"The EU competition watchdog will decide by Dec. 20 whether to clear the deal. It can open a four-month investigation if it has serious concerns."
https://www.reuters.com/article/vmware-m-a-broadcom-eu-idTRNIKBN2S51MN
14 replies (most recent on top)
@1zit+1jI7OP9e , uh that EU 2nd probe is near 100% to happen. Four months from now happens to be right after all those refresher RSUs vest, it's obvious BCOM was shooting for that. Spring 2023 close is a pretty good estimate at the earliest.
People saying Nov/Dec this year were always delusional
Some data on regulatory timelines
https://www.dechert.com/knowledge/hot-topic/damitt--how-long-does-it-take-to-conduct-significant-u-s--antitr.html
Also from the same article in reference to the Amazon and iRobot acquisition - https://www.bizjournals.com/boston/news/2022/09/27/ftc-amazon-irobot-explained.html
How long could it take for Amazon and iRobot to comply with the FTC's request?
"It's typically a very lengthy process, up to a year," Zioze said. "We tell our clients, expect six to nine months."
What does the process to comply look like?
Companies that receive a second request are typically asked to provide documents, financial data and written or or-l responses to questions, antitrust experts say. In the Amazon-iRobot deal, the FTC is likely to look for business plans in relevant areas, information on competitors, financial projections, data protection policies, hiring outlooks and, possibly, emails of executives discussing the deal.
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"I'm sure that part of their agreement is to move expeditiously if there's any government review," Asciolla said of Amazon and iRobot.
What are the potential outcomes of the FTC's investigation?
Three options here.
Option one: The FTC could simply allow the deal to proceed.
Option two: The FTC could allow the deal to proceed, but subject to certain restrictions. Restrictions can take the form of "divestitures" or "conduct remedies." Divestitures, or when companies are asked to sell or spin off parts of their business, are not applicable in the Amazon-iRobot merger, experts noted.
Option three: The FTC could go to court to block the transaction. In such a scenario, the companies could decide to fight the FTC's decision in court or simply decide to call off the deal.
Which of the three scenarios — green light, green light with restrictions, court attempt to block the merger — is most likely?
"If you get a second request, there's a 50% to 70% chance that the transaction is going to be challenged in some way," Asciolla said.
For Zioze, the outcome would depend upon the nature of the restrictions that the FTC might request.
"If the FTC requests restrictions that are really fairly immaterial, it might be that Amazon decides to accept them in order to move forward and avoid a fight," he said. "If they're very onerous, I suspect that Amazon will not accept them."
What does this mean for other big potential mergers?
In this current environment, merger parties can certainly expect more scrutiny of their deals and potentially longer closing times, Zioze said.
From Boston Business Journal:
" What does a second request from the Federal Trade Commission mean?
A second request is an intensive and lengthy antitrust review that requires merger parties to comply with onerous requests for information and documents. Issuing a second request means that the agency is going to give the transaction a much more rigorous analysis.
How common is it for the FTC to issue such requests?
It is uncommon. There are thousands of mergers transacted in the U.S. every year. Only between 2% and 3% of them get a second request.
Under the Biden Administration, the FTC has taken a more aggressive approach to antitrust merger review, according to Zioze."
Where are all the people that said this thing would most assuredly close Spring 2023 at the EARLIEST? Seems like that prediction completely hinges on the EU at this point.
A big sc--w you to all "you know it alls", who really know nothing.
"What about FTC 2nd request? That's the main regulatory approval needed. 2nd request usually is a very bad sign and it usually blocks the deal."
Uh, no. 2nd request is a deeper look, but as for as a "very bad sign" you are not correct. Besides our people are already answering questions from the FTC, about dev, processes, market, etc...
Hoping for some regulatory agency to come in and stop this is a 1 in 1000 chance. You dont make deals worth 10s of billions of dollars without already having looked deeply at the legal landscape.
FTC second requests seem to take a much shorter time to complete than EU second requests. There is no EU second request .
The EU seems to have a better moral compass on the past bad behaviors of companies than the US.
But who the F knows. A hardware company buying a software company doesn’t immediately raise red flags.
For sure, as----e CEOs have bought and sold companies thousands of times over and the EU and FTC let it happen.
It will happen imho, just a matter of when. The the real hunger games begin!
What about FTC 2nd request? That's the main regulatory approval needed. 2nd request usually is a very bad sign and it usually blocks the deal.
Broadcom could close the acquisition, just hours after the deal won the approval from the European Commission on December 20. Layoffs could happen before Christmas if there is no phase 2 investigation.
Merry Christmas layoffs from Santa Hock?
If the EU approves by December 20th, what does that mean for close date?
Pray for EU phase 2 review.
Hoping for a phase 2 review in the EU
Which means, even if they pop up a 4 month investigation after Dec 20, that still puts us in the Apr/May 23 timeframe. Something that has been guessed at by outside parties since the announcement and lots of folks already expect.