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 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….
1. More Deals Receive More Scrutiny Of 98 deals notified, 11 received extended CCPC review (including 4 Phase 2 reviews) – the most extended reviews ever conducted by the CCPC in a single year. While no deal was blocked outright, 5 were cleared conditional on CCPC-approved remedies, including, in one case, a business divestment remedy….
Unlike recent merger cases where the Commission looked at the concentration of data within a merged entity, the Commission’s focus in Apple/Shazam was on vertical concerns, including as a result of access to Shazam customer data. The focus was more about the potential impact on Apple’s rivals rather than whether the acquisition of data would…
In July this year, the Bulgarian Commission for protection of competition (the “Bulgarian Commission”) blocked the acquisition of the vertically integrated business of CEZ Group of companies (owned by CEZ a.s., Czech Republic) in Bulgaria by Inercom EAD (Bulgaria). The refusal to approve the CEZ/Inercom transaction was discussed in a previous post. In August 2018,…
M&A and other transactions involving foreign companies might sometimes raise national security concerns in specific areas of the economy such as military, dual use, advanced technology, etc. To mitigate those concerns, national governments dealing with a great number of transactions used to establish the strategic investment regimes. In many jurisdictions, strategic investment regime requires either…
The UK’s expected separation from the European Union (EU) on 29 March 2019 (Brexit Date) will re-cast the process by which parties pursuing global mergers secure their antitrust approvals. It will also reshape the potential exposure that parties face when subjected to global investigations of anticompetitive conduct. As Brexit rapidly approaches, businesses increasingly seek guidance…
The contemplated acquisition of Nova Broadcasting Group AD by PPF TMT Bidco 2 В.V (the latter entity and its economic group hereinafter referred to as “PPF”) along with a separate acquisition of the vertically integrated business of CEZ Group of companies (owned by CEZ a.s.) by the Bulgarian company Inercom EAD have been making the…
On August 27, 2018, the Turkish Competition Authority (“TCA”) announced that it had unanimously cleared the acquisition of one of the largest retailers of various products such as books, periodicals, music, electronics, accessories, video games and toys (“D&R”) by another retailer & wholesaler of the relevant products (“TveK”).[1] Furthermore, the group of companies to which…
At the beginning of August 2018, the Bulgarian Commission for Protection of Competition (“BCPC”) opened proceedings against a local company for non-notification of an acquisition of another undertaking. Such proceedings are very rare, and the last fine for a similar breach in Bulgaria was in 2012. The undertaking acquiring control – Agria Group Holding AD…
Document requests issued by the EU Commission (EC) have become common in complex EU merger cases. A few years ago, the EC would only ask for several hundred documents in such cases – now it has become standard to request several hundred thousand documents from each of the parties to the transaction, often within a short time period (once…
