An amalgamation or joining of two or more firms into an existing firm or to form a new firm. A merger is a method by which firms can increase their size and expand into existing or new economic activities and markets. A variety of motives may exist for mergers: to increase economic efficiency, to acquire market power, to diversify, to expand into different geographic markets, to pursue financial and R&D synergies, etc. Mergers are classified into three types:
Horizontal Merger: Merger between firms that produce and sell the same products, i.e., between competing firms. Horizontal mergers, if significant in size, can reduce competition in a market and are often reviewed by competition authorities. Horizontal mergers can be viewed as horizontal integration of firms in a market or across markets.
Vertical Merger: Merger between firms operating at different stages of production, e.g., from raw materials to finished products to distribution. An example would be a steel manufacturer merging with an iron ore producer.
Vertical mergers usually increase economic efficiency, although they may sometimes have an anticompetitive effect.
Conglomerate Merger: Merger between firms in unrelated business, e.g., between an automobile manufacturer and a food processing firm.
Source: OECD
In Brief On 10 October 2024, the Australian Government introduced a bill into Parliament for Australia to enact a mandatory and suspensory competition merger clearance regime. The regime will commence on 1 January 2026, although parties can voluntarily seek clearance under the new regime from 1 July 2025. The thresholds for mandatory merger clearance[1] are…
On June 20, 2024, the Canadian Parliament passed important changes to Canada’s Competition Act (Act) with the enactment of Bill C-59, the Fall Economic Statement Implementation Act, 2023 (Bill C-59). The amendments to the Act contained in Bill C-59 mark the third (stage in the Canadian government’s extensive overhaul of Canadian competition law, which began…
On 4th of April 2024, Egypt’s Prime Minister issued a decree by which the Executive Regulations of Competition Law No. (3) of 2005 was amended to put in detail the changes that had been made to the said Law introducing Egypt’s first pre-merger control regime. This blog post sheds light on the role of the…
In May 2024, the Danish Parliament adopted a major overhaul of the Danish Competition Act, including introducing higher fines, a new competition tool, and a merger call-in option, effective from 1 July 2024. In particular, the call-in option will have drastic consequences, and in the future all mergers involving Danish activities could potentially become notifiable….
Introduction On March 21st Advocate General Emiliou handed down his Opinion in Joined Cases C-611/22P and C-625/22P, respectively Illumina Inc. v. European Commission and Grail LLC, and Illumina Inc. v. European Commission. One can argue that the Emiliou Opinion is an exercise in throwing the proverbial kitchen sink at the position of the European Commission…
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It is often said that one of the greatest things about watching an important character is people wondering when he is going to make his comeback. In 2019, thirteen days after the prohibition of Siemens’ proposed acquisition of Alstom was published by the European Commission, Germany and France issued a public Manifesto ‘for a European industrial…
Looking back on the year 2023, this note aims to give an update on the state of play in Chinese merger control. In particular, it looks at how merger control has evolved since China’s main antitrust statute – the Anti-Monopoly Law (“AML”) – was amended for the first time in summer 2022. I will look…
The Czech Competition Authority (CCA) recently announced that it prepared a proposal to update the Czech Competition Act (the “Act”). While at present the proposal is just a set of ideas, it indicates how Czech competition enforcement may evolve in the years to come. Crucially, the CCA suggests deploying a “new competition tool” that will…
On 9 November 2023, the European Court of Justice (ECJ) confirmed that the European Commission (EC) was right to impose two separate fines on Altice for breaching standstill rules and failing to notify its acquisition of PT Portugal, but lowered the fine for failure to notify by €3.1 million. The European Union (EU) merger control…
