Transactions above statutory thresholds must be notified to competition authorities and may not close until the waiting period expires.
Thresholds are based on transaction value and the parties’ size, adjusted annually. They capture asset and equity acquisitions, and certain non-corporate interests, and can catch transactions the parties do not regard as mergers, including some minority investments and executive compensation arrangements.
The waiting period runs from filing, with early termination sometimes available. A second request extends the review substantially and is the principal cost driver in contested deals.
Failure to file carries daily civil penalties and can result in an order requiring divestiture. Investors who acquire shares intending passive investment must fit within the applicable exemption, which is narrower than commonly assumed.
Gun jumping. Before closing, the parties must continue to operate independently. Coordinating prices, allocating customers, integrating operations or giving the buyer control over the target’s ordinary course decisions can constitute an antitrust violation and an unlawful pre-closing transfer of beneficial ownership.
Clean teams with defined protocols allow limited sharing of competitively sensitive information for integration planning without exposing operating personnel.
Interim covenants in the purchase agreement must be drafted to protect value without conferring control.