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Antitrust regulators are expected to release an accord with the European Commission as early as this week that could make it easier to secure approval for cross-border mergers. The pact would permit merging companies to opt for a joint meeting with the U.S. antitrust agency and the European Commission at the start of the deal review process. If the parties are willing to commit to the timely production of documents and witnesses, the regulators would coordinate their investigations. That would include issuing rulings simultaneously, a source familiar with the agreement said. The accord also calls for high-level officials in the United States and Europe to meet early in reviewing a merger to discuss the case. Currently, lower-level staff meet on cross-border mergers, with top officials staying out of the process until the investigation is nearly complete. U.S. and EC officials have said for nearly a year that they want to strike an agreement enhancing coordination on cross-border deals. Philip Lowe, the EC’s top antitrust staffer, told Dow Jones in Italy last weekend that regulators were close to completing the accord. Sources in the U.S. confirmed that the antitrust division and Federal Trade Commission were on board and said the three agencies could unveil the agreement this week. Most of the details were hammered out in July when staff from the U.S. antitrust agencies and the EC met as part of their regular bilateral exchanges. Despite the cooperation, U.S. and European regulators have reserved their right to make separate judgments on whether a merger is anticompetitive. The idea to coordinate the timing of the review stems from the failed General Electric Co.-Honeywell International Inc. merger. In that 2001 deal, the U.S. required only a small divestiture. But European regulators continued to investigate for several more months before deciding to stop the merger. The long delay between the two rulings is believed to have escalated the controversy over Europe’s decision to block a merger of U.S. companies that the Justice Department had approved. Antitrust lawyers said the transatlantic alliance would be helpful, though it is not a cure-all for the troubles plaguing large, multinational mergers. “This is something to be much anticipated,” said Steven Newborn, a partner at law firm Clifford Chance in Washington, D.C. “Both jurisdictions will have the benefit of the knowledge gained right up to the rulings.” Newborn said in some instances the closer coordination could result in the companies divesting fewer assets to satisfy regulators. Often U.S. regulators will order divestiture of one set of assets, the Europeans a different set. By collaborating, merging companies might be able to negotiate a single divestiture package that includes fewer assets but satisfies both sides, he said. Richard Parker, a partner at O’Melveny & Myers in Washington, D.C., said closer antitrust coordination is a worthy goal, though tough to achieve in practice. “It is hard for an agency to know how long an investigation will take because you don’t know when you will get access to documents and witnesses,” he said. “There are too many moving parts to make it work every time.” The next step is for the agencies to harmonize their procedures, said Phillip Proger, a partner at Jones, Day, Reavis & Pogue in Washington, D.C. For instance, U.S. law requires American regulatory agencies to go to court to block a deal, while the Commission has greater power to block a transaction without fear that a judge will overturn the decision. “This is a necessary first step and should be viewed as such,” Proger said. Copyright �2002 TDD, LLC. All rights reserved.

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