Antitrust Law Daily Wrap Up, STRATEGIC PERSPECTIVE: Allocating antitrust risk in merger agreements, (Nov 11, 2013)

With antitrust and competition laws regulating business transactions in more than 100 countries, parties to proposed mergers and acquisitions must seriously consider the antitrust ramifications of their deals around the globe. Not only must they perform antitrust analysis under many competition laws, they must exercise care when negotiating and drafting agreement provisions designed to allocate and shift antitrust risks.

In this article, Steven I. Glover, Adam J. Di Vincenzo, and Aarthy S. Thamodaran of Gibson Dunn & Crutcher LLP examine how parties to proposed mergers and acquisitions should assess antitrust risks and address them through a number of antitrust-related provisions in their agreements.

These provisions set out the responsibility to file with antitrust regulators in applicable jurisdictions; address the parties’ response to information requests by antitrust regulators; discuss the extent to which the buyer will agree to remedies required by competition regulators; outline how the parties will respond to an enforcement proceeding or litigation challenging the transaction; specify that regulatory approvals be obtained; prescribe the conditions under which the deal may not close; contain “drop dead” or termination dates; furnish termination rights of the parties; and require the payment of a “reverse termination fee” if a transaction does not close for antitrust reasons.

This article (“Allocating Antitrust Risk in Merger Agreements”) originally was published in the October 2013 issue of INSIGHTS: The Corporate and Securities Law Advisor, a monthly journal from Wolters Kluwer Law and Business.

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