Managing Regulatory Compliance Risks in M&A

24:46Can you teach me how to land the narrative? You mean of a deal? Of a merger? Just to kind of get to rest attention around and get our story right, just so we can flow through approvally. Antitrust is a very factual, specific jurisprudence profession. If you read the antitrust laws, I'll stick with the United States, just to make it simple. The primary statute that the agencies are enforcing is Section 7 of the Clayton Act, which was passed in the early 20th century. It fills not even one page. basically says mergers that substantially lessen competition in any line of commerce in the United States are prohibited.

25:22I'm paraphrasing there, but the key is merger that substantially lessen competition in any line of commerce. So that's rather a simple test, but where antitrust gets complicated is actually applying that to the businesses of the merging party. So when I have a merger, again, that substantive question of, is this deal even possible? I'm going to want to talk to the business people, the vice presidents, the managing directors of the business lines of that maybe company A and company B have competing products. Are we the next best substitutes? How closely do we compete? Do we compete on price? Do we compete on service?

25:58Do we compete on other factors? What's the rate of innovation in these markets? Have we seen a lot of new competitors entering? Have we seen a lot of competitors exiting? What would be our post merger market share? What are the market shares of the other companies? Are companies capacity constrained? How much excess capacity is there? Are there foreign competitors that could come in? There's a thousand questions you'll want to ask to get to the details of the transaction. I would say that's even pre-narrative, to understand the facts. Once you understand the facts, then you can go to, okay, why is this merger not going to harm competition?

26:33It's not going to put the company, the combined company, in a position to increase prices after the merger, either on its own or in coordination with the other competitors. And in fact, this merger is actually good for competition because it's going to increase the speed of innovation. Let's say company A and company B both have products in the pipeline that are good for consumers. Combined together will actually bring those products to market faster than they otherwise would. or the combination of goods and services company A combined with company B will be a better package for your customers.

27:08And that's the key thing. You want to show this in terms of downstream markets, this is in the customer's interest. So that's how you create that narrative. You've got to have a detailed understanding of the facts first to then go on and say, okay, this merger will not harm competition. And in fact, it's actually good for competition and good for consumers. And you want that message consistent to the agencies. you want it consistent to customers, you want it consistent to your vendors, and you want it consistent to your employees because you want that consistent message. A pitfall is you tell one constituency one thing, another constituency another thing, and it conflicts.

27:44You darn sure better be consistent with, let's say, what you're telling DG Comp in Europe and the Department of Justice in the United States. Because guess what? They're talking as well. And they're talking about what are you doing with emerging parties? They may be sharing information. So you got to have a consistent approach among the agencies, among customers, suppliers, employees, etc. Start with the facts and have a clear, consistent story. It's not rocket science. Hey, can we do a little history on some of these anti-competitive laws? It goes back like well over 100 years. Oh, sure. I just know the Sherman Act and then there's Clayton Act.

28:18But I don't know, you know this stuff better than I do. If you want to maybe tap into a high level of like why we have these laws to begin with. The Sherman Act in the United States Senator John Sherman was the leading sponsor, Republican from Ohio, who, by the way, is the younger brother of General Tecumseh Sherman from the Civil War. It was enacted in 1890 in the kind of the midst of the Gilded Age. And by the way, like American football, antitrust in North America, it's actually Canadian first because Canada implemented their first competition law in 1889, the year before the Sherman Act. Kind of like Canadians played American football before we did.

28:53Kind of similar there. So the Sherman Act was enacted in 1890, in the middle of the Gilded Age, when there was a, and it's called antitrust, because back then, I think it was corporate law, you couldn't have corporations spanning multiple states, I believe. So there was a lot of concern about these trusts. It basically mergers. John D. Rockefeller and Standard Oil is an early example of kind of bringing in, under common ownership, railways, oil production, mines, and bring that in kind of common ownership. But it was interesting at the time, too, because at the time, it was both a concern of economic power and companies having monopolies and being able to increase prices or decrease innovation to the detriment of their customers.

29:37But also there very much also was a fear of political power, that economic power would become political power, take our democracy away. Fast forward 1972, the late great Justice Thurgood Marshall said that the antitrust laws are the quote Magna Carta of free enterprise and they are as important to protect our economic liberties as the Bill of Rights is to protect our civil liberties. Fast forward, 1914, you have the Federal Trade Commission Act, the creation of the Federal Trade Commission. The Sherman Act outlaws cartels and monopolies. The Federal Trade Commission Act outlaws unfair methods of competition, which includes cartels and monopolies, but also includes other things, what's called the penumbra of the Federal Trade Commission Act.

30:23We're still defining what that is. And then you had the Clayton Act, which also is right around the time of the FTC Act, which applies, again, outlaws, mergers, that's substantially less in competition. Again, that was early 20th century. And then beyond that, you've had amendments to those laws in the 1950s and 60s. The penalties for Sherman Act violations were substantially increased. And then finally, the Har-Scott-Rodino Act that we talked about, that was passed in the 1970s. It'd be interesting to see this doctrine of law that was founded in the 1890s, the late 19th century, which, by the way, had antecedents back to English common law even prior to that.

31:01But this doctrine of law that's developed over the past, oh, was it 130 years now? A current debate we're having, is it still fit for purpose to regulate markets today and to police markets into the 21st century and, frankly, into the 22nd century? And that's the ongoing debate that we're having today, both with the cases that are brought and academically. But I'll tell you, it's a fascinating and frankly, fun debate to be in. Interesting. I appreciate the quick history lesson because it tees up of why these things even exist to begin with. And then that sounds like it really stepped up during the Clayton Act.

31:31And that's around Roosevelt period. A little bit later than that. But yeah, there was a perception, I think, and I think it was actually during the Wilson administration, when the FTC Act came in, the Clayton Act came in, that the Sherman Act hadn't done enough to prevent the market concentration. The debate that they had in the 1890s about we need to break up monopolies and monopolies, economic power turning to political power. It's not like we've solved that question in 130 years since. We're still having those debates today. What was Standard Oil at the time? Maybe some people see as some of the big tech companies today.

32:04But the questions we had back in 1890, we're still basically asking the same questions today. Don't get me wrong. We've had a voluminous amount of jurisprudence in that time to define how do we show a substantial lesson in competition? How do we define markets? And by antitrust, it's both law and economics. So we've had a substantial amount of jurisprudence, which has answered questions. We've had a substantial amount of economic analysis, which gives us economic frameworks to kind of, again, see what competitive conditions are going to be when a merger happens. But the fundamental questions of, is this an effective way to police economic power impacting political power?

32:40The fundamental question still remains today. That's true. Where do we have? Great American success or monopoly? I should mention also, it'd be remiss of me, I've been very U.S. in my comments. We now have about 120 countries around the world that enforce some form of antitrust law, and that has exploded recently. So post-World War II, you had the Marshall Plan and Reconstruction. You had Europe enacting its first competition laws, antitrust moving to important economies like Japan, South Korea. And then you had in the past 20, 25 years, you've had South Africa, China, India, Brazil, other big, important developing economies all adopt antitrust or competition law.

33:23So when when it's expanded globally to today, it's now over 120 countries and territories. That's why it's so important to a company like FedEx because we operate globally and antitrust operates globally. I want to get back to our deal example. So we just saw our forum. You helped me nail the narrative down. We got it filled in. Now we're in this waiting period. Can we talk through what are the risks during the waiting period for, I guess, both sides of the table? So during this waiting period, let's just take our hypothetical deal. You'll be having engagement with the agencies. And let's just say for fun, And our deal is reportable in the United States, in Europe, at the European Union level, China, and Australia, just for fun.

34:01So you'll be talking to each of those agencies. Again, you'll want a consistent message. Let's say they're two U.S. companies with international operations. As an in-house counsel, I'm going to want to have my external counsel on the team, both in the United States. Also, it's key to have local counsel, in our example, in China, in Europe, and Australia, to help you with those agencies who have their own analysis to do. you'll be having your proactive. It's proactive and reactive with the agency. So you're going to want to submit stuff to the agencies. You'll probably have an economist on board as well to help explain the economics of the deal.

34:33And then you'll react because the agencies will send you, like the United States, they'll send you a second request, which is a huge discovery request, if you will, requiring data and documents. You probably also want to get a third-party document production group to help you with that. The agencies may want to talk with some of your executives and depositions or interviews. So you'll have to shepherd those through. There's the agency engagement part of this. The other risk you'll need to control for is gun jumping. So again, concurrent to this, you'll be conducting due diligence on the target.

35:04In the old days, I'm old enough to remember when due diligence, when you actually had the data room, you'd walk in and there'd be boxes of documents all over the place. You couldn't photocopy the documents, or maybe you could, or you certainly couldn't take them outside the room. Nowadays, it's all virtual. It's called a VDR or virtual data room. You'll have due diligence constructed through what's called the VDR or virtual data room. But to avoid the gun jumping risks, let's say sensitive information, let's say customer lists or prices or salaries, you probably don't want to have that fully available to everybody via the VDR.

35:37So you'll want to set up what's called a clean team, a subset of people who are working on the deal who aren't involved in like the competitive aspects of where the companies compete to review more sensitive documents like that to, again, avoid the gun-jumping risks of exchanging commercially sensitive information. Because let's not forget, you cannot get regulatory compliance and the deal falls apart, or there's a thousand reasons why the deal can fall apart and the merger collapses. Your financing collapses, valuation changes, et cetera, et cetera, et cetera. Or frankly, corporate exec doesn't like his or her role in the new company, and it falls apart because of that.

36:13Some personal reasons I've seen it happen. And again, so you'll want to set up this kind of BDR to have this structured framework to control the information flows between the company to avoid gun jumping risk. And you also can't have company A take premature control of company B. That even starts in your stock purchase agreement or your asset purchase agreement, depending on the deal structure. So, for instance, there's something called a material adverse effect where if this happens, the deal falls apart. you don't want to set those thresholds too low because you don't want to constrict company B's ordinary course of business.

36:48And where companies have gotten in trouble, as I say, material adverse effect threshold is too low, or you're going to require company B to have company A's permission for ordinary course of business transactions prior to closing. And that's getting into the premature control aspect of gun jumping. Sure. You may want to say you don't want company B to sell off its huge factory or the key asset you're acquiring. But when it comes to signing up customers or firing employees in the ordinary course of business, you're going to be very careful about what you're taking control of. Yeah, there may be key employees you'll want to have in the target post-acquisition, but you don't want to get involved in the target's ordinary course of business decisions for the gun jumping risk.

37:31And finally, one thing I probably should have mentioned before, but I'll mention it now and probably correct myself, is in addition to or as part of controlling the narrative in terms of why the deal is good for competition and why it doesn't raise competitive concerns, as in-house counsel and also external counsel, you are going to want to get on top of both the ordinary course of business documents of you and the acquired party and the deal docs. What is your company saying about the deal? What are your bankers saying about the deal? What is the target saying about the deal? I mentioned earlier in the United States under the HSR form, you're going to need to turn over what's called the 4C documents, documents that have been presented to an officer or director of the company that talk about the deal's impacts on markets, competition, etc.

38:23And then in a second request, you're going to need to turn over a lot of your ordinary course of business documents about places where you compete. So what are those documents saying about the deal, saying about competition? Is it consistent with your narrative? And you don't want it to be inconsistent, believe me. And some of the pitfalls I've seen in deals, both deals that I've worked on, not for FedEx, but deals I've worked on in the past or ones I've read about is, let's say you're saying that this deal is not going to create a monopoly, but your bankers, let's say your third party bankers who are trying to sell the deal are saying, oh, the target has a market position of they have the capacity to increase prices.

38:58And if you combine it with company A, you guys have a chance to leverage your market strength. So banker documents about what they're saying about your deal or the target. Let's say the target is a privately held company and they're looking to be bought out and cash in. They may play up. Oh, yeah, we have market power. Yeah, yeah, yeah. And you really can't avoid that. But you need to know if those things exist. It's not fun, let's say, to be in a deposition or an investigation and see either deal docs or ordinary course of business documents that you didn't know about that the agency brings to your attention.

39:31That's not a fun place to be. So don't gun jump. Probably like a big fundamental there. Yeah. No, it sounds like things are pretty smooth if you don't get that second request. Yeah, it is. That's true. If there's a second request or a phase two in Europe or the equivalents in, again, China, India, etc. You may need to answer questions within the first 30-day period or the first period. You may have document submissions. But if you could wrap it up before then, if you can avoid the phase two part of the merger review, that's great. And there's ways to do that. There's effective advocacy. Let's say company A and company B.

40:05Company A is on the West Coast primarily. Company B is on the East Coast primarily. Again, we're talking about a domestic deal.

40:15But A simple example, as part of the deal you present to the agencies, you say, look, we know there's an overlap here in Kansas City. We've already identified company C, which is another competitor, which is going to buy this part. It's going to take where it's called fix it first. We have a prearranged buyer. And as part of our transaction, we're going to divest this specific part of the deal to avoid the antitrust problems. And that may also be a way to get around an extended investigation, kind of identify the problem up front and fix it first. That's potentially another way to short circuit an agency's investigation.

40:48But yeah, to your point, a second request, more often than not, it is very intrusive. It is very expensive. It will lengthen the time period for, again, that pre-closing time period. Yes, because you got to give them a lot more information, sort of documentation and... Data, docs, etc. They're going to review and really be all up in your business. And then often the second request, the reason they're doing that is to build the evidence of the case they're working on, but also to prep themselves for likely the next stage, which would be depositions of your corporate executives based on the documents they see submitted via the second request.

41:23When they see my Slack message that I sent to my colleague of we're going to kill this competitor, something along those lines, then that's going to be held against us. It's interesting you mentioned Slack because the agencies recently put out revised guidance that companies have an obligation to preserve potential evidence on platforms like Slack, like Teams. 15 years ago, lawyers thought that email was going to be the death of legal privilege. Email is now tamed. It's like, what are people saying on Slack, Teams? What are people saying on WhatsApp? That's the next frontier, if you will, which the agency's clear.

41:59It's not even the next frontier. It's here now. It's the way people communicate and agencies know that and they're going to want to see that stuff too. But that'd be a best practice if I was going to go do a deal under review to tell my team, hey, don't put anything stupid in writing. If you got something to specifically talk about the nature of this deal, pick up the phone. Is that like a fair thing? I know I'm not asking for legal advice on this. Yeah, I wouldn't put it that way. The way I would counsel is be careful the way you describe. I would never probably say pick up the phone instead of putting documentation.

42:29Obviously, major corporations, you need documentation. But the way I would counsel it is just be careful the way you characterize things. For instance, terms like market share or market power, those have meanings in antitrust. Again, meanings that have been developed via case law, via economic analysis in the hundred and something years that the United States has been enforcing the antitrust laws. Which the meaning of that may be different from the business meaning of it. For instance, market shares. Oh, yeah, we have a great market share. Have you properly defined the relevant market in the way that antitrust has taught us to define the relevant market?

43:05There have been some recent examples where the agencies, actually both in the merger context and outside the merger context, where the agencies have the FTC or DOJ have said, oh, you received some careful coaching on what to say, or you were told to use the in-house corporate chat function and avoid email. I wouldn't go down that route. Just be cognizant. The business terms that you use may have different meanings in antitrust, and your documents will be seen. You may think things are seen in context. An agency reviewer will be reviewing page by page something that could stand out in an email, which is part of a broader conversation.

43:45They're going to say, ah, look at that. The general thing of don't put something in writing that you wouldn't want to see on the front page of the Wall Street Journal, for instance. Great tips. Is there a way to tell in advance of a deal if you're going to get reviewed? Or are you just going blind into this process? You're very rarely going blind. It goes back to what we were talking about earlier. Are there substantive concerns? So horizontal overlaps? Are there vertical issues, like vertical foreclosure issues? And a lot of it's going to depend, as we were just talking about, on what are your ordinary course of business documents say?

44:17What are your deal documents say? The deal documents are the first thing the agencies are going to look at. And if they're saying that the combination of company A and company B are going to create a company with a large market share, or let's say you're going down from three competitors in a market to two competitors or four competitors to three competitors, those kind of very high level views of market concentration are a huge flag of, yes, this deal likely will raise concern. So you're really going out completely blind. Also, you rarely have perfect information right up front. And it's something that as you go further in the deal, you dig into the ordering course of business documents, you may find evidence, both good and bad, that either support your theory about why the deal won't harm competition or may not support it.

45:05You'll want to find out about that and not have it brought to your attention by the agencies. Largely with the kind of analysis we talked about in terms of horizontal overlaps or vertical issues, you'll have a sense of kind of what the agencies will be interested in. And don't forget, especially in the United States, so many of the antitrust lawyers, like so I've had my agency experience in Jersey and then went to the private sector. There are people who go to the private sector and they go to the agencies and back. It's called the United States, they call it the revolving door. So you largely know the questions they'll be asking.

45:35And actually, the FTC and DOJ, on their substantive analysis, they have issued merger guidelines, just been updated about a year ago, which goes through the questions the agencies ask. So the framework is fairly transparent. You should be able to know, again, you won't be going in blind. You should have a sense of where the issues are, how much risk is there, recognizing, however, that you will not have perfect information, especially early on in the process. All right, let's say we go through this and then the deal ultimately gets rejected. what happens now? Can we appeal this? That depends where you are.

46:09In the U.S., again, the Federal Trade Commission and the Department of Justice, ultimately, they cannot stop a deal under the Hart-Scott-Rodino Act. If the FTC or DOJ wants to actually stop a deal, what they formally need to do is seek an injunction in federal district court to actually enjoin the deal. How it generally works is they will file for a preliminary injunction, which the court will grant or not. Now, it's just a preliminary injunction. There's a legal test of likelihood and the merits about whether the court will likely find it in favor that the deal is anti-competitive. But if the agencies get a preliminary injunction, often in the United States, that has the effect of killing a deal because it will often then push the deal beyond kind of the target closing date, your financing for the deal often will dry up.

47:02So preliminary injunction in the US will often have the effect of killing a deal. But in the United States, you can advise a client to say, to prohibit the merger, the FTC or the DOJ, the reviewing agency, will need to take you to court. You will have your day in court. Now, obviously, you can short circuit that. Let's say the I mentioned how earlier you get to fix it first extremity. If through the investigation, the agency say, hey, we're going to take you to court unless you agree to divest the assets in this geographic market. And you go, okay, you know what? We'll do that. You enter into what's called a consent decree, which is filed in court, but it's no longer an adversarial process, basically a settlement.

47:45But in the U.S., to ultimately block a deal, the FTC or the DOJ will need to take you to court and get a plenary injunction. I should also mentioned, by the way, the United States, in addition to the FTC and BOJ, state attorneys general and private plaintiffs, including class action plaintiffs, can also sue under Section 7 to stop a deal. Now, there's no pre-merger obligations with respect to state AGs or private plaintiffs, but they also potentially could out there to try to seek an injunction. So that's in the United States. When you get to places like Europe, it's a totally different... In Europe, Don't forget, the DG Comp, DG Competition, which is the European Competition Law Enforcer and the European Union's legal system, that's based on a civil law system as compared to a common law system in the United States.

48:32So under their civil law approach in Europe, DG Comp, the European competition enforcer itself, along with some of the national enforcers like the Bundeskartiller in Germany, the French competition agency, they can say that this deal violates European competition law and it is prohibited, final, and the deal cannot close. Now, the parties can seek judicial review on that, but absent extraordinary circumstances, the deal is basically dead. Before my time joining FedEx, there was a company in Europe called TNT, which was a Dutch express courier. UPS, actually, this is all public information. I mean, UPS tried to acquire them back in 2015.

49:15That deal was rejected by DG Comp, which killed that deal. The deal died. FedEx came in, FedEx then acquired, filed at DG Comp, got clearance at DG Comp, and then ultimately acquired TNT in 2016. Concurrently, UPS appealed the initial rejection decision. They actually won in the European Courts of Justice. The European courts have called the ECJ found that DG Comp didn't follow procedurally all the requirements that they had to during the merger investigation. But in a way, it's somewhat of a pyrrhic victory by that point because the UPS deal had already died because the agency said no and FedEx came in to acquire it.

49:53So they ultimately won in court, but it's arguably somewhat of a pyrrhic victory. So in the U.S., you'll have your day in court. In Europe, the administrative agency decides subject to judicial review. And then there's variances of that in other jurisdictions, you know, India, Australia, Brazil, etc. They've been getting a lot more aggressive lately. Why is it? Oh, yeah. No, I'd say it's particularly in the United States under the Biden administration. There's been much more second requests. I mentioned how early terminations under HSR were suspended for a bit. We kind of blame that on COVID. It's kind of relaxed, not totally relaxed, but they've been issuing a lot more second requests in the U.S.

50:28and looking abroad, again, Europe, Canada, India, South Africa, China, Brazil, I would say very, very aggressive regulators, but I wouldn't say aggressive in a bad way. They are just doing their statutory jobs to protect markets and competition in their jurisdiction. And they do a very good job at it. And they drive full engagement with the merging parties. You think they're in cahoots?

50:52Well, yeah, no, agencies will. There's been some criticism recently. There was a deal, I think Illumina Grail that I was not involved in, where there was, I think, some criticism of how much information that the European Union and FTC were exchanging. I don't really know the details of that. But look, as I said before, the agencies, when they're reviewing a common deal, they cooperate even beyond M &A in terms of cartel enforcement. That's largely a positive thing, busting up international cartels. You will need to assume in an international deal that where you file, the agencies will be talking.

51:26They may not be able to change information, but they at least will be talking. And again, that's back to that's why that consistency of message across agencies is very important. Gun jumping. Have you seen companies actually get in trouble for gun jumping? Knock on wood. Not for a client that I've represented, thankfully, to date. Just in 2024, I did a quick look recently. So there's been gun jumping fines or investigations in China, India, Mexico, and Spain. The United States, both the FTC and DOJ have been very active in this space. When I mentioned the Illumina Grail case, in July 2023, they received a 430 million euro fine for gun jumping, which I believe is one of the highest ever for closing their deal prior to getting clearance by DG Comp.

52:16That's currently under appeal at the European courts. Clear recent examples. I mentioned I was in Jersey. We brought a few gun jumping cases when I was at the JCRA as executive director. For instance, we actually fined Lufthansa. I forgot what the amount was, but we fined Lufthansa a few thousand pounds for closing their acquisition of an airline called CityJet, which was one of the airlines serving Jersey. They were legally required to file that in Jersey. They didn't. So we fined them for gun jumping. I've had some personal experience of that as a regulator, but thankfully not on the defendant's side.

52:49How do you balance it with like integration planning? I do a bunch of these podcasts, big advocates of planning integration early so you can have success post-close. But then you throw in all this junk gumping stuff in there, then it's maybe you shouldn't be requesting so much information and plan integration. It's very hard. And I'll even throw another complicating thing into the good example you've raised in terms of integration planning. But what if you also have, even prior to the acquisition, you already do business with the acquired party. You have ordinary course of business dealings with the acquired parties.

53:26It can get massively complex in that, okay, your ordinary course of business with the acquired party, you'll want to keep that separate from the potential deal, but that can get complicated. So let's say it's a long-term supply relationship, which is coming up to renew. Let's say they're a supplier and it's coming up to renew that long-term supply relationship. Do you go forward with that in light of the deal? What if the deal falls apart? So that can get complicated. And also in terms of premature control, that kind of stuff, if you're already dealing with the company at kind of a commercial level, that can get complex.

54:02So on a high level, you already have those pre-existing commercial relationship with the acquired company. I'd like to keep that separate. And there's an expression within companies of bringing people under the tent or tenting. I don't want people on the commercial side to be tented if we're already doing business with the target. So you got that complication. but also integration. Kind of the black letter law, if you will, is you can plan for integration, but you can't implement those plans. But you just need to be very careful. You can do detailed planning. You can't get into some of the information you may want to see, or you may want to make sure, let's say salaries, you'll want to put that in a clean room, not have that available for everybody.

54:43So only a subsection of people get to see that information in terms of integration planning. But there's only so much you can do pre-closing. And this goes beyond antitrust. So back to the question of, are they participating in a cartel? So typically in due diligence, you'll ask the target, are you involved in any government investigations in terms of antitrust or otherwise, anti-corruption, privacy? What decisions have you had in the past, let's say, five years? Have you received any subpoenas, any notices of violations, et cetera, et cetera? Any allegations that you're acting anti-competitively?

55:16You generally ask for those kind of things in due diligence. A thing you would like to do, for instance, is do a forensic email search of the acquired party's sales teams to see what kind of emails they're sending out about the competition. You clearly cannot do that during due diligence. But that's some things that, let's say, with integration, once you close, you may want to do that as part of, if you will, post-closing due diligence to see who could really look under the hood. And actually, the DOJ has just announced pretty recently that they're going to give companies a six-month window post-acquisition for not just antitrust, for like FCPA as well, where if you find evidence of illegal conduct post -acquisition, within six months, you can come into the agencies and give full disclosure or cooperate, and you can avoid or reduce fines in those scenarios.

56:06But you're right. It is very much a balancing act. In my experience, there are certain stages. Let's say as you get closer to your closing date, you filed HSR, you filed in Europe, and you get clearance in both Europe and the United States. In Europe, they closed the investigation. The United States, the agencies, the weight grade run out. The gun jumping concerns don't go away after the agencies, after you've received clearance. They're still there, but the focus on it isn't as acute. and as you get closer and closer to closing, because look, at the end of the day, day one, there are very practical considerations.

56:45Will employees' ID badges still let you in the building? Will people get paid on day one at the target company? Will their health insurance still work? There's practical things like that, that once you get agency clearance and as you get closer to closing, the gun jumping risk is still there, but it's the sliding scale. Okay, there's legal risks, but you also want to make sure people get paid on day one and their health insurance still works. So it's kind of a sliding scale. Once you get closer to closing, yes, you're still in the planning, but now, and I've been involved, let's say, for instance, IT service still works.

57:17You may want to have the IT people, okay, they're going to do what's called a sandbox. Okay, combine their platform and our platform and in a kind of a hypothetical kind of test environment, does it still work? And you can do that prior to closing, but not combine the IT systems. That's stuff you can do as you get closer. But yeah, it's something that you need to be on top of as antitrust lawyers. Dancing the fine line. Exactly. What is the best way to prepare for regulatory compliance? You got to know the facts. You got to know your clients and what they do. You got to be all over the business documents.

57:50Key is early engagement. With FedEx, we have a world-class legal team. In my role as an antitrust lawyer, I support both our specific M &A lawyers and our corporate development teams. And I'm often brought in very early on deals, both from kind of an antitrust perspective and a compliance perspective. And I find that useful, again, to help get the detailed knowledge of the facts beforehand, to help construct that narrative about where you need to file and why this deal is beneficial for the company, is beneficial for competition. So I think just that early engagement is key. And frankly, I would say that early engagement because a lot we're talking about here goes broader into compliance.

58:31M &A compliance is only one subsegment of corporate compliance, corporate legal compliance. And I'd say having that kind of business engagement, being a business partner, knowing the details of your business and having that engagement upfront, early and ongoing is key to the entire thing. Great way to summarize this. I got to ask you the most important question. What's that? What's the craziest thing you've seen in M &A? It goes back to what we've been talking about. It goes beyond M &A, just antitrust. Antitrust can be complicated. defining relevant markets, thinking what is the cross-elasticity of demand between company A's products, company B's products.

59:07These can be very complex and being acquired economists and etc. But when things get really simple is let's say you have a corporate document which has gone to the board of directors saying, hey, if company A and company B merge, they're going to have a monopoly or they'll be able to increase prices by 10%. You can have these complex economic arguments. You can hire the best economists in the world. But if your documents are going to sink you, that's going to be on page one of the complaints. You don't want to be there. There have been well-published cases of mergers where just the documents were horrible, either the ordinary course of business documents or the deal documents were horrible.

59:44And they sank the most sophisticated economic or legal arguments you could. The document says the merger will harm customers. That's a very steep hole to dig out of. And often you can't. It doesn't matter what the most brilliant lawyers and economists you hire. If your own documents are going to sink your deal or contradict what you're saying, that's not a fun day. Don't forget the fundamentals. Exactly. Charles, this has been a great conversation. Well, thank you. It's been fun. I've been checking out your stuff on LinkedIn to really have you take a whole approach to mergers. It's a great subject.

1:00:16M &A Science does just fantastic work there. I appreciate the opportunity to contribute to what you guys do, but it's obviously to give the exposure you guys do to the entire M &A spectrum, not just the antitrust part, but giving kind of the antitrust part of that has been an absolute honor and privilege to me. So thank you for this interview and thank you for the great work that M &A Science does. Pleasure is all mine. You've contributed a lot to our rising community of M &A scientists. Today helped me become a better M &A scientist. And those of you still listening, thank you. Love to hear from you.

1:00:46Reach out to me on LinkedIn. Any ideas, topics, suggestions, feedback, open to it. Until next time, here's to the deal.

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