Willis Introduces Merger Protect Insurance for M&A Regulatory Compliance

Willis has introduced Merger Protect, a specialized insurance product designed to aid organizations in managing financial outcomes related to US antitrust reviews during mergers and acquisitions. This innovative solution is part of Willis’s broader transactional risk management offerings, tailored to meet the evolving challenges of the M&A landscape.

Regulatory Compliance in M&A

Merger Protect is crafted to reimburse clients for expenses arising from a Second Request issued under the Hart-Scott-Rodino Act by the US Federal Trade Commission or the Department of Justice, as well as during any potential enforcement actions. This insurance product aims to assist buyers, sellers, and their advisors through what can be a demanding phase of the deal process.

Second Requests often necessitate extensive data collection, document production, and analysis, which can extend timelines and increase costs. Legal fees, consultant charges, and expenses related to e-discovery and document review can accumulate swiftly, leading to financial uncertainty.

Aartie Manansingh, Head of Alternative Asset Insurance Solutions at Willis, highlighted the utility of Merger Protect, stating that it provides deal participants a means to safeguard against cost fluctuations during regulatory examinations, without compromising the integrity of transaction defense. This policy introduces a new dimension in risk management for M&A stakeholders.

Typically secured early in a reportable transaction, the policy activates through reimbursement for covered expenses if a Second Request arises, adhering to predetermined terms and conditions, including any retentions and limits. If enforcement proceedings progress, the coverage might extend correspondingly.

Eligible costs under the Merger Protect policy may include fees for external legal counsel, consulting support, expert economists, and industry specialists, along with expenses for data handling, document preparation, and executive readiness. This comprehensive approach provides firms a clearer perspective on regulatory costs, thereby preserving deal value and mitigating unforeseen financial strain. The insurance solution aims to minimize operational disruptions, enabling executive teams to focus on completing the transaction.

The Litigation and Contingent Risk Solutions team at Willis collaborates with clients to customize coverage tailored to each transaction's specifics, considering factors such as size, industry, and regulatory exposure. This team leverages both insurance expertise and insights into antitrust processes, utilizing data on Second Request activities and enforcement patterns to create comprehensive coverage solutions.