You're the head of corporate development at a company in Madrid, and you have a merger in sight that fits like a glove: the target is exactly the competitor you're missing. The board is in love with the strategic fit and wants to sign now. But you know the regulator doesn't look at strategic appeal — it looks at how many competitors remain afterward. And a "perfect" fit is sometimes exactly what blocks it.
The situation
Antitrust evaluates a merger by its effect on competition in the relevant market: how many significant competitors remain, how much concentration rises, and which theory of harm applies (higher prices, less innovation). A merger that leaves a market at four-to-three —or worse, three-to-two— sets off alarms; one that leaves plenty of rivals sails through. AT&T tried to buy T-Mobile (four-to-three in mobile), the regulator blocked it, and AT&T paid a multi-billion-dollar breakup fee. Microsoft was pursued for conduct, not a merger, but the logic is the same: market power matters.
Here's the trap that tempts your board. Strategic fit —the more "perfect" it looks, the worse— usually means you're eliminating your most direct competitor, exactly what the regulator won't allow. And defining the market narrowly and self-servingly ("we're a niche player") fools no one: the regulator uses the real definition. Assuming the deal will close because it makes sense for you means ignoring the risk of a block, the breakup fee, and the lost time. The defensible move is to assess the antitrust risk up front —resulting concentration, theory of harm, viable remedies— and pursue the deal only if it's approvable, with the cost of failure already priced in.