A merger typically entails one company acquiring another. There is generally a legal process involved in completing a merger, during which the acquiring firm takes the initiative to persuade competition authorities that the proposed merger is harmless. Depending on the merger's size in terms of revenue, the parties involved are legally obligated to notify the competition authorities before finalizing the merger. The authorities are responsible for assessing whether the merger is anti-competitive.
Once notified, the competition authorities typically have a designated period, usually 30 days, to ascertain whether additional information is necessary. If additional information is required, the authorities will issue a request to the merging parties, who are then legally obligated to comply. After the supplemental information has been submitted, the authorities will have another 30 days to assess whether the proposed merger is anti-competitive. If the authorities conclude that the merger is indeed anti-competitive, the merging parties will be informed.
Throughout the entire process, the merging parties may present justifications for their merger, including economic analyses to demonstrate that the merger is not anti-competitive, potential efficiencies, and divestitures to address any competition-related issues. Upon being informed of any concerns regarding the competitiveness of their merger, the merging parties may engage in further discussions with the authorities to address these competitive issues.
If no resolution is reached, the competition authorities will need to litigate the proposed merger in court. Specifically, the authorities will act as the plaintiffs, while the merging parties will serve as the defendants. In most jurisdictions, the plaintiff carries the burden of proof and begins by presenting claims regarding competitive harms. The defendant then responds to these claims. Evidence for both the claims and rebuttals may include documents and testimonies.
In terms of economics, the plaintiff is required to submit their expert reports, which must encompass all relevant analyses. Additionally, the plaintiff must provide all data and codes utilized in the submitted analyses. Essentially, the defendant should have the capability to replicate the plaintiff's economic analyses. Subsequently, the defendant may present their own expert reports but is also obligated to supply all necessary materials for the plaintiff to replicate the defendant's analyses. Finally, the plaintiff may rebut the defendant's expert reports.
During the trial, all economic experts will have the opportunity to provide testimony based on their reports and any additional submitted evidence. Each party will subsequently have the opportunity to cross-examine the experts from the opposing side. Following the trial, the courts will render their decision. Typically, there are three levels of courts: lower courts, appellate courts, and supreme courts. The losing party at each level may appeal the decision to the next higher court.