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What generally happens in the merger review process?

On Behalf of | Oct 8, 2015 | Business Organizations |

A lot needs to happen when two companies decide to work out a business merger or acquisition. Not only does the a company have to ensure the support of shareholders and get the financial and logistical aspects of such a deal worked out, there are also legal issues that have to be addressed. One specific legal process that has to be engaged is the merger review process.

Merger review, which is overseen by the Federal Bureau of Competition, aims to ensure that large companies are not going to threaten competition and gain a monopoly on their market as a result of coming together. In determining the potential threat to competition, the Bureau looks at market dynamics and, if necessary, takes steps to prevent a merger from occurring.

The Merger Review Process involves multiple phases, beginning with filing a notice of the proposed deal. Usually, only companies which have a minimum value and which meet a minimum size must file. The purpose is to provide information about the industry and the businesses. After an antitrust agency is assigned to the review—either the Federal Trade Commission or the Department of Justice—and the agency examines non-public information pertaining to the companies.

Companies under agency scrutiny must go through a waiting period during which the proposal is examined. If the waiting period ends without any objections having been made, companies are free to go forward with the merger, but the reviewing agency may also request additional information or move to halt the transaction where going forward would present major problems with market competition.

When the merger process runs into problems, it is important for companies to know their options and have an advocate to guide them through the process. Working with an experienced business law attorney can help ensure that the merger review process goes as smoothly as possible and that any challenges are effectively addressed.