Worldwide: Antitrust Hotspots In Cross Border Transactions

With global merger activity and enforcement on the rise, the current regulatory environment presents complex challenges to transacting parties. In this client alert, we summarize recent developments in jurisdictions that may affect your next deal.


Recent reforms to remove the mandatory pre-notification consultation process, coupled with the new simplified filing procedure, signal that China's Ministry of Commerce ("MOFCOM") is focused on improving the efficiency of its merger review process. Since China's Anti-Monopoly Law took effect in August 2008, MOFCOM's Anti-Monopoly Bureau has reviewed over 1,100 transactions (almost 250 cases in 2014 alone), has cleared the vast majority of these transactions without any conditions, and has intervened in a small number of deals:

  • Requiring remedies in only 24 deals
  • Blocking only 2 deals

However, MOFCOM's review process has been criticized for being unduly long, burdensome and inefficient. As an example, MOFCOM approved Glencore International's acquisition of Xstrata with conditions in late April 2013, more than a year after the parties notified the deal to MOFCOM, nine months after the deal received antitrust clearance from regulators in the U.S. and Australia, and five months after the European Commission approved the deal subject to conditions.

Elimination of Mandatory Pre-Notification Consultation Process: On September 15, 2015, in an effort to shorten the duration of merger reviews, MOFCOM eliminated its Consultation Division, along with its formal pre-notification consultation period. The Consultation Division had been responsible for reviewing notifications for completeness prior to MOFCOM's official acceptance of a case. The pre-notification review created two significant inefficiencies that extended the merger review process. First, there was no statutory time limit for this stage. The back-and-forth consultation between the parties and MOFCOM could take two months or more. Second, once MOFCOM accepted a filing, the case would pass from the Consultation Division to a different review team, who had had no prior involvement in the case.

New Case Review Teams: In place of the Consultation Division, MOFCOM has created three case teams who will review transactions from filing through the end of the review period. Like the U.S. merger review process, each case team will focus on specific industries, enabling the staff to gain industry expertise.

Simplified Review Process for Non-Complex Deals: The simplified procedure, announced in February 2014, sets forth a streamlined review process for transactions that are unlikely to raise competitive concerns. Most notified cases should fall into this category. The agency's stated goal is to clear simple cases during Phase I review, i.e., within 30 days. This would be a substantial improvement, as MOFCOM's data shows that only a minority of merger cases are completed during the initial 30-day Phase I review and it is not uncommon for MOFCOM to extend Phase II review (already 90 days) of foreign deals by an additional 60 days—meaning that even uncomplicated deals can take up to six months from filing to clearance.

Transactions Qualifying for Simplified Procedure:

  • Off-shore joint ventures with no activities in China;
  • Changes from joint to sole control of a joint venture (except where sole parent and JV compete in same market); or
  • Transactions where the parties:
    • Have a combined market share of less than 15%; and
    • Each has market shares of less than 25% if they are active in any vertically related or neighboring markets.

Bottom Line: These procedural changes are welcome, but MOFCOM's Anti-Monopoly Bureau continues to be severely understaffed—it has only 30 officials, 15 of which are engaged in case review. Even with pre-notification consultation out of the picture, it still can take four to six weeks for MOFCOM to formally accept a merger filing. While parties may see some benefits from these procedural reforms, they may not see a significant reduction in the review timeline anytime soon.


As the European Competition Commissioner, Margrethe Vestager observed, there has been an "M&A boom" since November 2014.1 As of September 30, 2015, 247 mergers have been notified to the Commission in 2015 and an additional 18 cases from the member states have been referred to the Commission by the notifying parties or a national competition authority.

The chart on the following page summarizes EC merger activity over the past four years:2

Some notable trends:

  • In 2014 and 2015, approximately 70% of the cases handled in Phase I have been subject to the simplified notification procedure, in which parties submit a reduced notification because the transaction is unlikely to raise competition concerns.
  • More cases have been subject to extended Phase II reviews:
    • Eight cases in 2014 (about 2.6% of notified cases in 2014) and nine cases in 2015 (as of September 30, 2015) (about 3.6% of notified cases in 2015).
  • In 2014, the Commission cleared 17 cases with remedies (about 5.6% of notified cases in 2014); 12 such cases during Phase I (about 4% of notified cases in 2014) and the other 5 cases during Phase II (about 1.7% of notified cases in 2014).
  • As of September 30, 2015, the Commission had requested commitments in 17 cases (about 6.9% of notified cases in 2015); ten such cases during Phase I (about 4% of notified cases in 2015) and the other seven cases during Phase II (about 2.8% of notified cases in 2015).
  • No mergers were prohibited during 2014 and 2015, and only ten cases were withdrawn by the merging parties during this timeframe.


Within the past two months, the U.S. Federal Trade Commission ("FTC") has brought three enforcement actions for violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and has imposed fines totaling almost $1 million. Each of these violations involved the acquisition of a minority interest in a business. Two of the cases involved the improper application of HSR exemptions and the third case involved a second inadvertent failure to notify.

Improper Use of Passive Investor Exemption: On August 24, 2015, the FTC announced it had reached a settlement with Third Point LLC and its three managed hedge funds (collectively, "Third Point"), for failure to file notification under the HSR Act for multiple acquisitions of Yahoo! voting stock in 2011. Third Point asserted it was a "passive investor"; therefore, its acquisitions were exempt from HSR reporting.

The "passive investor" exemption provides that a person may acquire up to 10% of the voting stock of a company without triggering an HSR reporting requirement, provided that the acquirer does not intend to influence the basic business decisions of the company or to participate in its management.

The FTC deems the following actions to be inconsistent with "passive investor" status:

  1. nominating a candidate to the board;
  2. proposing corporate action requiring shareholder approval;
  3. soliciting proxies;
  4. having a controlling shareholder, director, officer, or employee serving simultaneously as an officer or director of the target;
  5. being a competitor of the target; or
  6. doing any of the foregoing with respect to any entity that directly or indirectly controls the target.

The FTC alleged that Third Point could not claim "passive investor" status because of conduct that was inconsistent with the exemption, including:

  • Contacting individuals to gauge their interest in becoming the CEO or board member of Yahoo!;
  • Taking steps to assemble an alternate slate of board of directors;
  • Writing to Yahoo! to inform that Third Point was prepared to join the board;
  • Internally deliberating the possible launch of a proxy battle for directors of Yahoo!; and
  • Making public statements that Third Point was prepared to propose a slate of directors at Yahoo!'s next annual meeting.

The settlement imposes a five-year injunction on Third Point's use of the passive investor exemption. Consistent with its "one free pass" policy, the FTC declined to impose a monetary fine on the basis that the violation was inadvertent and short-lived and Third Point had not previously violated the Act.

Improper Use of Institutional Investor Exemption: On September 22, 2015, the FTC settled with Leucadia National Corporation ("Leucadia") for its failure to file HSR notification in connection with the conversion of its interest in Knight Capital Group (held by its subsidiary, Jeffries, LLC) into approximately 13.5% of the voting stock of KCG Holdings, Inc. ("KCG"), with a value of approximately $173 million. Leucadia relied on the "institutional investor" exemption, which states that acquisitions by institutional investors are exempt from HSR reporting if:

  • the acquisition is made in the ordinary course of business for the purpose of investment;
  • the acquirer will not hold more than 15% of the outstanding voting shares; and
  • the target is not an institutional investor of the "same type" as the buyer.

Leucadia asserted that Jeffries and KCG were not the same type of institutional investors, alleging that Jeffries was a "broker-dealer," whereas KCG was not. The FTC disagreed and imposed a fine of $240,000 on Leucadia for its failure to file in violation of the Act. In its press release, the FTC acknowledged that Leucadia had relied upon the advice of counsel, but imposed a fine because this was Leucadia's second HSR violation.

Second Violation for Failure to Notify Results in Fine: On October 6, 2015, the FTC reached a settlement with investor Len Blavatnick to pay $656,000 in penalties for failure to notify his acquisition of shares of TangoMe. In August 2014, Mr. Blavatnick, through his company, Access Industries, had purchased approximately 29.1% of the voting stock of TangoMe, valued at $228 million. Four months later, he submitted a corrective filing to notify the acquisition of TangoMe stock. In imposing the fine, the FTC noted that Blavatnick had failed to consult HSR counsel, notwithstanding his prior commitment after a previous HSR violation, to institute effective HSR compliance procedures.


Companies doing business in Brazil should be aware that Brazil's mandatory pre-merger control regime may require notification of exclusive distribution agreements and other non-merger transactions that do not trigger reporting obligations in the U.S., the EU or any other pre-merger control regimes.

In November 2014, Brazil's Council for Economic Defence ("CADE") issued new rules (effective January 5, 2015) clarifying that an "associative agreement" between parties that meet the turnover thresholds must be reported and approved under the Brazilian merger control law prior to implementation where:

  • The parties meet the requisite financial thresholds (one party having annual gross sales of 750 million reais or higher, and another having annual gross sales of 75 million reais or higher);
  • The agreement is for a period of more than two years; and
  • The parties are horizontally related and their combined share of the relevant market is at least 20 percent; or
  • The parties are vertically related, and one of the parties holds market share of at least 30 percent in the relevant market, and the agreement contains exclusivity obligations or profit-sharing clauses.

To date, CADE has reviewed very few associative agreements:

  • In at least five instances, CADE found that the notified transaction did not meet the criteria for merger control review.
  • Several notified associative agreements have been approved without conditions (e.g., a distribution agreement for pesticides, and an exclusive bottling, distribution, and marketing agreement for soft drinks). 

Recognizing that it is highly unusual to require notification of non-merger agreements prior to implementation, CADE has indicated that it is open to discussing its interpretation of "associative agreements" and to consult with practitioners to determine whether a filing is required.


1 Speech of March 12, 2015, published on the website of the European Commission –

2 Statistics on merger cases, published on the website of the European Commission –

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions