HARDER) The M&A - Fried Frank

IN THIS ISSUE:

Breaking Up Is Hard to Do (But Planningfor It Can Be Even Harder) 1

The M&A Lawyer Roundtable: TheInternational Antitrust Picture, 2017 5

Delaware Supreme Court, ReversingChancery Court, Interprets Post-ClosingPurchase Price Adjustment “True Up”Narrowly, Based on the Specific FactualContext—Chicago Bridge v.Westinghouse 10

Federal Judge Blocks Merger of NuclearWaste Disposal Companies Rejecting“Failing Firm” Defense 14

German Government Expands AuthorityOver Takeovers by Investors fromOutside the EU 16

From the Editor 18

BREAKING UP IS HARD

TO DO (BUT PLANNING

FOR IT CAN BE EVEN

HARDER)

By Peter D. Lyons, Mary Lehner, Jennifer

Mellott, and Elise Nelson

Peter Lyons is an M&A partner with Freshfields

Bruckhaus Deringer US LLP in New York. Mary

Lehner is a partner, Jennifer Mellott is a senior

associate, and Elise Nelson is an associate in

Freshfields’Antitrust, Competition, and Trade

practice in Washington, DC.

Contacts: [email protected] or

[email protected].

The past 15 years have seen an explosion in the

number of jurisdictions requiring pre-merger

antitrust notification and an increase in the aggres-

siveness of many of those antitrust regulators in

challenging transactions. In particular, the U.S.

Department of Justice and Federal Trade Commis-

sion and the European Commission have become

more aggressive in requiring remedies to approve

transactions and other jurisdictions, including

Brazil, China, and India, have also required

remedies. At the same time the multi-jurisdictional

nature of business has resulted in more transac-

tions involving merger notifications in multiple

jurisdictions, causing burdens and delays that

frustrate parties eager to get to closing. In most

cases these delays are merely annoying, but in

transactions that raise substantive antitrust con-

cerns, dealing with multiple regulators with differ-

ent levels of sophistication, methods, and legal

standards can make it difficult to predict the likely

outcome.

With this risk in mind, parties to transactions

that pose antitrust risk are paying close attention

to the way that antitrust risk is allocated in trans-

action agreements. Where the parties expect anti-

trust scrutiny, the allocation of antitrust risk be-

tween the parties is often the second most

significant negotiation issue, following only price.

Sellers push buyers to do anything and everything

necessary to make sure that the clearances are

secured, while buyers want to be able to walk

away from a transaction if a regulator insists on a

remedy that undermines the value of the deal.

A range of antitrust risk allocation provisions

are possible, but parties typically default to one of

the following, set out from the most seller-friendly

to the most buyer-friendly:

E Hell or high water (HOHW): The buyer

must agree to any remedy required to garner

antitrust approvals. At its most extreme, a

buyer that agrees to a true HOHW provision

could be required to sell the entire target im-

mediately after closing.

E Obligation to divest up to a limit: The

buyer is obligated to divest up to a negoti-

ated limit, but if the buyer cannot secure

regulatory clearance within that limit, it can

terminate the transaction agreement. The

limit can be described in either numerical or

descriptive terms, sometimes taking the

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form of a specified list of facilities or a capacity or

revenue figure, or it could be defined in words as, for

example, a remedy that would not have a material

adverse effect on the target.

E Reasonable best efforts, without a specific obliga-

tion to agree to a remedy: The buyer must use rea-

sonable best efforts to secure antitrust approvals. The

provision is sometimes viewed as being “silent” with

respect to antitrust risk allocation because it does not

include an explicit obligation to agree to a remedy.

For most buyers, a HOHW is too much risk to take on.

On the other hand, a seller may balk at a limit on the rem-

edy obligation. To address these concerns, parties some-

times pair a commitment to divest with a break fee,1 which

the buyer must pay if it abandons the transaction for regula-

tory reasons. Break fees can bridge the gap between the

available alternatives, allowing a buyer to avoid a HOHW

but giving a seller comfort that a buyer won’t abandon and

pay the fee if a reasonable fix can be found.

When looking at trends in antitrust risk allocation,

transactions that don’t raise antitrust concerns don’t have

much value as precedent. For a buyer that does not think it

will be required to offer antitrust remedies, a HOHW is a

meaningless “give” in the back and forth of a negotiation.

Similarly, a seller who does not expect the buyer to present

serious antitrust issues will often choose not to expend any

of its negotiating chips on the antitrust risk allocation

provisions. Therefore, when thinking about risk allocation

provisions, we think it makes more sense to focus on

transactions where the parties expected substantive anti-

trust issues.

To understand how parties allocate antitrust risk in cases

where it matters, we collected data on 1,156 merger agree-

ments between 2010 and 20162 that involved a public U.S.

target. We then focused on the 120 transactions where the

parties disclosed that the U.S. Federal Trade Commission

or Department of Justice issued a Request for Additional

Information or Documentary Material (Second Request).

Because it is extremely unlikely, in our experience, that a

Second Request would be issued if the parties had not

foreseen some level of antitrust risk, this approach focuses

on transactions where we believe the parties should have

anticipated an in-depth antitrust review or remedies

requirement when the transaction was negotiated.

Figure 1 shows the antitrust risk allocation provisions

used in the 120 transactions involving a Second Request.

While sellers often include a HOHW in the first draft of

the transaction agreement, the data shows that the most

common way to allocate antitrust risk is a commitment to

divest up to a limit, with or without a break fee. Of the 120

transactions, 93 (77.5%) involved a commitment to divest

up to a limit, with or without a break fee. Of those, 41

transactions included a break fee, while 52 did not. Seven

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additional transactions (5.8%) contained only an antitrust

break fee.3 Perhaps most interestingly, only six transac-

tions (5%) included a HOHW provision. Fourteen transac-

tions (11.7%) were silent or contained only a reasonable

best efforts provision.

The data also shows that antitrust break fees have

become more common since 2010. At the same time, the

average amount of a break fee as a percentage of equity

value4 has declined. Figure 2 shows these relationships,

with the top solid line showing the number of Second

Request transactions that included an antitrust break fee in

each year, and the bottom solid line showing the average

antitrust break fee as a percentage of transaction equity

value. In each case, the dotted line shows the overall trend:

more transactions with an antitrust break fee, but a lower

average break fee as a percentage of equity value.

In addition, the standard deviation5 of the value of

antitrust break fees decreased between 2010 and 2016. In

other words, while the average value of a break fee has

decreased, the range of typical break fees has tightened.

From 2010 to 2012, the range of antitrust break fees as a

percent of equity value was between 0.2% to 37.3% with a

standard deviation of 8.5%6, but from 2015 to 2016, the

range of antitrust break fees as a percentage of equity value

was between 0.6% and 8.7% and the standard deviation

shrunk to 2.0%.

The data suggests some useful trends that can be help-

The M&A Lawyer July/August 2017 | Volume 21 | Issue 7

3K 2017 Thomson Reuters

ful to parties negotiating antitrust risk allocation

provisions. However, it is important to keep in mind that

Second Requests are exceedingly rare and that this analy-

sis is based on a very small data set of 120 transactions

where outliers can have a disproportionate effect on the

data. In addition, antitrust risk allocation provisions are not

negotiated in a vacuum. Parties negotiating transactions

often point to the precedent for their provision of choice.

However, antitrust risk allocation provisions—like any

other provision—ultimately reflect the circumstances in

which the transaction was negotiated. In an auction situa-

tion, a strategic buyer may be pressured to accept a HOHW

to compete with private equity buyers, which usually do

not foresee any antitrust risk and are happy to offer one.

On the other hand, in a merger of equals or an all-stock

transaction, the parties will both have a stake in the syner-

gies expected post-closing, so may agree to share the

antitrust risk because they will share in the transaction’s

upside.

With these caveats, the data suggests some interesting

food for thought.

E HOHWs are not typical in transactions that raise

substantive antitrust concerns. Although many

sellers (and their lawyers and investment bankers)

initially seek a HOHW and point to prior transac-

tions without antitrust concerns as evidence that

HOHWs are the norm, HOHWs were actually quite

unusual in transactions that received a Second

Request. Only 5% of Second Request transactions

between 2010 and 2016 included a HOHW.

E Commitments to divest up to a limit—with or

without break fees—are the norm. The most com-

mon type of antitrust risk allocation provision be-



tween 2010 and 2016—by far—was an obligation to

divest with or without a break fee. Over that period,

93 out of 120 (77.5%) transactions that received a

Second Request included this provision; 41 of these

transactions also included a break fee and 52 did not.

It is worth noting that including a commitment to

divest up to a limit in an SPA may bring its own

problems, most importantly that it can create a road

map for regulators as to the remedies that a buyer

will have no choice but to accept or alert regulators

to an issue that they may otherwise have missed.

E The typical value of a break fee is decreasing, and

there are fewer outliers. Between 2010 and 2016,

the average value of a break fee in a Second Request

transaction declined from 6% to 4%, and the range

of break fees in any given year shrank. This is evi-

denced by the decreasing standard deviation from

8.52% from 2010 to 2012 to 2.0% from 2015 to

2016, and the 2016 average antitrust break fee of

3.90% as a percentage of equity value. The fact that

the range of break fees is becoming more tightly

clustered may suggest that parties are becoming

more sophisticated in the way that they negotiate

these provisions. Based on our experience, it is best

practice for the parties to undertake a meaningful

antitrust assessment before negotiating antitrust risk

allocation, and we think that this practice has become

the norm.

We continue to study the data and trends, and invite

observations and conversation on the topic.

ENDNOTES:

1Contrary to a forward break fee, which is payable by atarget to the buyer if the seller abandons the transaction inresponse to a topping bid, we refer here to a regulatory re-verse break fee, which is a fee paid by a buyer to the targetif the acquirer abandons the transaction because it is un-able to secure antitrust approval.

2We used public transactions from Westlaw’s PracticalLaw What’s Market. Without question there will be othertransactions where the parties foresaw antitrust risk thatare not included in the data; for example, transactions inwhich the parties avoided a Second Request altogether.There also will be private transactions that presented seri-

ous antitrust issues, but many of the transaction agreementsaren’t publicly available.

3Two transactions, Actavis/Allergan and Dow/DuPont,did have both a HOHW and a break fee.

4In Figure 2, equity value is used. However, usingenterprise value results in a similar trend.

5For readers more than a few years removed from astatistics class, a standard deviation measures the distancethat most values in a dataset are from the average, with ap-proximately 68% of the values within one standard devia-tion on a symmetrical bell-shaped graph. A small standarddeviation suggests that the values are clustered closelyaround the average, while a large standard deviationindicates that the range is more dispersed.

6Removing the highest break fee (37.26%) from thedata set still leaves a maximum break fee of 21.05% dur-ing this period with a standard deviation of 4.65%.

THE M&A LAWYER

ROUNDTABLE: THE

INTERNATIONAL ANTITRUST

PICTURE, 2017

While the antitrust regime of the Trump administration

remains a developing picture, there are equally interesting

changes happening across the Atlantic and Pacific oceans.

As a follow-up to our roundtable on domestic antitrust (The

M&A Lawyer, June 2017), we interviewed two lawyers

with extensive experience in Europe and Asia. Our conver-

sation centered on how antitrust has changed in both

regions over the past five to ten years, and what to expect

in the future. We spoke in late July 2017.

Peter J. Wang is the partner-in-charge of Jones Day’s

China region, based in the firm’s Shanghai and Beijing of-

fices, and coordinates Jones Day’s competition practice in

Asia. He has handled U.S. and Chinese government anti-

trust investigations of proposed mergers and acquisitions,

including Baxter’s acquisition of Gambro, Goodrich’s

acquisition by UTC, GM’s acquisition of Delphi, Alcatel’s

merger with Lucent, America Online’s merger with Time

Warner, and Procter & Gamble’s acquisition of Clairol.

Alexandre G. Verheyden is a partner in Jones Day’s

Brussels office and coordinates Jones Day’s competition

practice in Europe. He recently represented Wabtec in its

merger with Faiveley, Huber in its acquisition by Evonik,



and COMREG in relation to the merger filings that resulted

in the consolidation of the mobile communications sectors

in Ireland and Germany.

The M&A Lawyer: There is a sense among some U.S.

antitrust lawyers that the next few years could see a grow-

ing divergence between the U.S. regime and its counter-

parts in the European Union, China, and Japan, among

other regions. Is that a fair assessment? What are you see-

ing from your perspective?

Alexandre Verheyden: In the U.S., enforcement has

been in part a reflection of the administration in place. In

the EU, there is little room for political interference in re-

lation to enforcement policy. There are four major factors

that have influenced the evolution and application of

[European] competition law over the last decade or so.

First is the change in the legal tests for mergers. Since mov-

ing to the test of significance impediment to effective com-

petition, the SIEC test, this has enabled EU authorities to

shift away from standard dominance assessments and to

focus rather on concerns relating to the lack of competitive

nature of the market. In the SIEC test environment, when

you have a [small] number of players left in a given mar-

ket—for example, going down from five to four players—it

can raise scrutiny from the Commission.

The second factor is that there’s a greater reliance on

economic analysis. In complex matters, the Commission

will include its own team of economists and sometimes

third parties assisted by their own economists as well. It’s

[leading to] a profound evolution of European competition

law. A third factor is that global companies are no longer

limited to primarily one jurisdiction. Now China is also

becoming a key jurisdiction, for instance, and there are a

large number of countries that have adopted merger

regulations. In the past, a company would notify its merger

before a few authorities. Now it’s not unusual to notify

before a much larger number of authorities. This raises is-

sues about the timing of clearances and it’s raising issues

of consistency. It adds one more layer of complexity in the

process.

And there’s a fourth factor that has really emerged in

the past four years or so, which is probably more of a policy

nature. The Commission is paying increasing attention to

protecting technological innovation. This is an argument

that’s increasingly used in the context of mergers when the

facts lend themselves to such a review. So these are the

factors that are now influencing the evolution of competi-

tion law, much more than, say, the type of administration

in place.

Peter Wang: About five or 10 years ago, China and Asia

in general weren’t even on the radar for merger review—

really, for antitrust in general. So this is all still very new to

us. Everyone is learning as they go. Development [in Asia]

has been generally moving towards convergence with the

older, more established antitrust regimes. In particular,

Europe. The two most aggressive jurisdictions in Asia—

China and Korea—have tended to view the EU model as

being closer to their own legislative or legal models. In

that sense, that’s still the case—they generally look to what

the EU is doing first. Whereas the U.S. was considered kind

of an outlier because it was more permissive, and case-

based, and the agencies have to go to court to sue. All of

those things are fairly unusual to Asian regulators, who

have complete regulatory authority over the deals they’re

reviewing.

In the later part of the Obama administration there was

a twist, as it became quite aggressive, especially in its

willingness to challenge mergers and apply the sort of eco-

nomic tools that Alexandre is talking about. In a way, the

U.S. started to look more like everyone else. We were start-

ing to see some aggressive theories being advanced to

potentially merging parties from all of these jurisdictions,

not just the Europeans. Now it could be coming from China

or Korea, or even from the U.S. In a way, that meant a

growing convergence but it also made it a bit tough for

merging parties. You start trying to determine which

jurisdictions are more reasonable, which will care more

about a deal, which would consider the efficiencies of the

deal more.

So when I think about the Trump administration, I think

we’re going to revert to the norm. It’s reasonable to expect

that [the new antitrust regime] might be more like the U.S.

was in the past, which would mean the U.S. may pull back

some of the more aggressive theories that we’ve seen com-

ing from there. That in turn might leave Asian authorities



more out on a limb. They may end up getting ahead of U.S.

enforcers on deals.

MAL: Alexandre mentioned protecting technological

innovation as a growing European priority, but that would

seem to be important for the likes of China and Japan as

well.

Verheyden: As far as the EU is concerned, what’s fuel-

ing this need to protect technological innovation is a feel-

ing at policy level that the European economy has not in-

novated as much as it could have in the past, and that

bottlenecks on necessary inputs on technology have been

part of the reason for this. There have been a number of

merger cases where the Commission put an emphasis on

technological innovation, and this is not exclusively in the

area of mergers, as the recent Commission Google deci-

sion demonstrates.

Wang: We’re seeing concerns and theories about the ef-

fects on innovation resonating in China and other jurisdic-

tions—particularly Korea, and also in Taiwan and Japan. It

can be hard to separate where there are real concerns, and

attempts to look at the effects on innovation for a particu-

lar industry, from simply local interests. Innovation-based

theories historically haven’t been pursued very aggres-

sively, especially in countries like the U.S., because they’re

inherently speculative. They’re essentially trying to predict

the future. Everyone is trying to adjust for a more dynamic

business environment, which means there’s a lot more

room for discretion by regulators. You can look into the

future and see what you think you want to see.

MAL: There was an increased emphasis on vertical

merger enforcement during the later Obama years. Is that

a concern for other countries’ regimes?

Wang: Vertical enforcement in general has become a

very high priority of China and, increasingly, all around

Asia. It reflects a general sense that there are cases where

companies are being affected adversely by their rivals’

vertical relationships. They may have unequal bargaining

power in one side or other of those relationships. There’s a

sensitivity as to how will the downstream customers or

sometimes upstream clients be affected by this consolida-

tion? China in particular has a very aggressive stance, not

only looking at [vertical] issues but setting pretty low

thresholds for when they will start to look at things very

closely. Thresholds include the percentage of market share

on either the upstream or downstream side, which is usu-

ally much lower than what normally would have expected

in other jurisdictions.

Verheyden: As far as Europe is concerned, there’s been

some attention on vertical mergers but I can’t say it’s a

new trend. The threshold for regulatory intervention is still

much higher than it is for horizontal mergers, so I’m not

convinced that we’re at any turning point in terms of

enforcement strategy.

MAL: A speculative question for Alexandre: should

Brexit go forward and the UK leaves the European Union,

does that add another layer of complexity for deal review?

Verheyden: I’m not sure Brexit will change much. Of

course, if there’s a Brexit, a company will technically have

one more filing to do. But as I mentioned before, most of

these complex mergers involve a fairly high number of fil-

ings already, so one more filing may not be a game-changer

in such cases. Another reason not to expect a significant

impact is that the UK regime is voluntary, which gives par-

ties the option of not notifying, although only to a limited

extent. So yes, at most the UK will likely be one more

European country where a company may need to notify.

MAL: Has the timing of clearances become more

complex? With the growing number of notifications re-

quired, is it harder for a deal to get cleared?

Verheyden: For the timing of clearances, whenever a

deal is negotiated, there’s a fair amount of work that’s done

ahead of time: seeing which jurisdictions are likely to

require filings and whether the deal is likely to attract

regulatory scrutiny. Sometimes you do it based on infor-

mation you have received during deal negotiation, although

the information provided by the parties is not always

complete. Once the deal is signed and you start working on

notifications, most jurisdictions do not have a mandatory

notification timeframe, so you can take the time necessary

to prepare the relevant filing (subject of course to the tim-

ing agreed between the parties). In my experience, you ba-

sically focus first on the countries which you expect to raise



some concerns or which by experience take more time than

others to reach a position. This is not playing one agency

against another, in particular because you know that they

are likely to exchange information between each other.

Wang: I’d add one point specifically on China. In many

global deals, the China review becomes the jurisdiction

that’s most likely to have the longest approval process.

That has been improving for simpler deals but I think it

still remains the case. As Alexandre was saying, you can

expect all the regulators to exchange information on where

they stand in the process as well as on substantive issues.

In the great majority of cases, you’re seeing convergence

not just on substance but on the process too. Everyone is

always asking each other what’s their status, who’s going

to clear when. In most cases, nobody wants to be the outlier

who’s holding up a deal that the rest of the world doesn’t

see problems with. But then there are a small minority of

cases where the review in a particular jurisdiction, which

often has been China in the past, will take a lot longer. This

is often because of a substantive divergence in the way a

jurisdiction looks at things. Sometimes there’s a different

competitive analysis at play. Other times there could be

different domestic concerns. The [agency] might be look-

ing for feedback from stakeholders— not just directly-

affected customers but government agencies and trade as-

sociations that have a role in regulating the industry in

question. Sometimes you can get cases in China where the

nature and the volume of the feedback will drag out the

process. Those situations have become frustrating for

merging parties. It’s often difficult to understand the real

competition issues at stake and some jurisdictions aren’t

transparent. They won’t let you see what third parties have

complained about, they won’t let you directly talk to the

economists that are working for them. So you can feel like

you’re shooting in the dark.

Again, that’s for a small minority of cases. But it is

there, and it drives the perception that China is a problem

from a deal timing perspective. As result, on the negotia-

tion side companies are doing their utmost to manage

whether they need to have a China filing, and if they need

to have one, thinking proactively how that timeline is go-

ing to work.

MAL: Do European and Asian regimes seem more open

to deal remedies than in the past?

Verheyden: As far as Europe is concerned, only an

extremely small number of deals are prohibited. There

have been only two such cases over the past twelve months.

By and large, for most of those cases where there are

concerns, the Commission is amenable to finding a remedy.

A good example is GE’s recent acquisition of Alstom’s

turbine business. There was an issue in relation to certain

types of turbines and the Commission accepted a fairly

complex remedy addressing the issue of innovation in the

market. It’s a good example of a flexible approach taken

by the Commission.

The challenge we have sometimes is that the type of

remedies the Commission accepts in “Phase I” and “Phase

II” are different. In Phase I, the Commission is looking for

very clear-cut remedies, which means that sometimes that

parties have to propose more than would be strictly neces-

sary to address the Commission’s concerns. Phase I simply

doesn’t allow for enough time for back-and-forth and

extensive market testing of complex remedies. By contrast,

in Phase II, you’ve got more time and more options, in

terms of when you offer remedies, and the Commission

has more time to assess these. The Commission has a bet-

ter understanding of the market and the issues, which al-

lows for remedies that can be better crafted and strictly

limited to the concerns identified.

Wang: We’re starting with a very short historical

sample here, but there has been increasing skepticism [in

Asia] about the quality of buyers, driven by the skepticism

that’s coming out of the U.S. and to a lesser extent Europe.

That has led to a similar kind of movement towards often

preferring upfront buyers in a divestiture situation. Also,

the MOFCOM rules in China specifically appear to require

that MOFCOM needs to be presented with a choice of buy-

ers, although in practice it’s difficult to work out if you

need to obtain multijurisdictional approvals over the

remedy.

For a long time, conduct remedies have been an impor-

tant part of MOFCOM’s jurisprudence. A lot of them are

very standard things but with a twist. There are standard

firewalls and nondiscrimination requirements, of course,



but often the aim has been to make sure that Chinese

customers or sometimes Chinese suppliers are treated

fairly and have equal access to supply. Sometimes [MOF-

COM] goes beyond that and says they want the parties to

continue to deal with China as they have before. They’re

trying to lock in consistency and predictability for a com-

mercial process for a particular industry. That’s a very

important concern in Asia. We’ve seen some remedies

directed at having market forces be relatively stable—pric-

ing and supply. As Alexandre said, we’ve seen fewer

outright rejections of transactions. In each case, it was a

unique circumstance. In other cases, however, the deals

weren’t officially rejected but they were dragged out for so

long the parties withdrew the deal. That’s happened on a

few occasions.

Another interesting thing to note is that other Asian

jurisdictions, Korea in particular, in the last few years have

appeared to be more willing to just outright reject a deal as

proposed. We’ve seen that a few times. Sometimes it’s

surprising even to the parties involved. [An agency] would

just reject proposed remedies and block the deal instead of

engaging in back and forth trying to get to a negotiated

solution. This may have something to do with the proce-

dural limitations in their review process. They may not

have as much flexibility to extend their process or engage

in back and forth.

It’s an issue that we need to be aware of as we handle

these global deals. I think we’re going to see more jurisdic-

tions becoming more active. Each has its own

idiosyncrasies. I don’t think the substance will diverge on

the surface as much as there will be local differences and

interests. The main issue is we’ll have to manage all sort of

procedural timelines, as many countries have different

processes and timelines for approval of a remedy or

divestiture. That all needs to be mapped out ahead of time.

MAL: What do you see on the horizon now—is there

new legislation or regulation that could have an impact on

the European or Asian antitrust regimes?

Verheyden: The four main trends I mentioned earlier

are the main parameters we’re faced with now. I don’t

expect those to change. They could contribute to increased

case complexity, but this also provides parties with more

opportunities as well. The legal and economic tools we

have today can provide parties with additional arguments

to demonstrate that a merger leading to high market shares

will not necessarily affect competition. So while cases are

becoming increasingly complex, it’s also a window of op-

portunity for businesses.

Wang: I think there’s a great deal of opportunity, but

danger also, in an increased focus on economic analysis. I

think that’s spreading through the world and it’s not going

to be pulled back now. But the key is how it’s done. We

have a lot of tools that can give you insight but they’re

limited by the quality of data and the assumptions that

regulators make with it. What we see sometimes happen-

ing from jurisdictions further away from the U.S. and

Europe is a tendency to use these tools without at least

acknowledging any limitations on their validity or how in-

formative they can be. You will see agencies like MOF-

COM hiring outside economists, which is generally a posi-

tive outcome. But it’s still hard to evaluate given the lack

of transparency—we can’t actually see the reports of these

outside economists. When we don’t know how much detail

they go into, or the quality of the data they rely on, it’s

hard for us to respond.

The last thing I’d mention is that the growing interplay

of all these jurisdictions is having both good and bad

effects. On the one hand, the agencies can help each other,

each can educate the other, they can get up to speed faster.

But there’s also a danger as well—sometimes you’ll see a

multiplier effect, an amplification effect. If someone had a

particularly aggressive theory of harm, it can spread

around. Third-party complainants can forum-shop, in a

way. They can take their theory around and present it to all

these different agencies until they find one that thinks it’s

interesting enough to pursue. And from a process perspec-

tive, some agencies may be coming from jurisdictions

where their procedural structure doesn’t set relatively high

barriers for the challenge of deals. The leverage over par-

ties is completely different. We’re seeing the potential in

which a complainant that has what once was considered an

iffy challenge can now take that theory to another jurisdic-

tion, where the agency does not need to convince a court,

but instead the burden is on the parties to prove it’s not a

problem. This could change the dynamic of the deal review

process.



DELAWARE SUPREME COURT,

REVERSING CHANCERY

COURT, INTERPRETS POST-

CLOSING PURCHASE PRICE

ADJUSTMENT “TRUE UP”

NARROWLY, BASED ON THE

SPECIFIC FACTUAL

CONTEXT—CHICAGO BRIDGE

v. WESTINGHOUSE

By Gail Weinstein, Christopher Ewan, Steven J.

Steinman and Brian T. Mangino

Gail Weinstein is senior counsel in the New York office of

Fried, Frank, Harris, Shriver & Jacobson LLP.

Christopher Ewan and Steven Steinman are partners in

Fried Frank’s New York office. Brian Mangino is a partner

in Fried Frank’s Washington DC office.

Contact: [email protected] or

[email protected] or


[email protected].

In Chicago Bridge & Iron Company N.V. v. Westing-

house Electric Company LLC1, the Delaware Supreme

Court interpreted a purchase agreement net working capital

“True Up” as a “narrow, subordinate, and cabined remedy.”

The buyer contended that the seller’s post-closing net

working capital calculations were flawed because the sell-

er’s historical accounting practices in preparing the target

company’s financial statements were not compliant with

GAAP. The seller argued that, under the purchase agree-

ment, the buyer’s only remedy for breaches of representa-

tions and warranties had been a refusal to close (which the

buyer had foregone)—and that, therefore, the buyer could

not properly request that the dispute resolving auditor

make a determination with respect to claims about GAAP

compliance of the financial statements. The Supreme Court

ordered that the Court of Chancery “enjoin [the buyer]

from submitting to the [auditor] or continuing to pursue”

the claims that were based on the historical accounting

issues. The only claims that could be submitted and

pursued, the Supreme Court held, were those “based on

changes in facts and circumstances between the signing

and closing.”

As a result of the decision, the buyer’s $2 billion claim

with respect to the post-closing purchase price adjustment

was reduced to less than $70 million. The Supreme Court

emphasized that the decision was grounded in the specific

factual context of the case. The first sentence of Chief

Justice Strine’s opinion reads: “In giving sensible life to a

real-world contract, courts must read the specific provi-

sions of the contract in light of the entire contract.”

Key Points

E The decision confirms that a provision requiring a

“True Up” at closing of net working capital for

purposes of determining a purchase price adjustment

will generally be considered to be a narrow remedy,

relevant only to changes occurring between signing

and closing—and cannot be used as an end-run

around purchase agreement provisions that limit li-

ability for breaches of representations and

warranties.

E The decision underscores, however, that the specific

language of a True Up provision, the other provi-

sions of the purchase agreement, and the overall

context of the deal, will influence the court’s inter-

pretation of the breadth of the claims that can be

made under the True Up.

Background

CB&I Stone & Webster, Inc. (the “Company”), a sub-

sidiary of Chicago Bridge & Iron Co. (the “Seller”), had

been building nuclear power plants, in partnership with

Westinghouse Electric Company (the “Buyer”). As delays

and cost overruns mounted, the relationship became

“contentious.” To resolve their differences, the Seller

agreed to sell the Company to the Buyer, with the Buyer

paying zero dollars as a purchase price but assuming all of

the liabilities of the Company. (Cost overruns at these proj-

ects, in the billions of dollars, ultimately forced the Buyer

into bankruptcy in March 2017—also threatening the

financial viability of the Buyer’s parent, Toshiba Corp.)

The Purchase Agreement provided as follows:

E True Up. The purchase price of zero was based on a

target net working capital amount of $1.174 billion.



The Agreement provided for a “True Up” at closing,

and a post-closing purchase price adjustment to the

extent that actual net working capital at closing

varied from the target amount. The Seller was re-

quired to continue to run the Company in the ordinary

course of business until closing.

E Liability Bar. The Agreement provided that the

Buyer’s sole remedy if the Seller breached its repre-

sentations and warranties was to refuse to close; that

the Seller would have no liability for monetary dam-

ages post-closing (the “Liability Bar”); and that the

Buyer would indemnify the Seller for all post-closing

claims or demands against, or liabilities of, the

Company.

E Dispute Resolution. Any dispute over the post-

closing purchase price adjustment was to be submit-

ted to an independent auditor (the “Auditor”)—who

was to act “as an expert, and not as an arbitrator”; to

issue a decision, in the form of a “brief written state-

ment,” within 30 days; and to rely on the parties’

written submissions as the sole basis for its decisions.

The Court of Chancery ruled in favor of the Buyer, rea-

soning that the mandatory dispute resolution provision in

the Purchase Agreement meant that all disputed issues re-

lating to the post-closing adjustment were to be submitted

to the Auditor.2 The Supreme Court reversed, finding that

the lower court decision—which would have permitted a

“wide-ranging” challenge to the Company’s historical

financial statements—was inconsistent with (i) the Li-

ability Bar provision of the Purchase Agreement; (ii) the

structure of the True Up, which reflected that it was a “nar-

row,” “confined” remedy that related to the period between

signing and closing; and (iii) the general tenor of the deal

and other terms of the Purchase Agreement, which indi-

cated an intention to provide a “clean break” for the Seller.

Discussion

The Supreme Court viewed the True Up as a narrow

remedy that could not be used as, in effect, an end run

around the Liability Bar. In the Supreme Court’s view,

the Buyer’s claims were, “in essence, claims that [the

Seller] breached the Purchase Agreement’s representations

and warranties. . ..” The claims “therefore are foreclosed

by the Liability Bar,” the Supreme Court held. The Court

of Chancery decision, the Supreme Court wrote, by “read-

ing the True Up as unlimited in scope and as allowing [the

Buyer] to challenge the historical accounting practices

used in the represented financials, . . . rendered meaning-

less the Purchase Agreement’s Liability Bar.” The Buyer’s

sole remedy if the financial statements were not GAAP-

compliant was to refuse to close, the Supreme Court

stated—which the Buyer had chosen not to do.

The Supreme Court confirmed that the main role of

a True Up, as a general matter, is to account for changes

in the target company’s business between signing and

closing. The Supreme Court rejected the Court of Cha-

ncery’s interpretation of the True Up as “providing [the

Buyer] with a wide-ranging, uncabined right to challenge

any accounting principle used by [the Seller].” Rather, the

Supreme Court wrote, the True Up, “[w]hen viewed in

proper context, . . . is an important, but narrow, subordi-

nate, and cabined remedy available to address any develop-

ments affecting Stone’s working capital that occurred in

the period between signing and closing.” The Supreme

Court reviewed that generally the purpose of a True Up is

to “maintain the underlying economics of the parties’

bargain”—in this case, to ensure that the Seller would

continue to operate the Company “as though it were still

its own business, but without worrying that pursuing

normal construction operations would benefit [the Buyer]

to [the Seller’s] own detriment”; to protect the Buyer

against the Seller or the Company “suddenly shift[ing]

course in how it chose to treat [the Company] from an ac-

counting perspective”; and to protect the Buyer against

“end[ing] up worse off than it was at signing” if “[the

Seller] didn’t follow through with the construction program

or if the Buyer and the utilities paid a bunch of their

bills. . ..”

The Supreme Court viewed the language of the True

Up as supporting the view that it could not be used to

challenged past accounting practices. The Supreme

Court noted that the True Up “emphasizes that net working

capital should be determined in a manner consistent with

GAAP, consistently applied by the seller in preparation of

the company’s financial statements.” Other pertinent



language in the agreement also requires consistency with

past practices and with “the basic idea that the True Up is

used to set a Final Purchase Price based on developments

after the initial price of zero was set.” Thus, the Court

concluded, “the True Up was tailored to address issues that

might come up if [the Seller] tried to change accounting

practices midway through the transaction or if it stopped

work on the projects, rather than continue to invest as

expected [and as required by the covenant to run the busi-

ness in the ordinary course until closing].”

The parties’ expectation, according to the Court, was

that, “at closing, [the Buyer] would get [the Company] and

[almost certainly would] have to make a payment to [the

Seller], [under the True Up,] to account, for example, for

the expectation that [the Seller] would make substantial

capital expenditures before closing so [the Company]’s

construction projects could continue.”

The Supreme Court viewed the limited role of the

Auditor as confirming the narrow role of the True Up.

Moreover, the Court noted, the structure of the dispute

settlement provision confirmed that the True Up was to

have a “subordinate and confined purpose.” The settlement

procedure required a brief written statement by the Audi-

tor, issued within the “expedited timeframe” of 30 days,

with reliance only on the parties’ written submissions. The

Court stated:

[T]he reason parties can hazard having an expert decide

disputes in this blinkered, rapid manner is because when

considering claims under the True Up, the expert is address-

ing a confined period of time between signing and closing

using the same accounting principles that were the subject of

due diligence and contractual representations and warranties,

and thus formed the foundation for the parties’ agreement to

sign up and close the transaction.

The Supreme Court viewed the overall context of

the deal as supporting its interpretation of the True Up

as a narrow remedy. “The basic business relationship be-

tween parties must be understood to give sensible life to

any contract,” the Chief Justice wrote. The zero purchase

price, assumption of all liabilities by the Buyer, Liability

Bar, and other provisions of the Purchase Agreement, and

the genesis of the deal as a resolution of the various differ-

ences between the parties in running the construction proj-

ects, indicated an intent to provide the Seller with a “clean

break,” the Supreme Court wrote.

The “essence of the deal” was that “[the Seller] would

deliver [the Company] to [the Buyer] for zero dollars up

front consideration and, in return, would be released from

any further liabilities connected with the projects.” Not

only would the Buyer indemnify the Seller against future

liabilities, the Court wrote, but closing was contingent on

the Seller receiving releases from the utility company that

would operate the plants when they were completed. The

Court concluded: “The key provisions of the Purchase

Agreement show and the business context they highlight

demonstrates, [the Buyer]’s view that the Purchase Agree-

ment gave it a free license to re-trade the core common

basis of the exchange is beyond strained; it involves a re-

writing of the contract embodying that exchange.” More-

over, the Court noted, the accounting practices about which

the Buyer complained were known to the Buyer prior to its

entering into the Purchase Agreement and were reflected in

the very financial statements on which the Buyer relied

when deciding to enter into the deal.

Justice Strine characterized “the sum total of [the

Buyer’s] logic” to be as follows:

Based on challenges to large items included in the [Seller’s]

financials that [the Seller] represented were GAAP compli-

ant, which [the Buyer] knew about before closing, and which

[the Buyer] did not use as a basis not to close, [the Buyer]

now says that it should keep [the Company], which it got for

zero dollars, and be paid by [the Seller] over $2 billion for

taking it!

Practice Points

E It should be kept in mind that a court’s interpretation

of a contract provision will be influenced not only by

the language of the provision and the contract as a

whole, but also the overall history and context of the

deal. Clarity in drafting is key, as unambiguous

language will be applied as written.

E Although most of the issues in Chicago Bridge arose

because of the Liability Bar in the purchase agree-

ment, the decision is a reminder of the need to draft

a True Up with clarity and precision. Based on Chi-

cago Bridge, parties should consider stating whether



a closing True Up is intended to cover only changes

occurring in the business between signing and clos-

ing (and, if so, which changes). Attaching hypotheti-

cal examples can be helpful.

E Parties should be mindful that the timeframe and

other parameters set forth for a settlement process

may influence the court’s view of the breadth of a

settlement dispute provision purporting to cover

“all” disputes. Parties should consider stating

whether the structure of the settlement process is or

is not reflective of the parties’ intent with respect to

the substantive breadth of the True Up.

ENDNOTES:

1(June 28, 2017.)

2See Michael P. Conway, Bryan E. Davis, ElizabethClough Kitslaar and James A. White, “Accounting True-UpVs. Valuation Dispute,” The M&A Lawyer, February 2017,Vol. 21, Issue 2.



FEDERAL JUDGE BLOCKS

MERGER OF NUCLEAR

WASTE DISPOSAL

COMPANIES REJECTING

“FAILING FIRM” DEFENSE

By Mary Strimel

Mary Strimel is a partner in the Washington DC office of

McDermott Will & Emery. Noah Feldman-Greene, a

McDermott summer associate, also contributed to this

article.

Contact: [email protected].

On June 21, 2017, U.S. District Judge Sue L. Robinson

blocked EnergySolutions, Inc.’s proposed acquisition of

Waste Control Specialists LLC (WCS), applying a strict

standard for the “failing firm” defense to a merger

challenge. The parties compete in the disposal of low level

radioactive waste (LLRW). WCS had argued that it would

be forced to exit the market due to heavy operating losses

if the transaction were not approved. Judge Robinson’s

recently-released opinion provides insights into how ag-

gressively a putative failing firm must shop its assets to

third parties before it can qualify for the failing firm

defense to an otherwise anticompetitive merger.

What Happened

The U.S. Department of Justice (DOJ) filed suit in

November 2016 to enjoin the proposed acquisition of WCS

by EnergySolutions, arguing that the merger would lead to

a substantial lessening of competition in the LLRW dis-

posal industry. DOJ alleged that EnergySolutions and WCS

are the only significant competitors in this industry for the

relevant geographic market.

The court found that the government easily established

a prima facie case of anticompetitive effects by demon-

strating that the proposed acquisition would create a firm

controlling an exceedingly high percentage of the relevant

market and result in a significant increase in market

concentration. Judge Robinson identified two product

markets: the disposal of higher-activity LLRW and the dis-

posal of lower-activity LLRW. In both markets she found

that the relevant measures of concentration “blow past the

presumptive barriers” for harm to competition, especially

in regards to higher-activity LLRW where the transaction

would result in a “merger to monopoly.”

The defendants’ main defense to rebut the government’s

prima facie case was that WCS was a “failing firm.” The

failing-firm doctrine considers the possible harm to com-

petition resulting from an acquisition preferable to the neg-

ative impact on competition, loss to stockholders, and neg-

ative effect on local communities that result when a

company goes out of business. Judge Robinson’s opinion

explains that in order to assert a valid failing firm defense,

the defendants must show that WCS faces the “grave pos-

sibility of business failure” and that there was no “other

prospective purchaser.”

Judge Robinson avoided deciding the more difficult

question concerning whether WCS indeed faced imminent

business failure, finding instead that the defendants failed

to demonstrate that EnergySolutions was the only avail-

able purchaser. According to Judge Robinson, WCS’s par-

ent company failed to make the necessary “good faith ef-

forts to elicit reasonable alternative offers” that would have

lesser negative effects on competition.

The opinion highlights the fact that once it was clear

that the parent company was serious about selling all of

WCS, the parent company had already agreed to several

deal protection devices such as a 30-day exclusivity period

with EnergySolutions and a “no-talk” provision in the

merger agreement. WCS and its parent company thus did

not respond to other companies that reached out to express

interest in acquiring WCS after the transaction with

EnergySolutions was announced.

What This Means

Judge Robinson’s application of the failing-firm doc-

trine is consistent with the approach taken in the joint

Federal Trade Commission (FTC)/DOJ Horizontal Merger

Guidelines1 which require the failing firm to demonstrate

that “it has made unsuccessful good-faith efforts to elicit

reasonable alternative offers that would keep its tangible

and intangible assets in the relevant market and pose a less

severe danger to competition than does the proposed

merger.”

The opinion is also consistent with a March 2015 ar-



ticle2, published by the FTC and discussed here3, that ad-

dressed the agency’s application of the failing firm doc-

trine to the health care context. In the article, the FTC

explained that the mere fact that the acquired firm may be

clearly failing does not quell the FTC’s concerns. Rather,

the agency will seek information from the failing firm

regarding its search for alternative offers, and reach out to

other prospective purchasers to see if they were contacted

and whether they have interest in acquiring the failing firm.

As Judge Robinson’s opinion demonstrates, in the rare

case where merging parties believe that the “failing-firm”

defense may be available to rebut a presumption of anti-

competitive effects, the owners of the failing company

should make serious, good faith efforts to seek out alterna-

tive offers that pose less danger to competition than a

proposed merger. Further, owners of the failing company

should not agree to any deal protection devices or exclusiv-

ity periods with the acquiring firm. The failing company

should be aware that in soliciting reasonable alternative of-

fers, the 2010 Horizontal Merger Guidelines consider any

offer to purchase the assets of the failing firm for a price

above the liquidation value to be a reasonable alternative

offer.

ENDNOTES:

1 https://www.ftc.gov/sites/default/files/attachments/merger-review/100819hmg.pdf.

2 https://www.ftc.gov/news-events/blogs/competition-matters/2015/03/power-shopping-alternative-buyer.

3 http://www.antitrustalert.com/2015/04/articles/mergers-acquisitions/ftc-clarifies-failing-firm-defense.



GERMAN GOVERNMENT

EXPANDS AUTHORITY OVER

TAKEOVERS BY INVESTORS

FROM OUTSIDE THE EU

By Jürgen Beninca, Karin Holloch and Martin T.

Kemmerer

Jürgen Beninca is a partner in the Frankfurt office of Jones

Day. Karin Holloch is a partner in Jones Day’s Dusseldorf

office. Martin Kemmerer is an associate in Jones Day’s

Frankfurt office.

Contact: [email protected] or


[email protected]

The Situation: Rules designed to protect Germany’s

national security interests have been extended to non-EU

investments in “critical infrastructure,” such as energy, wa-

ter, food, IT/telecom, health, banking and insurance, and

transportation.

The Result: Transactions by non-EU investors involv-

ing such critical infrastructure are now subject to additional

rules and potential scrutiny by the German government.

The Outlook: Transactions caught by the new rules may

face additional uncertainty and a prolonged period between

signing and closing. Applying for a certificate of non-

objection can speed the approval procedure but will not

fully remove the uncertainties if a legally binding state ap-

proval for the transaction must be obtained.

On July 18, 2017, the German government enacted

changes to the Foreign Trade and Payments Ordinance

(“AWV”) that significantly expand the scope of the law.

The German Federal Ministry of Economic Affairs and

Energy (“BMWi”) now has the right to investigate and

potentially block deals in the areas of energy, water, food,

information technology and telecommunication, health,

banking and insurance (“B&I”), and transportation that are

classified as “critical infrastructure,” provided that certain

thresholds are met. Companies affected by the AMV

changes include those that work with technical equipment

for (legal) telecommunication surveillance, cloud-

computing services, and components and services for

electronic health files also subject to the AWV.

Following a discretionary investigation, the BMWi can

block non-EU investors from directly or indirectly acquir-

ing 25% or more of a German entity active in these areas if

the deal endangers public or national security. Investments

in targets operating in sensitive security-related areas, such

as military equipment and cryptotechnology, always must

be notified to and cleared by the BMWi.

Companies Providing “Critical Infrastructure”

Facilities in the following seven areas are defined as

critical infrastructure if they reach certain thresholds:

E Energy: Production and distribution of electricity,

natural gas, gas, heating oil, and district heating;

E Water: Supply/disposal of fresh water and sewage;

E Food: Production, processing, and distribution of

food;

E IT/Telecom: Transmission, processing, and storage

of voice and data;

E Health: Inpatient medical care, manufacturing of

life-sustaining medicinal products, prescription

drugs, supply of plasma and human blood, distribu-

tion and transport of such products, and provision of

health services such as laboratories;

E B&I: Supply of cash, card-based money transfer,

conventional money transfer, settlement of securi-

ties, and derivatives; and

E Transportation: Transport of people and goods on

the road, by rail, by boat, and in the air; public

transport; and weather forecast and satellite naviga-

tion systems.

For example, companies producing, processing, stor-

ing, or selling food equaling or exceeding a volume of

434,500 tons or 350 million liters per year qualify as criti-

cal infrastructure. For hospitals, the threshold is 30,000

stationary treatments per year. Logistic centers qualify if

they process 17 million tons of goods per year. In the

financial industry, clearing and settlement services provid-

ers handling 18 million transactions per year are deemed

critical infrastructure, as are clearing and settlement ser-



vices providers for securities and derivatives with a vol-

ume of 850,000 transactions per year.

Companies developing or adapting software designed

to run such infrastructure are also subject to these rules, ir-

respective of their size or the number of their customers.

Thus, the acquisition of a software company active in, for

instance, hospital information or core banking systems by

a non-EU investor also may be investigated and blocked.

Investment Approval Procedure

The BMWi may assess any direct or indirect acquisition

of 25% or more of the voting rights in a German company

(including German subsidiaries or branches of foreign

companies) by a non-EU investor that falls under the

extended AWV. The parties to such a transaction are

obliged to inform the BMWi about the signing to allow the

BMWi to catch relevant transactions early. The BMWi may

initiate a formal investigation of the transaction within five

years after signing, but only three months after it has been

informed about the transaction. The acquirer may ask for a

certificate of non-objection. Such certificate is deemed to

have been issued if the BMWi does not open a formal

investigation within two months after receipt of the

application.

If the BMWi formally opens the investigation, it must

make a decision within four months after receipt of all rel-

evant information. The BMWi may also ask for changes to

the transaction to protect Germany’s interest in public or

national security. While the law does not empower the

BMWi to prohibit the close of a transaction, the BMWi has

ample powers to unwind a deal.

Preliminary Comments and Guidance

Parties contemplating a transaction that is likely to fall

under the extended law on investment approval should take

its effects into consideration, particularly where the parties

are required to inform the BMWi about the transaction.

While a request for a certificate of non-objection will not

always provide the desired level of legal certainty, it is

likely to be a tool of choice that will be seen more often in

the future.

Three Key Takeaways

E Changes to Germany’s Foreign Trade and Payments

Ordinance dictate that the acquisition of a 25% stake

in a German company by investors from outside the

EU can be reviewed by Germany’s Ministry of Eco-

nomic Affairs and Energy.

E Seven areas defined as providing “critical infrastruc-

ture” are subject to the new provisions.

E Business entities considering a transaction that could

fall under the new law should consider its possible

implications for their plans.



FROM THE EDITOR

A Global Flavor for 2017?

As the summer of 2017 begins to wane, speculation is

growing that this year could wind up posting a notable

decline for domestic M&A—possibly the lowest-volume

year for U.S. M&A since the depths of the past recession.

At the same time, however, global M&A is heating up, fu-

eled in particular by a boom in European deals. It could

well turn out that 2017 will be saved for many M&A shops

by their activity overseas.

Cross-border M&A activity totaled $630.9 billion dur-

ing first-half 2017, driven by increased levels of outbound

M&A from U.S. acquirers and growing inbound M&A for

European assets, according to Thomson Reuters data. This

accounted for 40% of overall M&A volume and the high-

est first-half volume since 2007.

And a surge in European deals is a major reason why

worldwide M&A activity hit $1.6 trillion during first-half

2017, up 2% from the first half of 2016. Compare that

relatively minor increase to the skyrocketing jump seen in

European M&A—M&A activity for European targets

totaled $449.0 billion during first-half 2017, up 33%

compared to the same period in 2016. The growth is a fresh

phenomenon: activity rose 45% year-on-year in the second

quarter to $234 billion. Hernan Cristerna, global M&A co-

head at JPMorgan Chase, told Reuters in July that “the EU

recovery is happening and has made companies more at-

tractive, even if there are increased regulatory hurdles.”

Speaking of the latter, this issue of The M&A Lawyer

has another in-depth conversation with Jones Day on the

current state of antitrust. Where in our June issue, we

discussed the cloudy state of domestic antitrust in the

Trump era, our focus now turns to antitrust regimes in the

European Union, China, Japan, and Korea, among other

areas. It’s a different story than in the U.S., with interna-

tional regimes in some cases being far more aggressive

than U.S. antitrust regulators. In particular China, barely

on the radar for global antitrust as little as a decade ago, is

becoming a potentially deal-chilling factor for global

dealmakers.

As Jones Day’s Peter Wang says in our conversation,

“development [in Asia] has been generally moving towards

convergence with the older, more established antitrust

regimes. In particular, Europe. The two most aggressive

jurisdictions in Asia—China and Korea—have tended to

view the EU model as being closer to their own legislative

or legal models. . .Whereas the U.S. was considered kind

of an outlier because it was more permissive, and case-

based, and the agencies have to go to court to sue.” Should

the new U.S. regime cut back on aggressive theories, “that

in turn might leave Asian authorities more out on a limb.

They may end up getting ahead of U.S. enforcers on deals.”

Chris O’Leary

Managing Editor



EDITORIAL BOARD

CHAIRMAN:

PAUL T. SCHNELL

Skadden, Arps, Slate, Meagher & FlomLLP

New York, NY

MANAGING EDITOR:

CHRIS O’LEARY

BOARD OF EDITORS:

BERNARD S. BLACK

University of Texas Law School

Austin, TX

DENNIS J. BLOCK

Greenberg Traurig

New York, NY

ANDREW E. BOGEN

Gibson, Dunn & Crutcher LLP

Los Angeles, CA

H. RODGIN COHEN

Sullivan & Cromwell

New York, NY

STEPHEN I. GLOVER

Gibson, Dunn & Crutcher LLP

Washington, DC

EDWARD D. HERLIHY

Wachtell, Lipton, Rosen & Katz

New York, NY

VICTOR I. LEWKOW

Cleary Gottlieb Steen & Hamilton LLP

New York, NY

PETER D. LYONS

Freshfields Bruckhaus Deringer LLP

New York, NY

DIDIER MARTIN

Bredin Prat

Paris, France

FRANCISCO ANTUNES MACIEL

MUSSNICH

Barbosa, Mussnich & AragãoAdvogados,

Rio de Janeiro, Brasil

PHILLIP A. PROGER

Jones Day

Washington, DC

PHILIP RICHTER

Fried Frank Harris Shriver & Jacobson

New York, NY

MICHAEL S. RINGLER

Wilson Sonsini Goodrich & Rosati

San Francisco, CA

PAUL S. RYKOWSKI

Ernst & Young

New York, NY

FAIZA J. SAEED

Cravath, Swaine & Moore LLP

New York, NY

CAROLE SCHIFFMAN

Davis Polk & Wardwell

New York, NY

ROBERT E. SPATT

Simpson Thacher & Bartlett

New York, NY

ECKART WILCKE

Hogan Lovells

Frankfurt, Germany

GREGORY P. WILLIAMS

Richards, Layton & Finger

Wilmington, DE

WILLIAM F. WYNNE, JR

White & Case

New York, NY



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Postage charged separately. All prices are subject to sales tax where applicable.

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West LegalEdcenter610 Opperman DriveEagan, MN 55123

West LegalEdcenter

610 Opperman Drive, Eagan, MN 55123

Phone: 1-800-344-5009 or 1-800-328-4880

Fax: 1-800-340-9378

Web: http://westlegaledcenter.com

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HARDER) The M&A - Fried Frank