As the global economy continues to evolve amidst increasing digitalization and shifting cross-border economic engagement, the framework governing M&A transactions is undergoing significant transformations. In recent years, M&A transactions have faced heightened regulatory scrutiny, including a reinforced grip on merger control, foreign subsidies regulations and foreign investment control.

While the geopolitical climate seems to signal an increased focus on national security and economic protectionism, a vigorous merger review process holds its own weight due to its multifaceted impact on each country’s economy.

With more than half of the countries in the world having active merger control regimes in 2024, the importance of screening M&A is very clear. Regulatory bodies are updating their merger guidelines to reflect contemporary economic realities, and there appears to be an increased focus on catching “killer acquisitions” (i.e., acquiring innovative targets solely to terminate its innovation projects and preempt future competition), peeking deeper into the operations and competitive strategies of companies during merger review. Are deals going to face greater antitrust headwinds going forward?

Recent changes to the merger filing requirements in the USA echo the global shift towards a more comprehensive merger review process

In the USA, the Hart-Scott-Rodino (HSR) Antitrust Improvements Act saw its premerger notification rules overhauled in 2024, with these changes set to take effect in early 2025. The new HSR form (which agencies have relied on for more than 45 years to screen M&A) has undergone a significant makeover, including fresh and enhanced reporting obligations around competitive overlaps, ownership structures (including details of entities between the ultimate parent entity and the direct acquirer), minority investments, foreign subsidies, and internal documents (analyzing competition aspects) submitted to the CEO and board members.

Interestingly, the HSR form now restricts the acquirer and target enterprises from exchanging any information while reporting details of overlaps and supply relationships with each other. While this is aimed at understanding each party’s narrative separately, notifying parties should be able to avoid a double-click on such submissions by presenting accurate data gathered through meticulous due diligence. To stay ahead of the curve, the FTC has also launched an online portal where anyone can comment on how the proposed transaction is likely to affect them or the market at large.

Recent changes in the merger review process in the European Union: Two steps forward, one step back?
The European Commission (EC) also recently introduced notable changes to its merger control procedures by adopting the Implementing Regulation (or Simplified Package) in 2023, followed by a revised notice on “market definitions” in 2024, in an effort to refine the merger review process, enhance its speed and adaptability to complexity.

The new rules expand the types of transactions which can qualify for a ‘simplified review’ (requiring submission of lesser details), and introduce a new super simplified review – available to transactions not involving any overlaps whatsoever, and also to joint ventures without local nexus in the EU. While the eligibility criteria to qualify for a simplified review primarily requires parties to remain below specified thresholds (in terms of market shares, assets and turnover), the new rules provide flexibility to submit hybrid notifications where some of the markets involved meet the eligibility criteria of the simplified procedure.

These are positive developments, and resonate with the EC’s objective to focus its resources on potentially problematic cases, while reducing the administrative burden linked to those that are unproblematic. The new rules also streamline the manner in which parties present their information to the regulator, through the addition of standardised checkboxes. Yet, the reporting obligations for transactions not falling within the simplified procedure stand further enhanced, now requiring parties to provide details of pipeline products, cross-shareholdings, economic analysis data, etc.

Big changes to the merger control framework in India
India’s merger control regime has also undergone a significant transformation, driven by amendments to the Competition Act, 2002 and a complete overhaul of regulations governing M&A, exemptions, and eligibility for green channel filings (i.e. transactions not involving any business overlaps and are deemed approved upon filing).

Although there hasn’t been much change to the reporting obligations during merger review, the introduction of a new ‘deal value threshold’ (DVT) is a critical shift in the process of evaluating whether a transaction needs to be notified to the Competition Commission of India (CCI). The DVT effectively requires transactions valued at more than INR 2,000 crores to be notified to the CCI, where the target has substantial local-nexus in India. The new regulations lay out a series of considerations for computing the deal value, accounting for inter-connected transactions, prior acquisitions in the same target, arrangements incidental to the primary deal, options, etc. These regulations also stipulate the minimum threshold required to gauge substantial local-nexus, in terms of user base, gross merchandise value and turnover.

Although the DVT is aimed at catching ‘killer acquisitions’ (which earlier slid through the cracks of merger review, especially because innovation-driven target companies often lacked the asset/turnover required to trip the merger filing thresholds), the variety of considerations involved will require transacting parties to evaluate potential merger filings earlier than what they are used to.
On a different note, the revised eligibility criteria for green channel filings (now requiring parties to consider overlaps with entities where they have access to commercially sensitive information) is also a significant development. This is likely to reduce green channel filings by sector-focused private equity firms, which typically seek varying degrees of information access rights in the target, to have visibility on its performance.

What does this mean for dealmakers?
While it is not new for companies to provide detailed information during the review of complex M&A, the shift in the base-level information required from parties (while evaluating and completing merger filings) will certainly require them to prepare earlier,
when anticipating merger filings in the USA, EU and India. Given the enhanced document reporting obligations in the USA, transacting parties should also be cautious while drafting internal documents and memos, particularly related to competitive positioning. Overly enthusiastic language that exaggerates market positions to enhance deal attractiveness should be avoided.
For private equity firms, roll-up investment and exit strategies in India will require careful consideration, as the DVT casts its net wide enough to catch sliced-and-diced transactions when they surpass the specified thresholds on an aggregated basis. While competition agencies wield sharper tools to screen big-ticket M&A, dealmakers must adopt a proactive approach to merger review.

Samir R Gandhi is a Partner and Shivam Jha is a Counsel at Axiom5 Law Chambers, LLP. Views are personal.