From the outset, it is important to list those countries with which the merging parties or the transaction has a connection. An initial list necessarily has to be over-inclusive and therefore places a significant burden of information gathering on the parties to the transaction. The list is largely based on where the parties to the transaction generate their turnover, since most merger control regimes apply jurisdictional turnover thresholds. The following material should always be considered to establish this:

This information is important, as some jurisdictions operate with thresholds based on asset values, market shares or local presence (such as a subsidiary, branch or other significant presence).

However, formal documents, such as accounts and securities filings, do not always shed much light on the question of where merger filings will be required. Therefore the due diligence process should not be overlooked as an early source of extra data to assess where merger filings are necessary. There is often a conflict between economising on due diligence to save costs or time or to avoid antagonising the seller, and using the process to obtain data relevant for anti-trust purposes. However, the due diligence process may well be an early avenue to obtain valuable information to assess where merger filings are necessary.

Strategic plans, market reports and recent merger filings or other submissions may contain valuable insights into the likely substantive issues. However, they may also help to identify jurisdictions. For example, if a previous acquisition has been filed in a particular jurisdiction, it may be unwise not to do so in a subsequent transaction, even if there are strong arguments against this.

Information may also be available from these sources on a company's customer base, its competitors, and how it sees the marketplace. This can be particularly relevant in assessing the need to file in a jurisdiction which has a market share test as one of its jurisdictional thresholds. Such a threshold poses uncertainty not only for merging parties, but also for the merger control authority which has to apply it. In the absence of any past practice, precedent or familiarity with the sector, the authority will not be in a good position to come, itself, to a definitive view itself on how the markets should be defined for the purposes of judging whether jurisdiction exists. This is why best practice avoids creating jurisdictional thresholds based on market definition. However, where such thresholds exist, parties have more discretion on filing than is immediately apparent, as the regulator may be as much in the dark as the parties about the appropriate market definition or market shares, and have no basis to insist on a filing.

There are numerous types and combinations of thresholds globally, and new varieties are added to this list as and when they appear. The information gathered is relevant not only to whether a filing is required but also relevant to risk assessment, whether a short-form notification, simplified decision process or fast-track procedure can be used, and to prioritising filing requirements.

When identifying applicable merger regimes, it is important to note that in some countries, "foreign-to-foreign transactions" may be either exempted from notification, or subject to special administrative procedures, even if jurisdictional thresholds are met. This may apply, for example, where the transaction does not give rise to a direct change in control of a local company, or where the transaction does not affect the competitive structure of the national market concerned.

It should also be borne in mind that national competition authorities (NCAs) are reluctant to impose conditions on such transactions even where there are no exemptions or special administrative procedures. They may also lack power to do so. In many legal systems, it is a convention of legislative interpretation that laws do not have extra-territorial effect unless explicitly stated to do so. Even where the power exists, it is usually not practicable to exercise it, and intervention is confined to the most feasible territorial remedy. A recent example concerns the acceptance of behavioural undertakings by the UK Competition Commission, where the merging parties' only link with the UK was sales through independent distributors (Drager Medical/Air-Shields). However, in the EU, a member state can make a reference to the European Commission (Commission) so that the Commission can apply broader remedies than the member state's NCA. This flexibility allows "the best-placed authority" to handle a merger, which comes particularly into play when there are substantive issues which may require remedies.

Transactions with particular characteristics or which take place in particular sectors may be subject to specific considerations. For example:

At the end of the merger review analysis, legal advisers will usually be able to draw up a list identifying those jurisdictions where the parties meet the relevant thresholds for notification. This list must identify whether:

The vast majority of jurisdictions now apply a mandatory regime and in these cases particular attention should be given to the risk of sanctions for failure to notify. Most mandatory jurisdictions impose fines on the companies. Others also provide for a declaration of unenforceability or, as in the EU, make the validity of a deal dependent on a clearance decision. Some even impose criminal penalties on the directors of the companies for failure to notify.

Although filings in voluntary regimes are not required, it is often advisable for the parties to notify when the transaction gives rise to issues of such significance within the jurisdiction that it is likely to come to the attention of the relevant competition authority in any event. In those cases, it may be preferable to take the initiative and submit a notification (for example, in the UK the timetable for the Office of Fair Trading (OFT) to conclude an initial examination does not start to run until the OFT becomes aware of the material facts about a merger or they are made public).

Companies can be concerned at seeing the list of potentially applicable merger control regimes the first time they encounter a cross-border merger review. However, they soon realise that the list may have little to do with where they have their main activities and possibly even less to do with where there are any significant overlaps between the parties' activities. A significant problem is that a large number of countries still operate thresholds and filing requirements that are not designed to determine whether a particular transaction is likely to have, or is even capable of having, an effect on the local market. Notorious in this respect are countries such as Austria (although in 2006 the domestic turnover threshold was doubled to EUR30 million (about US$42.8 million)) and Germany, where one company alone can satisfy the threshold and a notification requirement is theoretically triggered by minimal sales in Germany or Austria by the other party. For example, in Germany, a notification is required where the:

This criticism could also be made of Brazil, but recent clarifications to Brazilian merger control law have improved the link between the notification requirement and transaction's effect in the jurisdiction.

It is extremely burdensome for the companies subject to merger review to have to go through the trouble of notifying transactions that clearly do not give rise to any substantive issues in multiple jurisdictions. It is equally burdensome for the competition authorities, which have to spend the time and resources to review and clear transactions that do not (or cannot) raise any significant anti-trust concerns. However, companies are obliged to notify, and in most jurisdictions, await clearance, even where it seems illogical and unnecessary to do so. In these jurisdictions, the key objective should be to minimise the impact on the timing of the deal and explore any short-form filing possibilities, thereby reducing the resources spent on the notification. The Commission has shown the way in its recent reforms. It is to be hoped that it and the ICN encourage countries to:

Substantial administrative fees can also be charged for a merger filing. For example:

The first priority is to examine whether the transaction gives rise to any substantive issues in any of the jurisdictions where a notification is required. This, of course, has a direct impact on the transaction itself, since the parties must know whether the transaction can be completed at all or if any remedies are likely to be imposed. For both the seller and the buyer, it is important to resolve issues relating to remedies before the agreement is signed. For the seller, it may be necessary to ensure that the buyer is obliged to offer a certain level of divestments (so that the transaction is not ultimately prohibited). The buyer must consider carefully whether it wishes to go ahead with the transaction at all if certain key assets might have to be divested in order to obtain competition clearance. Some regimes do not permit divestments or undertakings to be negotiated in an initial inquiry. Where this is the case, solutions modifying the structure of the deal must be explored if the substantial delay of an in-depth inquiry is to be avoided. Oligopolistic dominance (co-ordinated effects) may pose a particular problem since effective remedies may be beyond the parties' reach and a prohibition may be very difficult to avoid.

Companies are usually eager to complete a transaction and, therefore, one of the first issues to resolve is the time frame within which it will be possible to get the necessary clearances. In this respect, consideration must be given to whether the individual jurisdiction imposes a standstill obligation or whether the parties can complete the transaction before receiving clearance, as is the case, for example, in Brazil, Italy and the UK. Where completion must await clearance, companies should remember that exceptions may be available from the standstill obligation if the deal involves the rescue of a failing firm or an urgent refinancing. Whereas many jurisdictions operate with a review period in the first phase of approximately one month (and usually parties can expect to get a decision within that period), some jurisdictions operate with substantially longer periods or habitually fail to meet stated deadlines.

Companies must avoid "jumping the gun". Waiting periods commonly prevent the merging companies from implementing their merger lawfully unless relevant merger clearances or approvals have been granted. This should be drawn to the attention of the parties' managements, since there can be significant sanctions.

Companies without approval must also continue to behave as independent competitors until their merger is a certainty. Precautions need to be taken to ensure that competitively sensitive commercial and financial information is not exchanged prior to the merger becoming unconditional. Procedures can, for example, be put in place readily to ring-fence members of the merger planning team to allow information to be shared where this is necessary to:

The US Department of Justice's clearance of Whirlpool/MyTag (Press release, US Department of Justice, Antitrust Division Statement on the Closing of its Investigation of Whirlpool's Acquisition of Maytag, 29 March 2006, available at www.usdoj.gov/atr/public/press_releases/2006/215326.htm) and the Commission's greater focus on efficiencies (at least in the Form CO merger notification filing) may both lead management and advisers down a path where they need to tread warily in their exchanges of information if they are not to risk sanctions for breaching cartel laws, as well as the usual penalties for jumping the gun.

External appearances are also important. The sight of merging parties adopting a common front to suppliers and customers before their merger has achieved all the requisite clearances gives plenty of scope for mischief-making by third parties aiming to derail it. Indeed, over the past decade, the US enforcement agencies have brought six cases against companies who have jumped the gun on their mergers by engaging in excessive co-ordination before merging. This resulted, in one case, in a penalty on one company of over US$5.5 million (about EUR3.8 million).

A different timing problem can arise from the deadline for a notification to be submitted. Generally, most merger control regimes do not apply strict deadlines. This is because the respective parties cannot usually complete the transaction before receiving clearance in any event, and therefore have an incentive to notify as early as possible to start the review process. However, in some countries strict deadlines do apply and failure to comply may be sanctioned by fines. The most notorious example is Brazil, where a notification must be made within 15 business days of signing "a binding agreement". To further complicate matters, letters of intent have, in some cases, been considered binding agreements by the Brazilian competition authority (letters of intent are often signed very early in the transaction process (often before a competition lawyer is involved) to cover issues such as confidentiality and deal exclusivity (that is, that the seller will not negotiate with other purchasers)). It is important to be aware of what triggers such a deadline and examine the early documents signed by the parties.

The Commission sensibly abandoned formal notification deadlines in its 2004 reforms (they had long been abandoned in practice) and also permits filings based on a good faith intention to proceed with a merger. This widens the time frame within which merger review can be started and means that parties can now engage with the US and EC authorities along the same time frame.

Since the available resources within a company are frequently limited or devoted to other aspects of the merger (and business), it may be necessary to prioritise the order in which the notifications are prepared and filed. Prioritisation can be based on the significance of the competition issues in a particular jurisdiction or on the importance of that particular country in terms of the businesses of each company involved (for example, government supply, licensed utility, or ownership of national brands). In practice, if one merger control review can be expected to take longer than all the others, it may be sensible to focus first on that particular notification. However, this can lead to apparently arbitrary results in terms of which jurisdiction is considered the main priority and priority should generally be given to the jurisdiction where competition issues arise, assuming always that the information is available to enable priorities to be identified early (see above, Substantive issues). The timing of notifications may be crucial (for example, in the exceptional case of near simultaneous mergers (see box, Near simultaneous mergers).

It is often difficult to obtain data early enough to be able to take a definitive view on merger filings. Yet the issue may not simply be one affecting the merger implementation process. In a competitive bid process, a clean bid, without regulatory conditions or the need to await clearance, may be preferred even if it is at a somewhat lower indicative price. The objective may be a quick sale or the business for sale may need an urgent injection of finance which the vendor is unwilling to make. The disposal may even be a "fire sale" to meet regulatory requirements where the regulator rules out bidders, which have to go through a merger clearance process.

The next step in the process is to prepare the notifications. The first thing that must be done is to send information requests to the relevant management within the merging companies. It is often practical to split the information requests into a general part, to be dealt with centrally, and a country-specific part, to be dealt with in each of the individual jurisdictions. In this way, an appropriate balance is struck between managing resources and ensuring efficiency on one side, and having the best-placed individuals answering the questions on the other.

Although there are differences between the various notification forms (and the information required from jurisdictions that do not require a specific form to be completed), a general range of questions is included in most forms outside the US. For these, it is advisable to create a master document which contains the following items:

Such a master document enables both the lawyer and the client to review, comment and approve the draft once and for all. Based on the master document, it should then be straightforward to adopt the general sections to the individual jurisdictions and add any necessary information on local activities of the parties. The description of the specific conditions in each jurisdiction must of course be adapted to the local conditions of competition, but those descriptions can frequently also be adapted from a master document.

Of course, features and issues unique or specific to a jurisdiction must be addressed individually but following the systematic, prioritised approach above should minimise the burdens of this.

Where a transaction gives rise to substantive competition issues it is crucial that information is obtained at the earliest possible stage to assess the extent of the problem and to decide on the best strategy for resolving it. For example, if the competition concerns are confined to particular markets or products it may be possible to identify clear remedies which do not undermine the objectives or value behind the deal.

The parties must assess whether the concerns are limited to jurisdictions where remedies can be offered in a first stage inquiry. This helps prevent parties from facing an in-depth inquiry with all the delay that means simply to put into effect a solution they are ready to offer at the outset.

Whether this is possible depends on the regime concerned and the practice of the regulatory authority. Phase I remedies are a regular feature of the Commission's practice but are not available under German merger control. They have just been introduced in Spain but have long been available in the UK merger control regime, although both practitioners and the OFT seem to have encountered difficulties with their use in practice.

The ability to transfer cases within the European Competition Network (ECN), before and after filing, does provide additional scope to isolate and remedy competition concerns in the EU (see above). Where the concern is confined to a national market it may even be possible to have that market referred to the member state concerned and, depending on the national standstill law, to go ahead with the remainder of the deal, based on a Phase I clearance from the Commission.

Once all necessary clearances have been obtained, the parties can proceed to complete the transaction. At this stage, only a few formal requirements need to be addressed before the merger control issues are finalised. In some jurisdictions, such as Germany, the authority requires a simple letter or notification from the parties informing the authority of the fact that the transaction has been completed, which basically confirms that the parties have adhered to the standstill obligation.

Finally, it should be borne in mind that although in many cases independence has been granted to national competition authorities, politics may still be a factor in merger control (see box, Politics and merger control).