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
On 21 September 2016, the German Government has introduced a formal legislative proposal (Gesetzesvorschlag – “Government Proposal”) for the reform of the Act against Restraint of Competition (“ARC”; 9th amendment) which builds on the draft proposal (Referentenentwurf – “Ministerial Draft”) of the Federal Ministry of Economics. It still includes the proposed extension of German merger…
Given the very low notification thresholds in Ukraine, which caught even foreign-to-foreign transactions that in the majority of cases raised no antitrust concerns and did not have local nexus, a number of parties skipped local notification and breached the law. In some cases the agency has pursed companies for failure to notify, and these…
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“Hope Smiles from the threshold of the year to come, Whispering ‘it will be happier’…” Introduction This quote from Alfred, Lord Tennyson might – I sincerely hope after recent events – be applicable to life generally in Brussels in 2017. But not so – I fear – in the world of EU merger control. It…
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On August 19, 2016 the new Merger Regulation was adopted in Ukraine. This step is the next improvement after increasing notification thresholds aimed at improving merger control regime effectiveness in Ukraine. The key novelties of the new Merger Regulation include: introduction of requirements to applications within the simplified procedure adopted in May 2016; introduction of…
Following the Commission decision in the GE/Alstom case, members of the Chief Economist Team have, on a number of occasions, publicly commented on the bidding analysis undertaken in this case. During these interventions, they have signalled that the analysis undertaken in GE/Alstom represents an important framework for the future competitive assessment of mergers involving bidding…
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On 8 June 2016, the Chinese Ministry of Commerce (“MOFCOM“) released its decision to lift the conditions it had imposed on Walmart’s acquisition of 33.6% of the shares in Newheight Holdings. This acquisition in 2012 gave Walmart corresponding rights over Yihaodian, one of China’s best-known e-commerce supermarkets, through a reported “variable interest entity” (“VIE“) structure….
