Mergers : Recent French practice in the implementation of commitments and role of trustee

Workshop organized by Concurrences in partnership with Mayer Brown and Advolis.

Nathalie Jalabert-Doury

The subject of our conference is not well known to companies that have not already experienced problems with the enforcement of commitments or specific requests from competition authorities to prevent such difficulties. Four points deserve to be addressed: the anticipation of the proper execution of commitments (substitute commitments, fix it first, up front buyer), the non-execution of commitments, the modification of commitments in the course of execution, and finally the renewal of commitments.

Anticipate the proper execution of commitments

The Competition Authority prefers to give the first commitment a fair chance. The substitute commitments - the "crown jewels" - which the companies offer in the event that the first commitment cannot be implemented, therefore only come into play if the trustee has not managed to divest the assets originally planned.

Gwenaëlle Nouët

Anticipating the proper implementation of commitments means preventing potential problems, as early as the negotiation of commitments. The Authority accepts commitments only if they are such as to prevent a significant impediment to effective competition. Certain circumstances may give rise to doubts as to the proper implementation of the commitments, in particular: their realisation is conditional on the rights of third parties; doubts remain as to the viability of the divested assets; no potential purchaser has been identified during the negotiations. In such cases, the Authority may refuse the commitments, or request additional guarantees to remove these uncertainties: either substitute commitments (crown jewels) or the early realisation of the commitments (fix it first or up front buyer).

Photos © Léo-Paul Ridet.

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