1. GCLC Lunch Talk Merger Control
Substantive merger control: is the bar higher than it used to be and to what extent?
John Davies, 16 September 2016

2. Is the bar higher? A view from the Madou trenches
What are the new (ish) factors?
Already consolidated markets getting more consolidated
(more 4 to 3, 3 to 2, and No1 + No2 deals: Ball/Rexam; ABI/SAB)
Most phase 2 cases since 2007
New(ish) Commission lexicon
“close” competitors, not “closest”
“role of (lack) of dominance”
Elimination of an “important competitive force” (potentially relevant to all oligopoly markets?)

3. Is the bar higher?
Incidence of large-scale document review and its implications
Length of process (increase in “stop the clock” cases) Zimmer/Biomet has it all!
Resource and cost explosion
Approach to remedies
Focus on viability rather than proportionality
Growth of “up-front purchaser” and detailed purchaser requirements
Focus on innovation concerns
Growing of intensive international cooperation in complex cases (need for timing coordination) (Halliburton/Baker Hughes – US impact on EC thinking?)

4. Is the bar higher?
In practice, all these factors contribute to make life harder… whether or not the “bar” is higher.

5. What does this mean for the parties?
Expect a bruising, lengthy and costly process
Do a realistic, thorough antitrust appraisal (“can we see the documents please?”) Look for clear and robust evidence. Be realistic on efficiencies
Take great care over risk apportionment in transaction documents (remedy, strategy, divestment thresholds, growth of huge reverse break fees)
Don’t believe your customers
Have a thorough communication strategy closely linked to the antitrust team (beware the risk of political headwinds in some cases)

6. What does this mean for the parties?
It’s never too early to plan remedies (and thoroughly)
If Phase 1 clearance is important, don’t just “play at it” (Holcim/Lafarge, ABI/SABM)
Understand what “negotiation” means in a regulatory context – its not like a commercial negotiator
Don’t lose focus on why you are doing the deal (“nice to haves” may scupper the deal)

7. Thank you