DAMITT has observed an across-the-board increase in the average duration of significant EU Merger investigations: Phase I remedy cases resolved in Q1 2021 averaged 10.5 months; while Phase II investigations averaged 17.3 months.
EU Phase II Proceedings
The average duration of Phase II investigations resolved in Q1 2021 stands at 17.3 months, which is well above the prior 2015 annual record of 15.6 months over the 2011-2020 period tracked by DAMITT. On a rolling 12-month basis, the average duration of Phase II investigations of 15.7 months is slightly down from the average of 16.0 months in the previous rolling 12-month period.
The high average duration for Phase II investigations resolved in Q1 2021 is largely attributable to the EssilorLuxottica/GrandVision investigation, which lasted 20 months from announcement to clearance. The investigation was suspended for a total of 160 working days, in part due to the complexity of carrying out a market investigation during a lockdown. This is the longest EU clock stoppage observed by DAMITT since 2011. The 2021 average duration will be pushed up by at least two further Phase II investigations, which were hit by long suspensions. The Air Canada/Transat investigation (which came to an end in early Q2 2021 following the parties’ withdrawal) was suspended for more than 100 working days. In addition, the ongoing Phase II investigation in Hyundai Heavy Industries Holdings/Daewoo Shipbuilding & Marine Engineering has already been on hold for more than 200 working days.
In contrast, the average duration of pre-notification contacts (i.e., from announcement until notification) of Phase II investigations concluded in the rolling 12-month period ended Q1 2021 decreased by seven percent compared to the previous rolling 12-month period.
Of note, the ill-fated Fincantieri/Chantiers de l’Atlantique merger, which was ultimately abandoned, has been excluded from DAMITT duration statistics. The transaction is very much an outlier: At the time of its withdrawal, 49.7 months had elapsed since the transaction was announced. This included a clock stoppage of 216 working days during the Phase II investigation. The transaction was highly politicized due to the majority stake owned by the French State and faced considerable opposition from local politicians and trade unions. These exceptional circumstances warrant the exclusion of Fincantieri/Chantiers de l’Atlantique from our statistical analysis.