As businesses batten down to weather the implications of, and boost recovery from, the recent COVID-19 crisis, many are looking at strategic M&A to streamline, increase liquidity, divest the less functional edges of their corporate portfolio and merge with entities that strengthen their resilience. At the same time, across the globe, there is a trend of tougher merger control enforcement of procedural rules. Data, arguably the most valuable asset in the modern economy, is increasingly playing a critical role throughout M&A and merger control processes. All of these factors are weaving a complex web of challenges that can impact a transaction. Corporations today must be prepared to navigate the complex world of data with the right expertise and technology to reduce the cost and effort of managing these variables.
In the UK, the Competition and Markets Authority (CMA) has been ramping up its powers for Global Enforcement, following the UK’s departure from the EU. In the EU, the Directorate General for Competition (DG Comp) is increasingly requiring significant volumes of internal documents under highly compressed timelines. These are difficult to execute in practice and often result in costly delays. In 2019, the CMA issued new guidance that the agency can request any document in the merging parties’ possession at any stage of the investigation. The large volume, complexity and diversity of information generated by even small-sized businesses mean that managing the CMA’s requests often requires a specialist understanding of complex search protocols and technical solutions, with which most businesses are unfamiliar.
Regardless of jurisdiction, M&A matters come with inherent complications that require complex data identification and remediation throughout the deal lifecycle—from due diligence to post-close integration. This must be done without compromising on global competition regulations, data protection and other legal obligations. A repeatable approach will help organisations better deal with burdensome obligations, fulfill aggressive timeline requirements and gain a competitive advantage.
Through the advancements that have emerged in legal e-discovery and information governance, organisations can overcome common data challenges that arise during M&A, and achieve faster, more cost-effective transactions.
This article was originally published in Governance and Compliance magazine, www.govcompmag.com