What regulatory approvals are needed for an M&A deal?

  • Posted by: Frédérique Pardon

Most M&A deals require some form of regulatory approval, but the specific requirements depend on the size of the transaction, the industries involved, and the countries where the parties operate. In cross-border deals or those involving large market players, multiple regulatory bodies may need to sign off before closing. Below, we answer the most common questions about M&A regulatory approvals so you know what to expect.

Which regulatory bodies typically review M&A deals?

The regulatory bodies that review M&A deals vary by jurisdiction, but competition authorities are almost always the primary gatekeepers. In the European Union, the European Commission handles deals that meet EU-level thresholds. In the United States, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) share responsibility. National competition authorities, such as the ACM in the Netherlands or the CMA in the UK, review deals that fall below EU thresholds but still affect their domestic markets.

Beyond competition regulators, other bodies may be involved depending on the sector:

  • Financial regulators such as the Dutch Central Bank (DNB) or the European Central Bank (ECB) for deals involving banks or insurers
  • Sector-specific regulators in industries like energy, telecoms, healthcare, and media, where market concentration is closely monitored
  • Foreign investment screening bodies such as CFIUS in the US or the Investment Screening Committee in the Netherlands, which review deals on national security grounds

In practice, a single cross-border deal can trigger review by several of these bodies simultaneously, which is why regulatory mapping is an essential early step in any transaction.

What is the merger control threshold and how is it calculated?

A merger control threshold is a set of financial criteria that determines whether a deal must be notified to a competition authority before it can close. If the parties involved exceed these thresholds, notification is mandatory. If they fall below, the deal can generally proceed without formal approval, though some jurisdictions allow regulators to call in deals even below thresholds in certain circumstances.

Thresholds are typically calculated based on a combination of:

  • Combined worldwide turnover of all parties involved
  • Turnover within the relevant jurisdiction (for example, EU-wide or country-specific revenue)
  • Market share in some jurisdictions, particularly for sector-specific regulators

As an example, the EU Merger Regulation applies when the combined worldwide turnover of all parties exceeds EUR 5 billion and the EU-wide turnover of at least two of the parties each exceeds EUR 250 million, unless each party achieves more than two-thirds of its EU turnover in a single member state. National thresholds vary considerably across countries, so it is important to assess each jurisdiction separately when structuring a cross-border deal.

What is the difference between Phase 1 and Phase 2 review?

Phase 1 and Phase 2 refer to the two stages of a formal merger control review. Phase 1 is the initial review, during which the regulator assesses whether the deal raises serious competition concerns. Phase 2 is a deeper investigation triggered when those concerns cannot be resolved quickly. The key difference is depth, duration, and the level of disruption to the deal timeline.

Phase 1 review

Phase 1 typically lasts 25 working days under EU rules (extendable to 35 days if remedies are offered). Most deals are cleared at this stage, either unconditionally or with minor commitments from the parties, such as divesting a specific business unit or granting access to certain assets. A Phase 1 clearance signals that the regulator sees no serious harm to competition.

Phase 2 review

Phase 2 is initiated when the regulator concludes that a deal could significantly impede effective competition. This stage can take an additional 90 working days, with possible extensions. The process involves a much more detailed examination of market dynamics, customer impact, and the parties’ internal documents. Deals that reach Phase 2 face a higher risk of prohibition or substantial remedies. Planning for the possibility of a Phase 2 review, and building that timeline into deal structuring, is a mark of disciplined transaction preparation.

Do all M&A deals require regulatory approval?

No, not all M&A deals require regulatory approval. The majority of transactions, particularly smaller acquisitions between companies with limited market presence, fall below notification thresholds and can close without formal review. However, “below threshold” does not always mean “no scrutiny.” Several jurisdictions have introduced mechanisms to review deals that fall below standard thresholds but may still affect competition or national security.

Deals are more likely to require approval when they involve:

  • Large companies with significant turnover in multiple jurisdictions
  • Parties that together hold a substantial share of a defined market
  • Regulated sectors such as financial services, energy, or healthcare
  • Foreign acquirers buying assets in strategically sensitive industries

Even when formal notification is not required, it is worth assessing whether voluntary notification might reduce the risk of a post-closing investigation. Regulatory risk is part of deal risk, and it deserves the same attention as financial and operational due diligence support for M&A transactions.

How long does regulatory approval take in an M&A deal?

Regulatory approval timelines vary widely depending on the complexity of the deal, the number of jurisdictions involved, and whether the review proceeds at Phase 1 or Phase 2. For a straightforward deal reviewed by a single authority, clearance can come in four to eight weeks. For complex, multi-jurisdictional transactions, the process can stretch to six months or longer.

As a rough guide:

  • EU Phase 1: 25 to 35 working days
  • EU Phase 2: an additional 90 working days, with possible extensions
  • US HSR review: an initial 30-day waiting period, with potential for a second request that extends the process significantly
  • National reviews: vary by country, typically ranging from four weeks to several months

In practice, the overall deal timeline needs to account for pre-notification discussions with regulators, document preparation, and potential requests for additional information. Building regulatory timelines into your deal schedule from the outset prevents costly surprises later.

What happens if an M&A deal closes without required approvals?

Closing an M&A deal without the required regulatory approvals, known as “gun-jumping,” carries serious legal and financial consequences. Regulators in most jurisdictions have the authority to impose significant fines, unwind the transaction, or require structural remedies even after closing. In the EU, gun-jumping fines can reach up to 10% of the parties’ combined worldwide turnover.

Beyond fines, the practical consequences can be severe:

  • The regulator may order the parties to operate as separate entities while the review proceeds, complicating integration efforts
  • In extreme cases, the deal can be declared void and the parties required to reverse the transaction entirely
  • Reputational damage can affect future dealings with regulators, lenders, and counterparties

Even well-intentioned coordination between merging parties before clearance, such as sharing sensitive commercial information or aligning pricing, can constitute gun-jumping. This is why legal and regulatory counsel should be involved from the earliest stages of a transaction, not just at signing.

How Greyt helps with M&A regulatory readiness

Navigating regulatory approvals is one of the most time-sensitive and high-stakes parts of any M&A transaction. We support companies through the entire process from a CFO perspective, combining financial rigor with structured deal execution so that regulatory risk is identified and managed early, not discovered at the last moment.

Concretely, we help with:

  • Deal readiness assessment: Our expert M&A advisory and financial services establishes the financial baseline and data quality needed to support a smooth regulatory filing
  • Regulatory mapping: We identify which jurisdictions and authorities are relevant based on turnover, market share, and sector, before the deal is signed
  • Due diligence support: We conduct thorough financial analysis to ensure the information regulators request is accurate, complete, and ready to be shared
  • Timeline planning: We integrate regulatory timelines into the overall deal schedule so that approval periods do not create unwanted delays or pressure at closing
  • Post-closing integration: Once approvals are in place, we support the integration phase to ensure the deal delivers the value it was designed to create

If you are preparing for an acquisition, divestment, or any transaction where regulatory approval may be required, we are happy to think through the process with you. Get in touch with us to discuss how we can support your deal from strategy to closing and beyond.

Frequently Asked Questions

Can a competition authority block an M&A deal even after granting initial approval?

In rare cases, yes. If a party provided incorrect or misleading information during the review process, a regulator can revoke its clearance decision — even years after closing. Additionally, some jurisdictions reserve the right to reopen investigations if post-merger market conditions deviate significantly from what was assessed. This is another reason why accuracy and completeness in all regulatory filings is non-negotiable.

What are remedies in the context of M&A regulatory approval, and how do they work?

Remedies are commitments made by the merging parties to address competition concerns raised by a regulator, in exchange for approval of the deal. They typically fall into two categories: structural remedies, such as divesting a business unit or a portfolio of assets, and behavioral remedies, such as granting competitors access to key infrastructure or agreeing not to raise prices for a defined period. Structural remedies are generally preferred by regulators because they create lasting market changes rather than requiring ongoing monitoring. Negotiating workable remedies early — ideally before Phase 2 is triggered — can be the difference between a deal closing on schedule and one that stalls indefinitely.

What is a 'fix-it-first' remedy and when should parties consider it?

A fix-it-first remedy is when the merging parties proactively agree to divest an asset or business before the regulator formally requests it, as a way to preempt competition concerns and accelerate clearance. This approach can be effective when the parties have a clear view of where regulatory friction is likely to arise and want to avoid a lengthy Phase 2 investigation. It requires strong preparation and early legal and financial advice, since the divested asset must be credible and sufficient to resolve the regulator's concerns without undermining the strategic rationale of the main deal.

How should a company prepare its financial data to support a regulatory filing?

Regulators typically require detailed financial information, including audited accounts, revenue breakdowns by product, geography, and customer segment, as well as market share data. Companies that have clean, well-structured financial records and a clear understanding of their own revenue composition are significantly better positioned to respond quickly and accurately to regulatory requests. Common pitfalls include inconsistent revenue classifications across subsidiaries, gaps in historical data, and turnover figures that have not been reconciled across jurisdictions — all of which can slow down the filing process or trigger additional information requests.

What is the HSR Act and when does it apply to M&A deals?

The Hart-Scott-Rodino (HSR) Act is the US federal law that requires parties to certain mergers and acquisitions to notify the FTC and DOJ and observe a mandatory waiting period before closing. The filing thresholds are adjusted annually; as of 2024, the size-of-transaction threshold is approximately USD 119.5 million. If both the transaction size and the size-of-person tests are met, notification is mandatory. The initial waiting period is 30 days, but regulators can issue a 'second request' for additional information, which substantially extends the timeline and significantly increases the cost and complexity of the review.

What is foreign investment screening and how is it different from merger control?

Foreign investment screening is a separate regulatory process focused on national security and strategic interests, rather than competition. While merger control asks whether a deal harms market competition, foreign investment screening asks whether a foreign acquirer gaining control of a domestic asset poses a risk to national security, critical infrastructure, or sensitive technologies. Bodies like CFIUS in the US or the Investment Screening Committee in the Netherlands can impose conditions or block deals on these grounds, entirely independently of competition clearance. A deal can be cleared by competition authorities and still face significant hurdles at the foreign investment screening stage, which is why both processes need to be assessed in parallel from the outset.

At what point in an M&A transaction should regulatory planning begin?

Regulatory planning should begin during the deal structuring phase — ideally before a letter of intent is signed. Early regulatory mapping allows parties to identify which jurisdictions require notification, estimate realistic timelines, assess the likelihood of a Phase 2 review, and factor potential remedies into deal valuation and structuring. Starting too late is one of the most common and costly mistakes in M&A transactions: regulatory surprises discovered after signing can delay closing, erode deal value, or in the worst case, force parties to walk away from a transaction entirely.

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