Suspensory regime

Suspensory is about timing, not outcome. In a suspensory regime the parties may not implement the transaction while the authority is deciding, so signing and completion are separated by however long the review takes. The EU Merger Regulation is suspensory, and so is the US HSR regime once its thresholds are met.

The UK competition regime is the outlier: notification to the Competition and Markets Authority is voluntary and completion is not suspended. That reads as permissive and is in practice more dangerous, because the CMA can call in a deal that has already completed and impose an initial enforcement order requiring the businesses to be held separate while it investigates. A buyer can end up owning a business it is not allowed to integrate. So parties with real overlap notify voluntarily and make completion conditional on clearance, rebuilding a suspensory regime by contract because the alternative is worse. Note the asymmetry alongside it: the UK's national security screening regime is mandatory and genuinely suspensory for deals in specified sectors.

Once a regime is suspensory, three terms in the sale agreement stop being boilerplate. The long stop date sets when either side may walk. The efforts standard sets how hard the buyer must work for clearance. The reverse break fee sets what the buyer pays if clearance fails. Those three are where regulatory risk is allocated, and they are usually more contested than the last few points of price.

The gap also creates its own offence. Between signing and clearance the parties remain competitors in law, so coordinating pricing, allocating customers or exchanging competitively sensitive information is gun jumping, and it is punishable whether or not the deal is ultimately cleared. Integration planning is therefore run through a clean team walled off from commercial staff.