Sharp climb in governments across globe regulating mergers, acquisitions

A record 115 countries and government entities across the globe are regulating mergers and acquisitions, a 69% spike from the 68 jurisdictions that monitored mergers five years ago, according to a new White & Case survey.

The 115 jurisdictions that currently police mergers include 110 countries plus regional regimes such as the European Union’s European Commission (E.C.) and some sub-national governmental entities, said J. Mark Gidley, a partner in the Washington office of White & Case who chairs the firm’s global antitrust/competition practice. The firm’s Worldwide Merger Notification Requirements survey, which tracks 217 separate jurisdictions, was published by Wolters Kluwer subsidiary Aspen Publishers Inc.

The sheer growth in the number of jurisdictions scrutinizing mergers is “staggering,” considering that only 46 jurisdictions monitored M&A in 1999, Gidley said.

“We have witnessed an explosion in merger regulation across the globe over the past 15 years,” said Gidley.  “This mega-trend has been fueled by globalization, the rise of the so-called BRIC countries, outreach efforts by US and EU enforcement officials, and a desire by more and more governments to adopt antitrust laws as a means of regulating commerce.”

We saw this in the BHP/Rio Tinto deal earlier this year where six national antitrust enforcement agencies were involved.   Although the deal died, Posse List members worked the deal in Canberra, Brussels, D.C. and London.   This trend also explains, for instance, why we’ve seen the growth of document reviews and contract attorney work across Europe not only in the competition/antitrust area but in other types of government investigations.  It also helps explains why “International and Comparative Competition Law” and “International Merger Control” are emphasized modules in many LLM programs.

“The growth and modernization of merger control regimes continues to place pressure on global corporations and their antitrust advisors,” noted George L. Paul, a White & Case partner and co-editor of the survey. “China and India are two notable additions to the roster of active jurisdictions that will have a major impact on many international transactions, and the enlargement of the European Union shows that even the established competition regimes remain dynamic.”

That trend looks like it’s only going to intensify.  China, for example, passed a law authorizing merger review last year, and India undertook a wholesale revision of its regime in 2007.   And while they are still dominant, merger regulatory power is shifting away from Washington and the E.C.’s center in Brussels, which may ultimately have more impact on M&A attorneys than the sheer number of players.   Merger agencies launched in the late 1990s and the early years of this decade are getting to the point where they have enough experience to feel comfortable blocking deals.