Trustee's Role in EC Competition Law Overview and Implementation

1. COMPETITION The Role of Trustees in EC Competition Law David Davies ADVISORY

2. Overview • Implementation • Team required • Key initial actions • Possible problem areas • Key learning points

3. Implementation – the team may include . . . The Steering Group Head of Legal Senior business executive Key shared services personnel Board External competition lawyers Director M&A Group IT personnel Divestment Business A Divestment Business B Hold Separate Manager Hold Separate Manager Senior Management (businesses retained) Other operational executives Other operational executives IT IT Legal Legal

4. Implementation – overview of first two periods - Monitoring Trustee’s monthly reporting - Parties’ divestment reporting Kick off meetings Trustee briefings and site visits Hold separate / viability / carve-out proposals Implement hold separate / viability / carve-out actions Divestment process

5. Implementation – initial divestiture actions • Consider appointing investment advisers • Preparing Information Memorandum, bidding instructions, data room, etc • Identifying / contacting prospective purchasers • Planning / starting ‘carve-out’ activity – eg allocation of personnel, asset splitting, et • Agreeing reporting responsibilities

6. Implementation – initial viability issues • The performance of the Divestment Business against agreed strategy and business plan • Key customer, supplier and other contracts • R&D and capital expenditure programmes • Key shared services • Retention / incentivisation of Key Personnel • Regulatory compliance

7. Implementation - hold separate / ring-fencing • Appointing / briefing Hold Separate Manager(s) • Sending employee briefings / notifications • Reviewing reporting lines, roles and responsibilities • Content / circulation of management info’ • Identifying and reviewing services provided to the Divestment Business • Preparing and signing confidentiality agreements • Reviewing physical separation / access controls

8. Implementation - IT hold separate / ring-fencing • Identifying relevant IT personnel and infrastructure • Briefing Trustee’s team on IT infrastructure • Determining list of authorised users • Limiting access to Divestment Business data • Agreeing appropriate access controls and / or signing confidentiality agreements

9. Possible problem areas - divestiture • No suitable purchaser • Extensions of time limits • Insufficient information to demonstrate compliance with the Purchaser Requirements

10. Possible problem areas - other • Differences between EC and FTC requirements • Disputes - extent of Trustee’s powers • Partial relaxation of commitments needed

11. JV dissolution scenario A B Merger 49% 51% & Lead Operator European JVs C

12. Implementing hold separate arrangements Merger integration activity A B C 49% 51% & Lead Operator European JVs

13. Maintaining viability Merger integration activity A B C 49% 51% & Lead Operator European JVs

14. Enabling merger integration Merger integration activity A B C Filtered data 49% 51% & Lead Operator European JVs

15. Dissolution and merger integration completed A Merged B&C Corp A JV business fully integrated JV business fully integrated

16. Key learning points . . . • Prior to making commitments, consider the practicalities of implementing them • Early nomination of Trustee and planning • Identification and briefing of team members • Open and constructive dialogue with Trustee to plan and implement the commitments • Strong ongoing project management • ‘No surprises’ approach with the Commission

17. Questions

18. Contact details David Davies Head of Competition KPMG Forensic 20 Farringdon Street London EC4A 4PP Email: davidfa.davies@kpmg.co.uk Tel: +44 (0) 20 7311 3804 Fax: +44 (0) 20 7311 3630