huiyuan Juice Group, China’s largest maker

of fruit juice. Coke’s China Juice Move Collapses, BBC NEWS, Mar. 18,

2009, available at http://news.bbc.co.uk/2/hi/business/7949903.stm.

204. Recent merger guideline revisions include Australia (AUSTRALIAN

COMPETITION &CONSUMER COMMISSION MERGER GUIDELINES (2008)

(Austl. Competition & Consumer Comm’n), available at

http://www.accc.gov.au/content/index.phtml/itemId/809866 (revising

merger review guidelines originally published in 1999)); Canada

(CANADA COMPETITION BUREAU,MERGER ENFORCEMENT GUIDELINES)

(2011), available at http://www.competitionbureau.gc.ca/

eic/site/cb-bc.nsf/eng/03420.html); the EU (EUROPEAN COMMISSION,

GUIDELINES ON THE ASSESSMENT OF NON-HORIZONTAL MERGERS UNDER

THE COUNCIL REGULATION ON THE CONTROL OF CONCENTRATIONS

BETWEEN UNDERTAKINGS, 2008 O.J. (C 265) 6-25, available at http://ec.

europa.eu/competition/mergers/legislation/notices_on_substance.html;

EUROPEAN COMMISSION,GUIDELINES ON THE ASSESSMENT OF HORIZONTAL

MERGERS UNDER THE COUNCIL REGULATION ON THE CONTROL OF

CONCENTRATIONS BETWEEN UNDERTAKINGS, 2004 O.J. (C 31) 5-18,

available at http://europa.eu/legislation_summaries/competition/firms/

126107_en.htm); Germany (FEDERAL CARTEL OFFICE,DRAFT GUIDANCE

ON SUBSTANTIVE MERGER CONTROL (2011) available at http://www.

bundeskartellamt.de/wDeutsch/download/pdf/Publikationen/Guidance_20

110721.pdf) (currently under review)); the United Kingdom (UK

COMPETITION COMM’N&OFFICE FAIR TRADING,MERGER ASSESSMENT

GUIDELINES (2010), available at http://www.oft.gov.uk/shared_oft/

mergers/642749/OFT1254.pdf (outlining the Office of Fair Trading and