Applying Domestic Law to International Markets
Chapter 4: Merger review procedure
Merger law will be most effective at deterring and preventing anti-competitive mergers where appropriate procedural mechanisms are in place to detect, prevent or unravel mergers which contravene the substantive laws. Procedural regulation of mergers should therefore aim to facilitate the identification and prevention of mergers which might contravene substantive law while keeping to a minimum the cost to parties and regulators. The public nature of mergers facilitates the use of pre-merger notification (PMN) processes and these have been adopted in most jurisdictions which have enacted substantive merger laws. In addition, the extraterritorial reach of merger laws in most jurisdictions means that regardless of where the merger takes place, the location of the merging parties, or likely competitive impact, the procedural requirements of all jurisdictions potentially affected by the transaction need to be considered by firms proposing to merge. As a result, the divergence in administrative structures and procedures surrounding PMN obligations is more acute than the variations in substantive legal obligations. This divergence has been magnified by the introduction of several relatively new but strategically important merger regimes, particularly in the BRIC countries, which all now adopt mandatory and suspensory PMN regimes. The increasing size, complexity and geographic reach of mergers in the last decade, combined with the expense and complexity of procedural obligations, have generated persistent calls for the reform of merger notification procedures.
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