Should M & A Clients Review Anti-Trust Implications as Part of their Due-Diligence?

Does failing to review anti-trust risk enormous penalties for being anti-competitive?

M&A professionals need to take anti-trust considerations into their due diligence planning. As international manufacturing relationships continue to increase in the U.S., there is an ever-growing number of international authorities and nations ready and willing to contest your agreement.

Companies considering M&A are more than ever at risk for failure to comply with anti-competition requirements. The best defense starts with work done during the initial due diligence phase, as those documents will frequently be part of the file requested by competition authorities. Deal size impacted varies by area and importance of the target company.

Even Apple has had a “bite” taken by federal regulators on anti-trust grounds. The L.A. Times reported on August 2 that an anti-trust monitor may be appointed to review Apple’s e-book sales practices to ensure fairness. VIEW ARTICLE

When structuring transactions, M&A professionals need to be aware that as the number of authorities able to contest transactions on anti-competitive grounds increases, so do the number of challenges.  Failure to request approval, when required, can result in fines and/or reversal or modification of the proposed transaction.  These can result in unforeseen delays and huge costs.

A buyer today faces the possibility that any one of more than 90 authorities worldwide may challenge their merger. With international manufacturing growing in importance to U.S. companies, even China is now reaching out to contest mergers on anti-competition concerns.

A recent article in International Financial Law Review concerning Anti-Trust may be of interest. VIEW ARTICLE

These underscore the risk and importance of considering anti-trust concerns where an M & A transaction is under consideration.

[author] [author_image timthumb=’on’]http://www.dallasclicker.com/include-mt/img-resize.asp?path=/photos/Joe_Brophy__photo.jpg[/author_image] [author_info]Joseph D. Brophy, MBA, CPA, ABV, CVA, CM&AA, has experience as a CPA advisor to clients buying and selling companies, and as a business owner himself. Mr. Brophy holds BBA and MBA degrees from the University of North Texas. He has also served as an officer in both public and private companies before establishing Joseph D. Brophy, CPA, P.C. in Dallas in 1985 to concentrate on tax issues and business advisory services. His CPA office is on Turtle Creek Boulevard in the Oak Lawn neighborhood of Dallas. Joe can be reached at jdbrophy@jdbrophycpa.com.[/author_info] [/author]