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
The European Commission boldly announced its 2013 merger simplification package with the headline “Commission cuts red tape for businesses.” Nearly two years on , further refinement of the Commission’s procedures is needed to reduce the information required to be included in notification Form CO, and so shorten the time needed to “start the clock” on…
On 12 November 2015, Ukraine’s Parliament adopted in the first reading a bill amending the merger control rules. This initiative addresses most of the problems that had been requiring an adequate solution for a long time yet remained disregarded till now. A brief overview of the contemplated novelties is provided below. Financial Thresholds Increase The…
We have recently celebrated the 25th anniversary of the EU Merger Regulation, which came into force on 21 September 1990. Since that date, we have seen an exponential growth in merger control notifications at the European level – at least up until the financial crisis that began in 2008. The good news is that, to…
On 30 September 2015, the Act on Control of Certain Investments (the “Act”) enters into force. The Act aims to create mechanisms to protect against hostile takeovers of companies operating in key sectors of Polish economy. According to the Act, prior to the acquisition of shares of strategic companies (including the acquisition of proprietary interests…
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…
