How to Succesfully Navigate the EC Purchaser Approval Process

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When a company intends to purchase a divestment business arising from commitments attached to a European Commission (EC) conditional merger clearance decision, it is not always aware that it will need to go through an extensive purchaser approval process, which is a complex, intense and fast- paced process throughout. This short briefing gives an overview of some of the challenges remedy buyers might need to overcome and provides guidance based on experience in recent cases to ensure a smooth purchaser approval. Purchaser approval process timeline and milestones
Under the EC’s Remedy Notice, the EC will normally consider a period of six months from the moment of its conditional clearance decision as appropriate for the seller to find a suitable purchaser to avoid that the divestment business would be exposed to an extended period of uncertainty. In order to respect this strict timing, seller or its investment bankers in case of a bidding process will in practice already start sending out teasers or an Information Memorandum to interested remedy buyers a few weeks before the expected EC decision.

When the parties come near to a final agreement, seller and trustee will send their first preliminary requests for information (in most cases the first in a long row) to the remedy buyer. This will enable the seller to start preparing its reasoned purchaser proposal and the trustee his reasoned opinion, which need to be submitted to the EC within respectively one week and two weeks after signature of the final agreement. The aim of these two submissions is to demonstrate to the satisfaction of the EC that the proposed purchaser meets the purchaser requirements and that the business will be divested in a manner consistent with the EC’s decision and the commitments.

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