In our last post, we left off discussing the merger review process at the point where the reviewing agency—either the Department of Justice or the Federal Trade Commission—obtains the ability to request non-public information about the businesses proposing the merger. The reviewing agency uses that ability to gather all the information necessary to determine the likely effect of the merger on the market, and specifically on competition.
After conducting a preliminary review of a premerger filing, the agency will do one of several things: grant early termination to the waiting period before the merger can proceed; wait until the waiting period expires; or ask for additional information. The businesses proposing the merger are allowed to go forward with the deal once the waiting period is terminated, but if there is a request for additional information, they must comply with the ongoing investigation.
Compliance with a request for additional information must meet the standard of “substantial compliance.” Because the agency determines whether businesses are in substantial compliance with second requests, disputes can arise on this point. Once the agency determines that there is substantial compliance with a second request, though, there is another short waiting period during which the agency is allowed to take any additional action that needs to be taken. Once this waiting period is completed, the agency would be free to move forward with the proposed deal.
The reviewing agency may also challenge the proposed agreement, though, prior to the end of this final waiting period. A challenge can take a couple different forms, and it is important for businesses to understand how to navigate a challenge so that the deal may move forward. We’ll speak about this issue in our next post.