Merger control in times of crisis

Amongst us running this blog, there are different views on whether one should write about something with a direct link to Ukraine. Because we have lately received a number of questions on how to deal with (potential) merger control proceedings in jurisdictions or with regulators in crisis, I have opted to summarize what one might be able to draw from experience and what kind of questions currently seem to come up. The post looks at an example from the recent past and, inevitably, at Russia and Ukraine.

International merger control proceedings are a challenge in itself for companies. Potentially facing proceedings in jurisdictions or with regulators in crisis adds an entirely different layer of uncertainty. This post is written from and limited to the view of a practitioner advising companies on merger control proceedings globally. Questions on how to approach these proceedings when regulators or entire countries are in crisis fortunately only come up rarely (even though I wish they would not come up, for anyone, ever).

An example from the recent past: Brazil

In mid-2019, for nearly three months the Brazilian regulator lacked the internal quorum required to take decisions in merger cases, because the government had not nominated new commissioners in time to replace their departing predecessors. This left more than 70 transactions in limbo.

At the time, companies involved in ongoing proceedings – halted for what then was an uncertain period of time – would ask themselves how do deal with the situation and how to plan for their transaction timeline. Some decided not to accept the uncertainty and to instead close their transactions without clearance in Brazil. One of them was IBM, whose acquisition of Red Hat was ultimately cleared unconditionally. However, the parties were also fined approx. EUR 12.4 million for closing the transaction prior to clearance.


The current situation in Russia has a particular angle – at least for “Western” companies. The EU, amongst others, has imposed heavy sanctions on Russia. The International Competition Network, a global network of competition regulators, has suspended Russia’s regulator from participating in the network. Many companies (and law firms) have announced that they will leave the Russian market and will close their local operations – Russia has reportedly reacted by considering introducing a law to dispossess such companies.

All of that of course does not change Russian merger control thresholds and the fact that transactions, including those involving Western companies, might require a filing in Russia. The parties to those transactions might ask themselves whether, in the current situation, there is a risk that “their” proceedings become political and the outcome thus more difficult to foresee, both on substance and timing-wise. The answer could be different for companies that continue to be active in Russia compared to companies which are about to close their local operations.


The war in Ukraine also brought up the question – very far down on any list of issues – how ongoing merger control proceedings in Ukraine would be treated, what parties who could only close a deal with clearance in Ukraine should do, and whether companies whose transactions triggered the Ukrainian merger control thresholds could and should still notify their transaction in Ukraine.

In a step that might be unprecedented, the Ukrainian regulator itself gave the answer: It announced that it would suspend the consideration of cases. Parties to ongoing merger control proceedings might then consider whether to wait for the review periods to formally expire, in which case the law foresees a tacit clearance. And parties to transactions that have not been notified but trigger the thresholds might ask whether they still need to formally apply for clearance and wait for the deadline to expire, knowing that the regulator has (at least partially) suspended its operation for the time being.

Way out

There is no easy way out for companies facing merger control in times (and jurisdictions) of crisis. The related questions are as much political as they are challenging, and the right answers are not easy to find. The answers will, in any event, be different for each company and each transaction. In most situations, there will likely be little to no precedent to look at, and at best only some experience to draw from.

[Photo by USGS on Unsplash]