What is antitrust review in M&A?

  • Posted by: Frédérique Pardon

An antitrust review in M&A is a regulatory process in which government authorities assess whether a proposed merger or acquisition would harm competition in a given market. If a deal would give the combined company too much market power, regulators can block it, approve it with conditions, or require structural changes before it closes. Any company planning a significant acquisition needs to understand how this process works, what triggers it, and how long it takes.

Which deals trigger an antitrust review?

A deal triggers an antitrust review when it meets specific size or market-share thresholds set by regulators. These thresholds vary by jurisdiction, but they generally focus on the combined revenue or assets of the parties involved, and whether the transaction could meaningfully reduce competition in a defined market.

In the United States, the Hart-Scott-Rodino (HSR) Act requires companies to notify the Federal Trade Commission (FTC) and the Department of Justice (DOJ) before closing deals that exceed certain financial thresholds, which are adjusted annually for inflation. In the European Union, the EU Merger Regulation applies when the combined worldwide turnover and EU-wide turnover of the parties cross specified limits.

Even deals that fall below formal thresholds can attract scrutiny. Regulators in multiple jurisdictions have shown increasing willingness to investigate acquisitions that appear small by revenue but carry strategic significance, particularly in technology and healthcare. The key factors that typically prompt a review include:

  • High combined market share in a specific product or geographic market
  • Elimination of a close or direct competitor
  • Acquisition of a company with significant competitive potential, even if currently small
  • Transactions in industries already under regulatory focus

How does the antitrust review process actually work?

The antitrust review process works in two stages. First, parties file a mandatory notification with the relevant authority. Regulators then conduct an initial review, typically within 30 days, to decide whether the deal raises competition concerns serious enough to warrant deeper investigation. If not, the deal is cleared. If concerns exist, it moves to a second, more intensive phase.

During the second phase, regulators request detailed information from the merging parties, their competitors, customers, and suppliers. They analyze market structure, pricing dynamics, barriers to entry, and the likely post-merger behavior of the combined entity. This phase can last several months and often requires companies to respond to extensive information requests.

Throughout both phases, the merging parties can engage directly with regulators to address concerns, propose remedies, or provide additional evidence that the deal is pro-competitive. Experienced legal and financial advisory experts play a critical role here, helping companies frame their arguments clearly and respond to regulators’ questions efficiently.

What do regulators look for when reviewing a merger?

Regulators look for evidence that a merger would substantially lessen competition. Their core concern is whether the combined company would gain enough market power to raise prices, reduce output, limit innovation, or otherwise harm consumers. They assess this by analyzing the competitive landscape before and after the proposed transaction.

The main factors regulators examine include:

  • Market concentration: How many competitors exist, and what share does the combined entity control?
  • Barriers to entry: How easy is it for new competitors to enter the market if prices rise?
  • Buyer power: Do customers have enough leverage to counterbalance any increase in the seller’s market power?
  • Efficiencies: Does the deal generate cost savings or innovations that benefit consumers enough to outweigh competitive harm?
  • Closeness of competition: Are the two companies each other’s primary competitors, or do they operate in adjacent segments?

Regulators also consider dynamic factors, such as whether a target company is a potential future disruptor whose acquisition would remove a competitive threat before it fully materializes. This type of analysis has become more common in technology and pharmaceutical M&A.

What happens if regulators raise concerns about a deal?

If regulators raise concerns, the deal does not automatically collapse. Companies typically have three options: negotiate remedies with the regulator, restructure the transaction to remove the problematic elements, or abandon the deal entirely. Most contested transactions are resolved through negotiated remedies rather than outright prohibition.

Remedies generally fall into two categories:

  • Structural remedies: The merging parties divest specific business units, product lines, or assets to restore competition. This is the most common outcome in contested deals.
  • Behavioral remedies: The parties commit to specific conduct, such as licensing technology to competitors, maintaining access for third parties, or keeping certain operations separate. Regulators often prefer structural remedies because behavioral ones are harder to enforce over time.

If the parties and regulators cannot reach agreement, regulators can formally block the transaction. In the EU, this requires a Commission decision. In the US, the DOJ or FTC can seek a court injunction to prevent the deal from closing. Outright blocks are relatively rare but have become more frequent in recent years, particularly in large technology-sector deals.

How long does antitrust review take in M&A transactions?

Antitrust review typically takes between one and six months, depending on the complexity of the deal and whether it progresses to a second-phase investigation. Simple transactions in unconcentrated markets are often cleared within 30 days. Complex deals involving market leaders or sensitive industries can take six months or longer, and some high-profile cases have extended well beyond a year.

The timeline is also affected by how many jurisdictions require notification. Large cross-border transactions often need approval from multiple regulators simultaneously, including the EU, the US, the UK, China, and others. Coordinating these parallel processes adds complexity and can extend the overall timeline significantly.

For deal-planning purposes, companies should build realistic regulatory timelines into their transaction schedules from the start. Underestimating review periods is one of the most common causes of deal disruption, particularly in transactions where the parties have already made operational or financial commitments contingent on closing.

What’s the difference between US and EU antitrust review in M&A?

The key difference between US and EU antitrust review is structural. In the EU, the European Commission acts as a single authority with jurisdiction over transactions that meet EU-level thresholds, providing a one-stop shop for pan-European deals. In the US, responsibility is split between two agencies, the FTC and the DOJ, and jurisdiction is allocated between them based on industry.

Beyond structure, the two systems differ in approach and emphasis:

  • Substantive standard: The EU applies a “significant impediment to effective competition” test. The US focuses on whether a deal “substantially lessens competition.” In practice, both systems ask similar questions, but EU regulators have historically been more willing to challenge deals on broader market-structure grounds.
  • Remedies preference: EU regulators have shown a strong preference for structural remedies (divestitures) over behavioral commitments. US agencies also favor structural remedies but have used behavioral conditions in certain regulated industries.
  • Timeline: The EU process has fixed statutory deadlines, which creates predictability. The US process is more flexible, and second-phase investigations can extend significantly if the agency issues a “second request” for additional information.
  • Multi-jurisdiction complexity: Large international deals must often satisfy both regulators simultaneously, and the two authorities do not always reach the same conclusions, which can create difficult negotiating dynamics for deal teams.

Understanding both systems is essential for any company pursuing cross-border M&A, as misaligning strategy between jurisdictions can delay or derail a transaction.

How we support you through M&A regulatory complexity

Navigating antitrust review is one of the most demanding parts of any M&A transaction, and it requires more than legal advice. It requires financial clarity, rigorous preparation, and a clear view of whether the deal should proceed in the first place.

At Greyt, we approach M&A from a CFO perspective. That means we help you build the financial foundation that supports every stage of the process, including regulatory review. Specifically, we can help you:

  • Assess deal readiness through our Finance Maturity Assessment before you enter any regulatory process
  • Build and stress-test the investment thesis so your strategic rationale is clear and defensible
  • Conduct financial due diligence for M&A transactions that surfaces risks early, before regulators do
  • Model the financial impact of potential remedies, such as divestitures, so you can negotiate from a position of clarity
  • Support post-deal integration to ensure the transaction delivers the value it promised

Our team of senior financial professionals can be deployed flexibly, from a few days of focused support to full embedded advisory throughout a transaction. If you are preparing for an acquisition or working through a complex deal, we would be glad to help you think it through. Get in touch with us to discuss your situation.

Frequently Asked Questions

How early in the M&A process should we start planning for antitrust review?

Antitrust planning should begin at the deal-origination stage, well before any formal offer is made. Conducting a preliminary competition analysis during initial target screening helps you identify potential regulatory hurdles before you've committed significant time or capital to the transaction. This early-stage assessment should feed directly into your deal timeline, financing structure, and go/no-go decision — not be treated as an afterthought once heads of terms are signed.

What is a 'second request' and how disruptive can it be to a deal?

A second request is a formal demand issued by the FTC or DOJ during a US antitrust review, requiring the merging parties to produce extensive additional documents, data, and testimony before the review clock restarts. Responding to a second request is extraordinarily resource-intensive, often involving millions of documents and taking three to six months or more to complete. Companies that underestimate this possibility risk serious disruption to deal timelines, increased transaction costs, and strained relationships with the target company or its shareholders.

Can a deal be structured upfront to reduce the risk of antitrust issues?

Yes, and this is one of the most effective ways to manage regulatory risk. Deal teams can proactively design transactions to exclude the specific assets or business lines most likely to attract scrutiny, or structure phased acquisitions that avoid triggering notification thresholds. However, regulators are increasingly alert to transactions that appear engineered to circumvent review, so any structural decisions must be grounded in genuine business rationale and reviewed carefully by experienced legal and financial advisors.

What are the most common mistakes companies make during antitrust review?

The most frequent mistakes include underestimating the timeline, providing inconsistent or poorly substantiated efficiency arguments, and failing to engage proactively with regulators before formal concerns are raised. Companies also sometimes overlook the need to manage multi-jurisdictional filings in a coordinated way, leading to conflicting positions across different regulatory authorities. Thorough preparation of your financial and competitive data before the review begins is one of the most effective ways to avoid these pitfalls.

How does antitrust review affect deal financing and closing conditions?

Regulatory approval is typically a condition precedent to closing, which means financing arrangements, earnouts, and operational commitments all remain in a state of uncertainty until clearance is obtained. Lenders and investors factor regulatory risk into deal pricing, and extended review periods can trigger material adverse change clauses or renegotiation of terms. Stress-testing your financial model against a range of regulatory outcomes — including delayed closings or required divestitures — is essential for maintaining deal certainty.

If we're required to divest assets as a remedy, how should we approach valuing and negotiating those divestitures?

Divested assets must be packaged in a way that satisfies regulators — meaning the buyer must be credible and the divested business must be genuinely viable as a standalone competitor. This requires rigorous financial modelling of the carved-out entity, including its standalone cost structure, revenue dependencies, and transition service requirements. Approaching this process with clear financial analysis not only speeds up regulatory approval but also strengthens your negotiating position on the divestiture price and terms.

Does antitrust risk vary significantly by industry, and which sectors face the most scrutiny today?

Antitrust risk varies considerably by industry, and the level of scrutiny has intensified in several sectors in recent years. Technology, healthcare, pharmaceuticals, and financial services currently attract the highest levels of regulatory attention, particularly where acquisitions involve data assets, platform ecosystems, or the elimination of nascent competitors. Companies operating in these sectors should expect more thorough second-phase investigations and should prepare their competitive rationale with a higher level of analytical rigor than might have been required in previous years.

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