Last week, the European Commission received a merger notification concerning the takeover of the Germany-based market research company GfK by NielsenIQ. Apart from the fact that these two companies are well known in the antitrust community for the market data they provide, one might wonder why the case makes it into our blog
(which is otherwise so hard to get on). Continue reading and you will find out.
The latest pull & refile case at the European Commission
Before filing the case last week, the parties had already submitted a filing in March 2023 but withdrew (pulled) the filing a shortly after. Back at the time, NielsenIQ said that the European Commission had asked for remedies and the parties needed more time to assess any potential remedies. According to a press release, the parties thus decided, in consultation with the European Commission, to pull the filing. This puts the case in line with earlier cases in which parties used the same strategy.
Understanding pull & refile
So, what exactly is pull & refile as a strategy in merger control proceedings? While many of our readers might be very familiar with this term, I thought that providing some very basics on this
legendary tactic might still be interesting. In the context of merger control, the term refers to a move employed by the merging parties to address regulatory concerns raised during the initial review of their merger. Instead of engaging in lengthy and uncertain negotiations, risking a long in-depth investigation, or abandoning the merger altogether, companies may choose to withdraw their merger notification and subsequently refile it, sometimes with revised terms or additional commitments.
This strategy allows merging parties to reset the clock and initiate what some call a “fresh” review process, address potential concerns the regulator might have and thus strengthen their case for approval. It can allow for a more collaborative approach between the parties and the regulator, potentially avoiding lengthy Phase II procedures.
The mechanics behind pull & refile
While the pull & refile strategy is even formalized in the US, the practice is known in many jurisdictions across the globe (but still relatively rare). The precise requirements for pull & refile may vary across jurisdictions, but the general principle is the same.
- Withdrawal of initial notification: The merging parties formally withdraw their original merger notification, signalling their intention to refile, in some cases with revised terms.
- Re-submission of the notification: After withdrawal, the parties refile their merger notification, in case they want to address concerns with either substantive changes to the proposed transaction or with additional commitments.
- Commencement of a “fresh review”: Upon re-submission, the respective antitrust authority initiates a new review process.
- Decision-making process: Following the “fresh review”, the respective antitrust authority decides whether to approve the merger, approve it with conditions, or block the transaction altogether.
Challenges and Considerations
While the pull & refile mechanism offers advantages, there are challenges and considerations to be mindful of:
- Not all jurisdictions permit or encourage the pull & refile approach. It is crucial to understand the specific rules and regulations of each jurisdiction involved in reviewing the merger to determine whether this mechanism is available.
- Pulling and refiling may attract heightened scrutiny from competition authorities. Regulators may closely examine the reasons for withdrawal and changes made in the resubmitted notification, ensuring that any revised proposal adequately addresses their concerns.
- The process of pulling and refiling can require additional time and resources from the merging parties. The assessment of regulatory concerns, revision of the transaction structure, and preparation of a new notification can demand substantial efforts and capacities.
A viable option?
Admittedly, this post did not really cover NielsenIQ/GfK. But, that case rather served as a reminder pull & refile is a strategic tool for parties navigating the complex landscape of merger control. While it offers some flexibility, pull & refile can also be viewed critically, since the usual mechanisms of a Phase II case might be circumvented. Furthermore, the process is less transparent for third parties. Also, in the EU, pre-notification discussions are an (effective) instrument that should largely prevent surprises after the filing and thus the necessity to pull & refile (and this might be the reasons that pull & refile is relatively rare in European merger control).
However, merging parties should be aware of the pull & refile option. In cases that appear more difficult from an antitrust point of view, it may therefore be worthwhile to include a pull & refile provision already in the SPA.