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 a press release dated 3 July 2015, Competition Commission of India (CCI) has clarified the scope of amendments made to the Regulations relating to Combinations. The amendments touch upon several procedural changes to be followed in case of filings by imparting more flexibility to the parties. A noteworthy aspect of the amendment is the…
Mark Katz and Jim Dinning, Davies Ward Phillips & Vineberg LLP, Toronto, Canada This Note provides an overview of the notification requirements that apply to certain mergers, acquisitions and other business combinations under Part IX of the Competition Act. It first considers the type of transactions that require notification and the thresholds that apply. It…
The Council of Ministers of the Common Market for Eastern and Southern Africa (“COMESA”) has adopted an amendment to the COMESA Competition Rules on the Determination of Merger Notification Thresholds. Companies now have greater clarity as to when they will be obliged to notify mergers under the regional competition law regime in operation across the…
In early November 2014 the Antimonopoly Committee of Ukraine made a statement, announcing that it was going to reconsider its position on the establishment of VimpelCom Ltd., which led to consolidation of the assets of Kyivstar JSC and Ukrainian Radio Systems JSC (the URS) in Ukraine in 2010. As the result of the transaction, Kyivstar…
In an earlier post, of 2 December 2014, in which I reviewed the Competition and Markets Authority’s (“CMA”) draft annual plan for 2015/2016, I observed that (as of that date) the CMA had not, since assuming the functions of the Office of Fair Trading and Competition Commission on 1 April 2014, opened a Phase II…
The Competition and Markets Authority (“CMA”) has recently published its draft Annual Plan for 2015/2016, its second year of operation after assuming the functions of the Competition Commission and the competition functions of the Office of Fair Trading (“OFT”) on 1 April 2014. Together with a Strategic Assessment of the risks that consumers and markets…
General overview of the key merger control regimes in Canada Competition Act Canada’s Competition Act (the Act) authorises the Commissioner of Competition (the Commissioner) to challenge merger transactions that are likely to prevent or lessen competition substantially in a relevant market affecting Canada. The Commissioner heads the Competition Bureau (the Bureau) which is responsible for…
The recent practice of the President of the Office of Competition and Consumer Protection (the “OCCP”) shows that conditional clearance decisions are becoming more common. In 2014, the OCCP issued four conditional merger decisions, which is more than the total number of conditional decisions issued in 2012 and 2013. In this post we will discuss…
Just over a year ago, I wrote (rather extensively) on the European Commission’s public consultation entitled “Towards more effective EU Merger Control” in which the Commission proposed to (i) expand its powers to review non-controlling minority interests and (ii) streamline the case referral system between the European Commission and NCAs (see here). Our regular readers…
On 15 August 2014, the Competition and Markets Authority (“CMA”) approved Alliance Medical Group’s completed acquisition of IBA Molecular’s radioactive medical tracer business. Although IBA’s business was loss-making, would have exited the market and there was no other credible buyer for it, the CMA refused to apply the ‘failing firm’ (or ‘exiting firm’) defence, as…
