DECHERT'S DAMITT 2021 Report: Merger Investigation Activity Sinks More Deals

LONDON, Feb. 2, 2022 /PRNewswire/ -- Dechert LLP has published the quarterly results of its Dechert Antitrust Merger Investigation Timing Tracker (DAMITT), a study conducted by Dechert's antitrust/competition practice that reports on trends in significant merger control investigations in the United States (U.S.) and European Union (EU).

Key results, per geography, include:

United States:

• Over 37% of significant investigations resulted in a complaint or an abandoned transaction, the highest since DAMITT launched in 2011.
• Increased FTC and DOJ scepticism of merger remedies.
• The average duration in 2021 remained around 12 months, matching 2020.
• Dechert expects to see a substantial uptick in significant U.S. merger investigations concluding in 2022.

European Union:

• The European Commission concluded only 14 significant merger investigations in 2021, the fewest observed over the past 10 years.
• 21% of these significant investigations resulted in the transaction being withdrawn or blocked, the highest ratio since DAMITT launched in 2011.
• The average duration of Phase II investigations soared 29 percent, reaching a new 19.2-month record since DAMITT started tracking.
• Increased duration from longer pre-filing discussions and a notable increase in the average formal review period of Phase II investigations.
• The European Commission is using its stop-the-clock powers more frequently.

The Report found that parties to transactions subject to significant merger investigations are more likely today than at any time over the last decade to see their deal blocked or to be pushed to abandon their transactions.

To ensure the ability to defend their deals through a potential investigation, Dechert's Report recommends that parties to the average "significant" deal in the U.S. should plan on at least 12 months for the agencies to investigate their transaction and may want to add on additional time to address the continuing uncertainty at the agencies.

On the EU side, parties to transactions likely to proceed to Phase II investigations should allow for at least 18 months from announcement to clearance under the current circumstances and should not rely on the theoretical deadlines provided for in the EU Merger Regulation, even after the deal has been formally notified. If the investigation is likely to be resolved in Phase I with remedies, parties should plan on around ten months from announcement to a decision.

For the full Report please click here and for the EU supplement, click here.

In the U.S., "significant" merger investigations include Hart-Scott-Rodino (HSR) Act reportable transactions for which the result of the investigation by the Federal Trade Commission (FTC) or the Antitrust Division of the Department of Justice (DOJ) is a consent order, a complaint challenging the transaction, an official closing statement by the reviewing antitrust agency, or the abandonment of the transaction with the antitrust agency issuing a press release.

In light of the procedural differences between the EU and U.S., DAMITT defines "significant" EU merger investigations to include transactions subject to the EU Merger Regulation (EUMR) and resulting in either a Phase I remedy or the initiation of a Phase II investigation.

DAMITT calculates the durations of significant investigations in both jurisdictions from the deal announcement date through the completion of the investigation, and therefore includes the time attributable to pre-notification consultation efforts.

About Dechert

Dechert is a leading global law firm with 22 offices around the world. The firm advises on matters and transactions of the greatest complexity, bringing energy, creativity and efficient management of legal issues to deliver commercial and practical advice for clients.

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