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Regulating cross-border mergers is harder than ever. A study scheduled for release today finds that 67 of 130 countries surveyed have merger control laws. That is up from 61 countries in 1999, according to the review conducted by New York-based law firm White & Case. Of these 67 countries, 51 have premerger notifications similar to the Hart-Scott-Rodino Act notice. Twenty-five countries have significantly revised their premerger notification systems within the past year. “Things are getting more complex,” said Mark Gidley, a partner in the Washington, D.C., office of White & Case. “More countries are requiring premerger notifications, and there is almost no convergence on the type of information that they want. For each country you need the schedule and the format that they want the information in.” Adding to the confusion is the lack of uniformity on such basic points as what action even starts the regulatory clock on the filing requirement. Some countries use the signing of a merger letter of intent, others the execution of a merger agreement and a few the closing of a deal. “Although few deals are actually canceled as a result of the burden of multiple reviews, they are often delayed for months, and parties can be subject to significant penalties for noncompliance,” White & Case partner Robert Paul said. “As the time and cost of these reviews mount, the economic efficiencies that make a deal worthwhile can be diluted.” Africa is expected to be the next region in which countries adopt merger regimes. Angola, Congo, Egypt, Eritrea, Ethiopia, Madagascar and Mauritius are considering new laws. The study credits creation of regional trading blocs for the burst of interest in merger control rules. Adopting merger control systems since 1999 were Argentina, Indonesia, Lithuania, Macedonia, Slovenia and Thailand. Albert Foer, president of the American Antitrust Institute, questioned whether countries just enacting competition laws should worry about mergers, noting that cartels and price fixing harm consumers much more. “A lot of people feel they are using these laws as a revenue source,” Foer said. “It has less to do with antitrust than finding a way to tax corporations for their activities.” The most common merger control is a mandatory premerger filing. That is required by 45 countries. Another five countries impose mandatory pre- and post-merger filings, and Brazil permits companies to file either a pre- or post-merger notice. Eleven countries have a voluntary filing process, and two require merging companies to register with the government. Gidley predicted the worldwide divergence in merger regulations would widen for at least another decade, with reconciliation of such differences at least 20 or 30 years off. Concerns about the gulf in premerger notification systems has been one of the driving forces behind efforts to create a global forum on competition policy. The effort, spearheaded by the International Bar Association, is bringing together leading regulators and experts to create a venue for coordinating policy. It is seen as an alternative to a European plan to stage World Trade Organization talks on competition. Involving the WTO has been a nonstarter for the U.S., which has said it does not want to create a global antitrust regulator. Foer said efforts to coordinate policy will eventually pay off. “It seem inevitable that there should be some movement toward a uniform approach, at least with respect to uniform definitions and . . . so one form could be used for multiple agencies,” Foer said. Gidley said companies have the U.S. to blame for making merger regulatory compliance more difficult. “What you are seeing is a very successful U.S. export,” he said. “The Hart-Scott-Rodino Act really started this in 1976, then the Europeans followed. Now everyone is following.” Copyright (c)2001 TDD, LLC. All rights reserved.

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