Antitrust authorities maintained their appetite to intervene in 2018, with 29 transactions with a value of over EUR46.3 billion prohibited or abandoned due to antitrust concerns, the Allen & Overy global trends in merger control enforcement report reveals. Of these deals, 7 mergers were prohibited and 22 abandoned as a result of antitrust concerns.

Unflinching and robust

The report analyses 26 jurisdictions globally and reveals a record number of merger notifications in 2018 as global M&A volumes soared in the first half of the year. Antonio Bavasso, global co-head of antitrust at A&O comments ‘against rising political concerns about levels of concentration in some industries, antitrust authorities have responded strongly to the global appetite for strategic deals which bring about further industry consolidation. They have been unflinching in their merger control scrutiny and robust in their measures for those that do not comply with the rules.’ He adds, ‘as we look to 2019, we expect to hear more from voices calling for reforms in political circles, fuelled by geo-political considerations and continued vigour in enforcement. Throw into the mix the personnel changes at the helm of DG Comp in Brussels and we are set for a fascinating year.’

Remedies

Antitrust authorities cleared 139 transactions subject to remedies, down from 155 in 2017, but put emphasis on getting the ‘right’ package. The U.S. saw a drop in remedies cases, from 23 to 17 which stands out after remaining steady year-on-year, something that the reports ties to an overall trend of decreased enforcement by US antitrust agencies. China saw a similar drop and the UK’s CMA only cleared three cases with remedies at phase 1, a big drop on 2017 in which it saw 13. However, the report notes that when combined with an uptick in referrals to in-depth investigation, it could suggest a more interventionist approach. Throughout 2018, behavioural remedies have been increasingly characterised as a sign of regulatory failure and authorities pledged to focus on structural divestments instead. However, the report reveals that data belies this, with 48% of all remedies cases in 2018 involving a behavioural element, either on its own or with divestments, only slightly down on 53% in 2017.

Record fines

The Industrial & Manufacturing, Energy and Transport sectors experienced a higher share of antitrust intervention when compared to global M&A activity in 2018. In the EU and U.S. almost half of all remedies cases in these regions fell within the Industrial and Manufacturing sector. By contrast, the rate of intervention in the digital and TMT sector is below the level of general M&A activity.  Antitrust authorities continued to break records when imposing fines for breaches of procedural merger rules, such as gun-jumping or providing incorrect information, in 2018. Fines of over EUR148 million were imposed across the globe in 46 separate cases, up 30 per cent from the number of cases in 2017.