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Making the merger review process more efficient, P.1

One of the hurdles business must deal with in moving forward with a merger agreement is the merger review process. We have previously spoken about this process and some of the difficulties businesses can face in complying with the requests of the investigating agency. One of the issues we have not discussed is the burden of complying with data requests in general.

In the merger review process, the ability of the investigating agency—either the Department of Justice or the Federal Trade Commission—to approve a merger depends on the ability of the businesses proposing the merger to provide accurate, relevant and complete information. Doing so can be not only time-consuming, but also costly. Business, therefore, need to do everything they can to make the process as efficient as possible.  

Early interaction with the investigating agency is one thing businesses can do to make the investigation process more efficient and less burdensome. The goal of meeting early on in the process—meaning, generally, before a second request for information— is to determine what information is available from the businesses, how suitable that information is for the agency’s investigative purposes, and what form the data should be delivered in to ensure the businesses don’t do more work than they have must. To be as effective as possible, early interaction should involve business representatives who are highly knowledgeable about information pertaining to the investigation, including its markets, how the merger will impact economics and market share, and how the business maintains its data.

In addition to early interaction, businesses can increase the efficiency of the investigation by maintaining frequent, productive communication with the investigating agency. This is particularly important given the fact that the needs of investigators may change throughout the process, depending on what they find in the initial stages.

We’ll continue looking at this issue in our next post.

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