Lawyers' millions from international merger reviews

The average merger review for the typical international corporate merger generates €2.1 million (1.45 million) in legal fees, research commissioned by the International Bar Association (IBA) and American Bar Association has found.

The research on the costs of mergers, conducted by Pricewaterhouse

Coopers, revealed that a typical international merger is worth €3.9 billion, requires six filings with a merger review authority and generates €3.3 million in external merger review costs, made up of 65% legal fees, 19% filing fees and 14% in fees for other advisers.

It takes an average of seven months to complete.

It found that when a competition authority expresses concern over potential anti-competitive elements, costs escalate dramatically.

A lack of consistency between different countries' filing requirements was also highlighted.

The survey said the costs of merger review were a 'small, regressive tax'.

Michael Reynolds, vice-chairman of the IBA's business law section and a partner at Allen & Overy in Brussels, said: 'With the proliferation of systems of merger control, concerns continue to be raised that the multiplication of regulatory, advisory and other professional costs are escalating, with little perceptible benefit to global welfare.'