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The future direction of the EU mergers and acquisitions policy
This European Commission White Paper takes stock of how the EU has overseen mergers between companies over the past 10 years. It concludes that this has been effective overall, but suggests it could be improved in two areas by:
ACT
White Paper: Towards more effective EU merger control (COM(2014) 449 final of 9.7.2014)
SUMMARY
WHAT DOES THE WHITE PAPER DO?
This European Commission White Paper takes stock of how the EU has overseen mergers between companies over the past 10 years. It concludes that this has been effective overall, but suggests it could be improved in two areas by:
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allowing the Commission to review mergers from acquisitions of non-controlling minority shareholdings;
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reforming the rules for transferring merger cases from national authorities to the Commission and vice versa.
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KEY POINTS
The White Paper proposes that a company would have to notify the Commission if it is planning to take over a minority shareholding which could significantly affect competition.
It would have to provide data such as the companies’ turnover, a description of the transaction, the level of shareholding and some market information.
The Commission considers that this ‘targeted transparency system’ would not add unnecessary administrative burdens on companies, but would give it sufficient details to decide whether to investigate the merger further.
The proposed changes to the referral of mergers from national authorities to the Commission are designed to make the system faster and more effective.
The White Paper advocates that the companies involved inform the Commission directly, without the case first going through a national competition body (the current procedure). The national competition body would be informed of the proposed merger and could decide to review it itself. If it does not - and national authorities rarely veto such requests - the Commission will examine the case itself.
BACKGROUND
The EU’s merger legislation last had a major overhaul in 2004. It provides a harmonised set of rules for concentrations and corporate restructuring. This ensures that competition, and thus consumers, are not harmed by changes in the marketplace.
The Commission has only prohibited 24 mergers since 1990 and just six since 2004 - significantly less than 1 % of over 5 000 mergers notified.
last update 10.09.2015