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The Role of Trustees in EC Competition Law

The Role of Trustees in EC Competition Law

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The Role of Trustees in EC Competition Law

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  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