Practical Insights for deal teams
More deals in-scope
as a result of governments and regulators putting in place a broader range of tools to screen M&A transactions. As geopolitical uncertainty continues, we expect this trend to continue.
Fragmentation, complexity and divergence
are being driven by changing policy considerations (e.g. national security, economic resilience). This can lead to significant differences in process, approach and the issues that are regulators are concerned about.
Clearance is achievable for most deals
with the majority cleared without remedies and few prohibitions. Where concerns arise, remedies are a common route to clearance, even for FDI (where intervention is more frequent). In merger control, regulators are showing more flexibility in the types of remedies they will accept.
More deals in-scope
as a result of governments and regulators putting in place a broader range of tools to screen M&A transactions. As geopolitical uncertainty continues, we expect this trend to continue.
Fragmentation, complexity and divergence
are being driven by changing policy considerations (e.g. national security, economic resilience). This can lead to significant differences in process, approach and the issues that are regulators are concerned about.
Clearance is achievable for most deals
with the majority cleared without remedies and few prohibitions. Where concerns arise, remedies are a common route to clearance, even for FDI (where intervention is more frequent). In merger control, regulators are showing more flexibility in the types of remedies they will accept.
Preparation is key to success
With broader regimes, wider policy considerations and more regulators involved, early and proactive preparation is essential to manage issues effectively. Ensuring consistency of messaging across regulators is key.
Preparation is key to success
With broader regimes, wider policy considerations and more regulators involved, early and proactive preparation is essential to manage issues effectively. Ensuring consistency of messaging across regulators is key.
What this means for deal planning?
What this means for deal planning?
Regulatory planning starts earlier
It is key to consider merger control, FDI and other regimes at the very outset of deals so that structure, timing, pricing and risk allocation can be shaped upfront.
Regulation is impacting deal timing
Regulatory scrutiny is extending long-stop dates for some deals (in some cases for up to 12–18 months), while unproblematic transactions benefit from faster merger control timelines.
Focus on risk-sharing provisions
As US agencies accept remedies again, ‘hell or high water’ clauses (commitments to do everything necessary to obtain regulatory approvals) are back in focus and are now negotiated more commonly than break fees.
Managing the gap period
With more deals subject to regulatory review, gap controls are increasingly negotiated, particularly for deals with extended gap periods. These include termination rights, material adverse change clauses and claims for breaches of warranties or gap covenants.
Regulatory planning starts earlier
It is key to consider merger control, FDI and other regimes at the very outset of deals so that structure, timing, pricing and risk allocation can be shaped upfront.
Regulation is impacting deal timing
Regulatory scrutiny is extending long-stop dates for some deals (in some cases for up to 12–18 months), while unproblematic transactions benefit from faster merger control timelines.
Focus on risk-sharing provisions
As US agencies accept remedies again, ‘hell or high water’ clauses (commitments to do everything necessary to obtain regulatory approvals) are back in focus and are now negotiated more commonly than break fees.
Managing the gap period
With more deals subject to regulatory review, gap controls are increasingly negotiated, particularly for deals with extended gap periods. These include termination rights, material adverse change clauses and claims for breaches of warranties or gap covenants.
Explore the trends shaping deal-making
Explore the trends shaping deal-making
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