Authorities’ efforts have paid off, at least for initial stage reviews. For the first time since 2020, the average time to get an unconditional clearance at phase 1—by far the most likely outcome of a merger review—dropped to 21 working days across the jurisdictions surveyed.
Average review periods in phase 1 cases ending in remedies have also fallen to 74 working days, the lowest we have seen in three years.
However, in line with previous years, the length of a phase 2 investigation varies widely from jurisdiction to jurisdiction. We saw some authorities take up to or even over a year to reach a final decision, including in deals that were ultimately cleared subject to conditions.
Authorities make strides in accelerating reviews
Driven by a need to reduce the burden on both merging parties and their own case teams, antitrust authorities continued efforts to shorten review periods.
Some introduced formal rule changes to achieve this:
- In the U.K., a streamlined phase 2 process kicked in and is having an impact. In its first investigation under the new procedure, the Competition and Markets Authority (CMA) reached a provisional decision on antitrust concerns in just over 60 working days. This is 30% quicker than the average time to get to this stage in the four phase 2 cases launched last year under the old process. Further reductions are expected after a new fast-track procedure took effect on January 1, 2025. The CMA has also committed to shortening target timeframes for pre-notification and straightforward phase 1 cases by June 2025. If effective, this will shave around six weeks off a typical phase 1 review.
- In India, shorter statutory timelines now apply across the board. The phase 1 period has been reduced from 30 working to 30 calendar days and the total review period is now 150 calendar days, down from 210 (although exclusions apply where the authority requests information).
In other jurisdictions, changes in practice look set to yield results:
- The French antitrust authority initiated a “trust agreement” in mid-2024, meaning that simplified cases (which account for over 90% of French reviews) no longer require pre-notification.
- Building on the introduction of a new electronic filing system for fast-track cases, Brazil’s antitrust agency plans to use AI to accelerate the assessment further. It says some deals will be analyzed in just 24 hours.
Parties use tactics to achieve clearance at phase 1
Last year, we saw more merging parties withdrawing merger control filings during the initial review and then resubmitting later. This was a tactic used frequently in the U.S., as well as in the EU and Germany.
It can be useful if an authority has initial concerns about a deal or needs more time to test the market data submitted, but where a tight phase 1 review period does not allow it enough time to get comfortable that there are no antitrust concerns or to assess the proposed remedies.
In most cases, parties using this strategy managed to avoid an in-depth investigation.
Stop-the-clocks cause delays in the EU and China
At EU level, two of the three phase 2 decisions in 2024 (all conditional clearances) involved lengthy suspensions 93 and 114 working days. This effectively made the European Commission (EC)'s assessment twice as long as the standard statutory phase 2 period.
In China, the “stop-the-clock” mechanism, introduced in 2022 to inject greater flexibility and remove the need for parties to refile their transaction if the State Administration for Market Regulation (SAMR) was unable to complete its assessment by the statutory deadline, does not appear to be shortening review periods.
The review of JX Advanced Metals/Tatsuta was paused for nearly 11 months before SAMR granted conditional clearance. This is nearly double the longest stop-the-clock period from 2023 and means that the full assessment was nearly three times the statutory 180-day deadline.
But it is worth bearing in mind that these lengthy reviews are reserved for complex cases raising antitrust concerns.
In the EU, 88% of all 2024 decisions fell under the simplified procedure, where clearance is typically issued in around 16 working days. In China, 98% of simplified procedure cases were cleared at phase 1 in an average of 11 working days. This is in line with SAMR’s internal goal, introduced in early 2024, to accept simplified notifications within 20 days and grant clearance in a further 20.
U.S. reviews impact deal timetables at both ends
The revamped Hart-Scott-Rodino (HSR) filing form, that applies from February 10, 2025, increases the information load on merging parties (see Merger control frustrates more M&A, but are the tides turning?). More time will therefore need to be factored in before the formal waiting period can even start.
The U.S. antitrust agencies estimate an additional 68 hours (on average) per filing. This likely significantly underestimates the extra burden, especially for transactions involving overlapping products or services. We do not anticipate a significant reversal of this burden under the new administration. Hopefully, however, this time can be partially offset for many transactions by the long-awaited reinstatement of “early termination,” which in theory will allow some parties to close their deals earlier than the standard 30-day waiting period.
The U.S. agencies’ continued willingness to challenge M&A in 2024 meant that where transactions were likely to raise antitrust concerns, parties had to account for possible protracted litigation when setting deal deadlines.
Even careful planning may not be enough, and the time required to go the distance in court could prove incompatible with the parties’ contractual obligations. When Tapestry and Capri walked away from their tie-up after a federal district court ruling against them, they cited the uncertain ultimate outcome of the U.S. legal process and the fact that it was unlikely to be resolved by the long-stop date.
Outside the U.S., we also saw parties forced to extend long-stop dates to account for merger review periods. Regulatory uncertainty played into average long-stops increasing from six to seven months in 2024, based on our analysis of private M&A deals1.
Expect more of the same in 2025
Limited authority resources and a desire to cut administrative burden to encourage investment will likely continue the trend towards shorter merger review periods in the coming year, at least for no-issues cases. Speeding up enforcement is, for example, part of EC Competition Commissioner Ribera’s mandate. The CMA leadership (urged by the U.K. government) has committed to make investigations and processes “as simple and rapid as possible” and to “minimize the end-to-end length” of merger reviews.
Whether this results in significant timing improvements for more complex in-depth investigations remains to be seen. But with document submissions running into the millions, increasingly complex theories of harm being applied and the negotiation of intricate remedy packages often all in play in such cases, merging parties should expect continued unpredictability and plan deal timelines accordingly.
Footnotes
1. Global trends in private M&A—research based on 2000 M&A deals on which A&O Shearman has acted (including legacy Shearman deals signed since January 1, 2024). Please get in touch with your usual A&O Shearman contact if you would like to learn more about the results.
