Navigating Merger Clearance During the Crisis

The impacts vary by jurisdiction and include temporary closures, slower processing times, changes to mandatory deadlines, and requests to delay merger filings. [...]key factors that affect merger clearance for large deals—anticompetitive concerns, national security issues, and geopolitical considera...

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Bibliographic Details
Published inBCG Insights
Main Authors Keienburg, Georg, Kengelbach, Jens, Neumann, Leif, Kim, Thomas
Format Web Resource
LanguageEnglish
Published Boston Boston Consulting Group Boston, MA 13.05.2020
Subjects
Competition
Coronaviruses
COVID-19
Divestments
Economics
Electronic filing
Foreign investment
Joint ventures
Medical supplies
National security
Regulatory approval
Value creation
United States > US
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Summary:The impacts vary by jurisdiction and include temporary closures, slower processing times, changes to mandatory deadlines, and requests to delay merger filings. [...]key factors that affect merger clearance for large deals—anticompetitive concerns, national security issues, and geopolitical considerations—have become more important. [...]European Union (EU) regulators have encouraged dealmakers to postpone filings, when possible. Cross-border deals may see heightened scrutiny as the crisis reinforces the recent trend of countries introducing or expanding the use of so-called foreign investment approvals to protect businesses deemed to be of national interest. To compensate for higher regulatory risk, a buyer may need to bid at a premium price to acquire the target. Because the COVID-19 crisis may impact how regulators assess deals, it adds another element of potential regulatory risk for the parties to consider.