Change of law risk; impact on M&A

Increased due diligence, integration scenario planning, and contractual allocation of risk negotiations required.



Due diligence/ integration issues

Cross border European rights (e.g. financial services passports, European patents, free movement of employment across borders) or the UK’s existing EU exemptions for trading with Europe may no longer apply.



Tax planning and structuring

Common EU rules, e.g. on VAT, may no longer apply.



Merger control filings

The EU operates a ‘one-stop-shop‘ merger control regime for transactions that would otherwise have to be notified for clearance in a number of individual EU or EEA countries. Depending on the nature of the UK’s trading relationship with the EU post-Brexit the UK would no longer be a jurisdiction within that one-stop-shop. This would be likely to mean more transactions being notified and investigated by the UK’s Competition and Markets Authority (CMA).



Private equity

Competition compliance and investigations

The substantive rules on anti-trust are likely to remain unchanged post-Brexit, meaning that very few changes would be required to compliance policies. The main impact will be on investigations as Brexit will mean certain institutional and procedural changes to enforcement (e.g. to leniency applications and the conduct of cartel investigations).




State aid

State aid rules are intended to ensure a level-playing field for business within the Single Market. EEA countries are bound by the same rules as EU Member States. Brexit may allow the Government greater freedom to subsidise businesses and otherwise award ‘aid‘ measures if it were able to negotiate not to be bound by them when agreeing a new trading relationship with the EU. However, such an outcome may be difficult to achieve.




Loss of transactional tools

A number of cross border M&A mechanisms, e.g. cross border mergers, insurance business transfers, and entity structures, e.g. the Société Européene and EEIG, rely on European regulations and/or mutual recognition which may no longer apply.



TMC checklist