Deal disputes – preparing for a more litigious environment

Wherever you are in the world, mitigating against your litigation risk to create greater deal certainty will be paramount in 2021.

In recent years, the global market has been characterised by uncertainty. This can be attributed to a range of factors, including COVID-19, an evolving geopolitical landscape and an increased willingness on the part of competition authorities to adopt an interventionist approach to merger control. These factors have in turn driven a trend towards higher volumes of deal disputes, both with authorities and between merging parties.

In 2020, the COVID-19 crisis brought with it the threat of merger litigation, including a dispute between LVMH and Tiffany & Co regarding LVMH’s efforts to obtain antitrust approvals and a dispute between EssilorLuxottica and GrandVision regarding GrandVision’s management of its business in light of the pandemic. Although many of these types of dispute settled in the latter half of 2020, they reinforced the need for companies to equip themselves with the right transaction toolkit and use integrated antitrust, litigation and corporate teams.

Furthermore, 2020 also saw a significant number of substantive agency challenges. First, in the US, Evonik defeated FTC’s attempts to block its acquisition of PeroxyChem. This was the first time the FTC had been defeated at trial since 2015. Second, in the EU, the General Court overturned the Commission’s 2016 prohibition of CK Hutchinson’s proposed merger with O2 UK. This was one of only two successful appeals of EC merger prohibitions in the last 18 years. Finally, in the UK, JD Sports successfully appealed the CMA’s phase 2 prohibition decision relating to the JD Sports/Footasylum merger (only the second time that the Competition Appeal Tribunal has remitted a merger decision back to the CMA).

In our latest episode, podcast host Jenn Mellott is joined by Linda Martin (partner and co-head of our global class and collective actions group), Dr. Martin Klusmann (partner, Düsseldorf) and Nicholas Frey (partner, London) to discuss how buyers and sellers can adopt effective strategies to identify and mitigate transaction risks, whilst remaining live to the opportunities of deal-making. They explore the factors driving the trend towards an increased volume of deal disputes and provide an overview of the practical solutions merging parties can adopt to mitigate risks later down the line.

Listen to the podcast now.

To read more about these issues and developments globally, please see the deal disputes section of our 'Global antitrust in 2021: 10 key themes' report.