European Commission Adopts Changes to EU Merger Rules: One Step Forward, Two Steps Back

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The European Commission (the “Commission”) recently adopted a number of revisions to the EU Merger Regulation intended to streamline and speed up the EU merger review process. The new rules will enter into force on January 1, 2014. The stated purpose of the revisions is to reduce the administrative burden and cost for business. In reality, however, some of the revisions will significantly increase the burden on the parties who notify mergers to the Commission (the “Notifying Parties”) and could result in delays in the review process and increased transaction costs.

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Extension of the Scope of the Simplified Procedure:

The Commission has extended the scope of the simplified merger procedure, which allows the Notifying Parties to file their transactions on a notification form that seeks considerably less information than the standard Form CO. This extension is achieved (i) by raising market share thresholds for both horizontal mergers (from 15 to 20%) as well as vertical mergers (from 25 to 30%) which may benefit from the simplified procedure, and (ii) by introducing a new criterion, i.e., a merger may also be assessed under the simplified procedure when the combined market shares of the merging companies are between 20 to 50% and the increase in market concentration is less than 150 points under the Herfindahl-Hirschman Index.

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Topics:  EU, European Commission, Mergers

Published In: General Business Updates, International Trade Updates, Mergers & Acquisitions Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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