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Merger Working Group Workshop

International Competition Network. Merger Working Group Workshop. March 10-11, 2009 – Taipei, Taiwan. Introduction to Merger Investigation and Investigative Planning. International Competition Network. Introduction. Planning the Investigation Focusing the Investigation

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Merger Working Group Workshop

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  1. International Competition Network Merger Working Group Workshop March 10-11, 2009 – Taipei, Taiwan Introduction to Merger Investigation and Investigative Planning

  2. International Competition Network Introduction • Planning the Investigation • Focusing the Investigation • Managing the Investigation and Evidence • Timing: Keep an Eye on the Clock Resource Materials ICN Investigative Techniques Handbook

  3. International Competition Network Planning the Investigation • Why make it simple when it can be complicated? • Does it really have to be that complicated? NO

  4. International Competition Network Planning the Investigation • Planning Based on Level of Scrutiny Needed: • If no competitive concerns, no formal plan needed • Quick review of notification filing or public data may be sufficient • Goal is to clear transaction quickly • Initial Stages of an Investigation • Main goal is to determine quickly whether to conduct in-depth review • Often there is some competitive overlap • Initial plan may be simple and even expressed orally • Focus on discrete tasks such as specific interviews and document requests that can be completed in limited time period

  5. International Competition Network Planning the Investigation • How to Develop an In-depth Investigation Plan • Plan is cooperatively developed by team and may include a brainstorming session to identify: • likely areas of concern; • critical issues and possible theories of harm; • facts needed to resolve critical issues; • possible sources of information. • Team considers time constraints; • Team considers resources needed; and • Team develops a written plan.

  6. International Competition Network Planning the Investigation • An Investigation Plan covers three primary areas: • Candidate Theories of Harm • Plan may include: the reason for the investigation; main issues to be investigated; possible remedies • Sources of Evidence • Plan may cover: the types of information needed; likely sources of information; method to gather information • Timing and Administrative Tasks • Plan should include: an overall timing plan; case agenda schedule; various administrative tasks

  7. International Competition Network Planning the Investigation • Candidate Theories of Harm • Brief Description of Transaction • Fantasy Beverage, the largest bottled water company, proposes to acquire Just Energy Inc., the leading energy drink company • Reason to Investigate • Merger would combine #1 and #2 sellers of energy drinks • Working Theory of Harm • Merged firm could maintain higher prices for energy drinks if it dominates a well-defined market for energy drinks, with an 80% market share and if price increases would not be defeated by expansion or entry into that market • Key Factual Issues to Resolve • Product Market • Expansion/Entry

  8. International Competition Network Planning the Investigation • Sources of Evidence • Type of Information • E.g. price and quantity data • Sources • Merging Parties • Competitors • Customers • Methods to Gather Information • Interviews • Written requests for information or document production • Voluntary or compulsory

  9. International Competition Network Planning the Investigation:Investigation Agenda

  10. International Competition Network Keeping the Investigation Focused • Planning is continuous • Develop and prioritize candidate theories • Identify potential issues, pursue those most likely to reveal effects • Discuss theories of competitive harm • Expose arguments to critical analysis from merging parties and third parties • Test with evidence, reevaluate and revise • Test theories with facts, revise theories according to facts • Focus the Facts • Prioritize and narrow the search for relevant information • The critical and possibly disputed facts become narrower as the matter progresses

  11. International Competition Network Managing the Investigation and Evidence • Organize the Information • Develop a document that organizes case information (by product or by issue) • Consider how technology may help you be more efficient • Maintain Communications • Dialogue with Merging Parties – regular opportunity to discuss progress • Dialogue with Third Parties – can provide crucial fact information and perspectives on merger • Keep decision makers informed

  12. International Competition Network Timing: Keep an Eye on the Clock • Investigation team should use the initial phase to frame issues for inquiry and quickly identify issues that are not of concern. • In an in-depth review, the investigation team may confront timing issues in three contexts: • Statutory Periods • Internal Timetables • Timing Agreements • Managing an investigation within time limits is a challenge

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