In April 2017, Fresenius Kabi AG, a German healthcare company, agreed to buy generic drug company Akorn for $4.3 billion. The merger agreement included a “hell-or high water” system under which Fresenius was required to take “all necessary measures” to obtain authorization for cartels and abuse of dominance and to “not take action” that could “impede or delay” the conclusion. The merger agreement gave Fresenius the exclusive right to control “the strategy” in order to obtain the authorization of the supervisory authority – in this case the Federal Trade Commission (FTC). Shortly after the signing, but before the closure, Akorn`s business development would have slowed dramatically. Fresenius also learned that Akorn, in alleged violation of the merger agreement, had misrepreserated its compliance with FDA rules and had not addressed significant data quality and integrity issues. In April 2018, Fresenius Akorn announced that the merger agreement would be terminated before the conclusion and that the FTC had not yet been approved. Akorn complained and sought some performance. A number of instruments are on the agenda to address the risks associated with cartels and abuse of dominance, including competition clauses, final data, termination or termination fees, essential adverse event clauses and control of the investigation strategy. These provisions govern the obligations of the parties in the run-up to the conclusion and define the obligations of the parties if the transaction is not concluded. Transactions can and often are broken. However, if this is not the case, the actions taken by the parties that lead to termination are subject to a review of compliance with the various provisions.

If the detection of an offence makes the difference in the question of who pays for the cost of the aborted agreement, strict understanding and compliance with the provisions of the agreement will be essential. Here we discuss the most common provisions used to ensure compliance with the rules and we also give some practical examples of how they have developed. The effort clauses come in many flavours, but in the context of the agreement, all regulate what the parties have agreed to obtain approval for the transaction. Efforts and actions can range from a slight contact for transactions without problems of cartels and abuse of dominance to a difficult combination of neck-and-neck competitors for whom agencies are supposed to be controlled. The clauses generally contain one of the “best efforts,” “reasonable best efforts” or “reasonable best commercial efforts” and are generally understood as reduction effort commitments. The “hellish or flood” provision, which requires the purchaser to take all necessary steps to obtain authorization for cartels and abuse of dominance, is a tool that the parties use when the transaction poses a real risk in terms of cartels and abuse of dominance and have agreed that the risk would be borne exclusively by the purchaser. There are many reasons why buyers consent, including price, difference in risk vision, trading effect and competitiveness of the bidding group for the target transaction or assets. The provision of flood or flooding generally means that the purchaser must, for example, respond to a “second request” from the Agency and participate in a wide-ranging antitrust investigation of the transaction (a lengthy and costly process), assignments or other corrective measures to satisfy antitrust authorities and must defend the transaction through litigation when challenged on the basis of cartel law. As counsel is aware when negotiating mergers, acquisitions or other transactions, provisions that involve risks in agreements between the buyer and the seller or between joint venture partners are a common feature of merger and joint venture agreements. Such provisions are increasingly important