Antitrust Matters in Takeovers!!
Kishore Vaangal, PhD, Strategic Entrepreneur, Governance Professional and Ethicist, Ram Ram, India
The elemental axiomatic truth about jurisprudence and strategic management in takeover settings is that a crucial area that lies at the intersection is a least understood area. Antitrust issues, as they are at the core of most oil and gas takeovers, provide a plethora of complexities. This article aims to provide an overview of the fundamental antitrust issues and their nuances so as to enable the boards of oil and gas entities to strategise perspicaciously whilst effectuating acquisition initiatives. Antitrust issues are elementally driven by a singular motivating factor in that they seek to promote fair competition and whilst doing so, they do everything possible and plausible to stymie anti-competitive business practices. Whilst effectuating acquisition initiatives in the global oil and gas verticals, members of the board would have to deftly handle antitrust issues as their actions cannot be seen to undermine competitive conduct, and given the global issues involved, the boards have to, by definition, strategise adroitly to ensure that the takeovers effectuated do not fall foul of antitrust rules. In effect, antitrust issues are centred on forbidding faulty acquisitions so as to contain monopolisation, ensure that monopoly power is not achieved and sustained surreptitiously and in making sure that any kind of business formation that results from an acquisition initiative does not restrain trade in any way. Stifling competition by market dominance is at the heart of antitrust issues and it is an elemental duty of the board to ensure that antitrust issues are sensibly dealt with in the supreme interests of the stakeholders. The sine qua non being that boards have to pay cognisance to the fact that, whilst acquisitions are being effectuated, they get to address commercial practices in a fair-minded and equitable manner so as to make sure that the new business amalgamation does not threaten and/or exterminate competition.
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