Over the last two years, an important – if quiet– revolution has taken place. Expressed both through the adjustments made to the Enterprise Act 2002 and in the passage of the National Security and Investment Bill (now an Act), the UK Government has overhauled its apparatus for scrutinizing and intervening in deals on public interest grounds.
At the same time, the Competitions and Markets Authority (“CMA”) has taken a more aggressive approach to enforcement post-Brexit and demonstrated an increasing aversion to entertaining remedial solutions. The net result has been to make the task of getting some deals approved significantly more complex and challenging than before. In this article, we explore how the process of completing a transaction has become more politicized, and we outline the best practices that are emerging to navigate this new landscape.
- Deal-making now requires a holistic approach that fuses together legal expertise and established regulatory affairs practices with an integrated communications campaign mind-set. While it remains essential to manage the legal process effectively, it is equally important to understand and shape the political environment surrounding a transaction.
- Meaningful economic commitments at the outset of a deal campaign can be essential to ensure a potentially contentious deal lands well – with investors and stakeholders alike. They are not, however, sufficient for getting a transaction done. Negotiating headroom should be left to help an acquirer weather a long and often contested clearance process.
- An acquirer’s reputation going into a deal can act as an asset or a liability. A compelling investment case is no longer enough to push a transaction through: strong customer, investor, supplier and employee relationships, and those stakeholders’ willingness to advocate on an acquirer’s behalf, can make an important difference in expanding or narrowing criticism of the deal which in turn influences government’s political calculus on intervention.
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