Is Regulatory Scrutiny Redefining Success in M&A Transactions?

Mergers and acquisitions (M&A) offer growth opportunities and strategic advantages for businesses; however, the shifting regulatory environment presents unprecedented challenges for dealmakers and their legal advisors. 

The global M&A market has been navigating significant regulatory turbulence, which has affected deal complexity and risk profiles across various sectors and geographies. After reaching a peak deal value of US$4.1 trillion in 2021, the market softened to US$2.1 trillion in 2023 before a modest rebound began in 2024.   

These evolving regulatory frameworks require legal consultants to provide agile counsel, helping clients to anticipate legal hurdles and adapt deal structures accordingly. Regulatory barriers often result in extended approval timelines, conditional clearances, or divestitures of deals, increasing transaction uncertainty and costs. Legal counsel has therefore evolved from compliance executors to strategic architects: mapping regulatory risks, structuring proactive remedies, and guiding clients through politically charged reviews. 

Regulatory volatility: scope and implications 

Regulators are treating mergers not merely as competition questions but as instruments of industrial policy, innovation strategy, and national security. That expanded mandate changes how legal advisers must design, value, and time deals. 

Global enforcement intensity has risen sharply. The US Federal Trade Commission, the European Commission, and the UK Competition and Markets Authority are testing new thresholds and challenging vertical integrations that previously escaped scrutiny. The US Department of Justice and FTC have updated merger guidelines to emphasise market concentration in emerging technologies and data ecosystems. These shifts turn legal risk into a core economic variable; every M&A model now needs a regulatory sensitivity analysis. 

What top-tier M&A counsel must deliver 

Effective counsel now blends legal precision with strategic foresight, political fluency, and economic modelling. In volatile environments, lawyering is about building an adaptive regulatory playbook. 

Core capabilities include: 

• Regulatory mapping: Identify every jurisdiction that can assert authority, including indirect referral mechanisms such as the EU's Article 22. 
  

• Scenario and remedy modelling: Quantify the cost of possible divestitures, conduct commitments, and litigation delays. 
  

• Integrated diligence: Extend diligence beyond financials to capture prior regulatory investigations, sector-specific approvals, and commitment histories. 
  

• Pre-clearance advocacy: Develop factual narratives that align the transaction's strategic purpose with competition and consumer-benefit arguments. 
  

• Remedy architecture: Craft behavioural or structural undertakings that are measurable, time-bound, and credible to regulators. 

  
  

Case Studies: Real-World Regulatory Impact on M&A 

Recent high-profile deals underscore the importance of a proactive legal strategy in determining outcomes. Each case illustrates how regulatory foresight, or the lack thereof, can make or break a transaction. 

1. Microsoft / Activision Blizzard (Global, Gaming & Media) 

• Regulators: US Federal Trade Commission (FTC), UK Competition and Markets Authority (CMA), European Commission (EC). 

  
  

• Summary: Microsoft's US$68.7 billion acquisition of Activision Blizzard closed in October 2023, following a 21-month, multi-jurisdictional review of issues related to market foreclosure in cloud gaming and access to key content, such as Call of Duty. Authorities in the US, UK, and EU raised concerns about competition and consumer choice in gaming platforms. 

  
  

• Remedy: The deal was cleared after Microsoft committed to behavioural remedies, namely maintaining cloud gaming and PlayStation access for key Activision franchises for 10 years. This coordinated regulatory engagement led to deal clearance once cloud-access commitments and ongoing compliance monitoring were formalised, demonstrating the importance of flexible remedy negotiation and multi-agency cooperation in large-cap tech M&A. 

  
  

2. Synopsys / Ansys (US, Semiconductor Design Software) 

• Regulator: US Federal Trade Commission (FTC) 

  
  

• Summary: Synopsys, a leading developer of semiconductor design automation tools, sought to acquire Ansys, a top provider of simulation software. Both firms were duopolists in key optical and photonic simulation market segments, jointly controlling a market share of over 60–70%. The FTC challenged the merger, citing risks of higher prices and reduced innovation. 

  
  

• Remedy: Approval was contingent on substantial divestitures. Synopsys and Ansys were both required to divest specific optical software tools, photonic simulation assets, and the RTL power analysis tool 'PowerArtist' to a third-party buyer, Keysight Technologies. This structural remedy preserved market rivalry and innovation for chip design tools. 

  
  

3. Hewlett Packard Enterprise (HPE) / Juniper Networks 

• Regulator: US Department of Justice (DOJ) 

  
  

• Summary: HPE aimed to acquire Juniper, a fast-growing provider of AI-powered enterprise WLAN solutions. Post-merger, HPE and Cisco would jointly command over 70% of the US enterprise WLAN market. The DOJ feared losing head-to-head competition with Juniper, an industry disruptor. 

  
  

• Remedy: The DOJ settlement required HPE to divest its worldwide Instant On business and license the source code for Juniper's AI Ops WLAN software to approved licensees, with a perpetual global license, ensuring a viable new competitor remained in the space. 

  
  

4. Omnicom / Interpublic (US, Media Buying Services) 

• Regulator: FTC 

  
  

• Summary: Two of the largest US advertising groups, Omnicom & Interpublic, pursued a merger that would make them the market leader in media buying, reducing the number of major competitors from six to five. The FTC did not find evidence of classical price or output harm but flagged the risk of political and ideological coordination in ad placements. 

  
  

• Remedy: The consent order prohibits Omnicom from directing media spend based on publishers' political or ideological leanings. This addressed concerns over potential suppression of publisher diversity and "viewpoint discrimination" in advertising markets. 
  

5. Bajaj Group / Bajaj Allianz (India, Insurance Sector) 

• Regulators: Competition Commission of India (CCI), Insurance Regulatory and Development Authority of India (IRDAI) 

  
  

• Summary: Bajaj Group's US$2.7 billion acquisition of a 26% stake in Bajaj Allianz Life and General Insurance was a notable milestone in India's insurance sector consolidation in 2025. The transaction was subject to India's new Deal Value Threshold, which mandates a competition review by the CCI and an additional sectoral assessment by IRDAI, both focused on market impact and shareholder suitability. 

  
  

• Remedy: The acquisition successfully cleared regulatory hurdles after the CCI reviewed market concentration and competitive implications, while IRDAI examined sectoral stability and compliance with foreign direct investment and insurance norms. With both authorities satisfied, the deal set a benchmark for robust multi-level scrutiny of strategic financial transactions in India.   

The case exemplifies how India's regulators are maturing rapidly: large-ticket domestic consolidations now attract intense scrutiny comparable to global standards. Counsel handling Indian transactions must plan for exhaustive information requests, sector-specific sensitivities, and multi-stage conditional clearances. 

India's expanding role in global M&A 

India stands out as one of the few large markets combining robust growth with active regulatory evolution. For M&A counsel, India's opportunity is matched only by its regulatory complexity. 

• According to PwC India, deal value surged 60% quarter-on-quarter to US$19.6 billion in Q1 2024, driven by the energy, telecom, and media sectors. 
  

• BCG reports that in the first nine months of 2024, Indian M&A deal value rose 66 % versus 2023, even as volumes fell 3%, signalling consolidation at the top end.  

• February 2025 alone recorded 226 M&A and PE transactions worth US$7.2 billion, the highest monthly tally in three years. 

  
  

These figures reveal a market that is both scaling and professionalising. Yet with that growth comes regulatory sophistication: the CCI, SEBI, RBI, and sectoral regulators increasingly coordinate to review significant transactions. Legal advisers must therefore align global structuring techniques with local compliance expertise, integrating merger-control timelines, sectoral approval paths, and remedy design into valuation models from the outset. 

Actionable advice for deal teams 

Translating regulatory foresight into deal value requires disciplined execution. The most effective M&A legal advisers operate with scenario-driven planning and early engagement with regulators. 

• Proactive Regulatory Engagement: Top firms initiate early dialogue with key agencies, seeking pre-filing consultations to clarify regulatory intents and pre-empt roadblocks. 

  
  

• Customised Deal Structuring: Employing mechanisms like earnouts, carve-outs, or JV models, with negotiation leeway for regulatory contingencies, is becoming standard in managing deal approvals.  
  

• Transaction Safeguards: Escrow set-ups, indemnity-linked adjustments, and regulatory risk insurance are being integrated into legal frameworks to protect clients from last-minute interventions or regulatory reversals. 

  
  

• Sectoral Regulatory Monitoring: Real-time tracking of pronouncements from major regulatory bodies (e.g., CCI, CFIUS, EU authorities) is now essential, particularly in the energy, technology, and digital infrastructure sectors. 

  
  

• Geopolitical Intelligence: Legal advisors are increasingly factoring in global tensions, as cross-border deals draw political and national interest, influencing not only the timing but also the very feasibility of transactions. 

  
  

Conclusion: Mastering volatility through strategy 

In today's M&A landscape, successful legal consultancy is defined by proactive regulatory engagement, multidisciplinary expertise, and the ability to structure resilient deals amid global scrutiny. The most strategic advisors anticipate challenges, deliver innovative solutions, and ensure their clients lead confidently in an environment where compliance and creativity set the benchmark for sustainable value. 

In an era where regulatory strategy is increasingly intertwined with corporate strategy, M&A legal advisors who can transform uncertainty into structure will define the next generation of winning deals.