Acquisition of businesses in financial difficulty as a result of COVID-19: Do buyers still need to wait for prior antitrust/competition clearance?

In the wake of the COVID-19 crisis, many companies will be facing significant financial difficulties for which the only viable solution to remain a going concern will be acquisition by another company. It is safe to predict that there will be pressures for sector consolidation through mergers of competitors. Many of these transactions will require prior merger clearance, but for some companies it may simply not be possible to stay afloat long enough to wait for merger clearance. One option in these circumstances is to seek a derogation (waiver) from the requirement to wait for merger control clearance before completing the transaction.

This briefing explains how the derogation process works and offers some key points for purchasers of distressed businesses to keep in mind when considering whether to go down this route. We focus principally on the process under the EU Merger Regulation (EUMR) but also offer some guidance on other key jurisdictions – both at EU Member State level within the EU and outside Europe.

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