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 August 5, 2022, the Italian Parliament adopted the 2021 Annual Law for Market and Competition (the “2021 Competition Law”), [1] the aim of which is to adapt the Italian system to EU competition rules and policies and to improve and liberalize markets affected by regulatory or economic barriers. The law reflects most of the…
As in most jurisdictions, the Portuguese Competition Act (‘PCAct’) provides for an ex-ante merger control regime, according to which concentrations above certain thresholds are subject to mandatory pre-notification. Three alternative thresholds apply i) a turnover threshold, ii) a standard market share threshold and iii) a de minimis market share threshold (see Article 37 of the PCAct)….
Background The recent proliferation of foreign direct investment regimes (“FDI”) in Europe baffles practitioners and deal makers alike. Why is my acquisition of, say, a developer of grapes in Spain potentially subject to CFIUS-like rules? Can my carefully crafted leveraged buyout of a niche Polish producer of NFTs derail out of national security concerns because…
We are continuing with our competition law issues of the International Law Talk Podcast. Two weeks ago, I talked to Oliver Bretz, founding partner at Euclid Law and a merger expert, about the fragmentation of EU merger control. We focused particularly on the changes in the EU one-stop-systems through Brexit, the increasing use of EU…
Introduction On 20 May 2020 the Dutch competition authority (“ACM”) conditionally cleared a new joint venture between transport company Pon Netherlands B.V. (“Pon”) and Dutch rail operator NS Groep N.V. (“NS”) creating a Mobility as a Service (“MaaS”) platform. The case was referred to the ACM by the European Commission (“Commission”) under Article 9 of…
The Davies Forecast of Top 5 Trends and Issues for Canadian Competition Law in 2020 Jim Dinning, Anita Banicevic and Mark Katz Here is Davies’ annual forecast of Canadian competition law developments for the year ahead. 1. FOCUS ON THE DIGITAL ECONOMY Given the Competition Bureau’s stated priorities during the tenure of current Commissioner of…
Recent Developments in Canadian Merger Review: Sad Holiday Tidings for Merging Parties Charles Tingley, Anita Banicevic, Mark Katz In his own version of the pre-holiday rush, the Canadian Commissioner of Competition challenged one merger transaction just before the Christmas holidays and entered into a consent agreement to preserve assets pending his review of another. The…
There has been an important milestone in the search for more legal certainty in gun-jumping cases: On September 26, 2019, Advocate General (AG) Tanchev issued his opinion in the Marine Harvest case (C-10/18 P) and recommended that the European Court of Justice (CoJ) partially annul Marine Harvest’s gun-jumping fine. Below we take a look at…
Common ownership currently is one of the focus topics in the antitrust community. Einer Elhauge, a Harvard Law professor, has called it the “greatest anticompetitive threat of our times”. Others believe that there is no issue at all. The below gives an overview on the status of the debate and analyses the recent EU Commission…
On 16 January 2019, the Court of Justice of the European Union (“CJEU” or “Court”) dismissed the European Commission’s appeal against the annulment of its decision to prohibit the acquisition of TNT by UPS. The CJEU stressed the importance of respecting companies’ rights of defence as regards economic analysis and methodology used in merger control….
