© Hogan & Hartson LLP. All rights reserved. Transatlantic merger enforcement Catriona Hatton November 28, 2007 Brussels

© Hogan & Hartson LLP. All rights reserved. EU-US Mergers: which transactions are caught? EU: – acquisitions of control (includes acquisitions of minority stakes where they are accompanied by rights giving effective control on strategic decisions) – turnover thresholds US: – 'size of transaction test' (value of the assets, voting shares, or partnership interests to be held following the acquisition) – 'size of the parties' test (assets and turnover of parties relevant for deals below certain value). – at least one party engaged in interstate or foreign commerce US agencies can review mergers below thresholds and reexamine mergers previously cleared

© Hogan & Hartson LLP. All rights reserved. EU US - which 'Agency'? Who reviews? – US: DOJ or FTC? No bright line test for who reviews. You may get a 'clearance battle‘ – Potential review by state attorneys general – EU: European Commission (possibility of referral to national authority) Who clears? – US: DOJ or FTC – EU: European Commission (even when European Courts overturn decision, back to Commission - Sony BMG) Who clears subject to remedies? – US: DOJ/FTC consent decrees:- may have criminal and civil penalties for violation - DOJ consent decrees approved by court – EU: European Commission Who blocks? – US: DOJ/FTC cannot block- must seek injunction by federal court – EU: European Commission (if European courts overturn, back to Commission - Schneider Legrand)

© Hogan & Hartson LLP. All rights reserved. EU US Timing Considerations Up front time before filing generally longer EU: Nature of the Submission: US HSR Form (provides only minimal information) vs EU Form CO (latter requires extensive competitive analysis). Pre filing drafts and discussions with European Commission - in practice mandatory Formal Review Period after Filing: Non complex cases: US 30 calendar day waiting period or early termination vs. EU 25 working days Complex cases: US 30 calendar days + second request (time frame not determined, depends on compliance with second request - typically 3-6 months ) + further days EU 25 working days +10 working days+90 working days+15 working days (if remedies offered late) + 'optional' 20 working days. Total max: 160 working days (stop the clock option)

© Hogan & Hartson LLP. All rights reserved. Differences in substantive analysis? US Test: will the deal lead to a substantial lessening in competition? EU Test: will the deal lead to a significant impediment to effective competition, in particular as a result of the creation or strengthening of a dominant position? However, despite broad convergence, differences remain. For example: – EU more conservative approach to vertical mergers – EU tying/bundling theories – EU concern with competitors complaints – US Government - change in the Administration can influence enforcement policies

© Hogan & Hartson LLP. All rights reserved. Approach to Remedies EU and US preference for structural (divestment) remedies Sufficient assets to ensure viability of divested business, sold to a buyer that will operate those assets to provide competition equivalent to that being lost as a result of the acquisition Upfront buyer/fix-it-first requirements Limited scope for behavioural remedies.

© Hogan & Hartson LLP. All rights reserved. EU US Remedies - Timing issues EU Time Squeeze EU market testing of remedies (US no market testing) US more flexibility

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