The EU Commission adopted measures on 5 December 2013 to simplify its merger notification process under the EU Merger Regulation, Council Regulation EC No. 139/2004.
We reported on these measures in more detail in our client briefing, which can be accessed here.
In summary, these reforms represent good news for business. They usher in a lighter touch policy by the Commission for non-problematic merger cases which will result in a simpler notification process, help reduce costs, and may in practice enhance the chance of quicker clearance decisions within the statutory framework. The merger simplification package is effective from 1st January 2014.
The more controversial proposals to extend the scope of the EU Merger Regulation to vet the acquisition of minority shareholdings have been postponed.
Changes to the Simplified Procedures
The proposed changes will lead to an amendment to the Commission’s Notice on Simplified Procedures under Council Regulation No. 139/2004 (see 2005/C56/04).
Having used the simplified process for some years now the Commission feels that with the benefit of its experience it can now expand the scope of the simplified procedure if the following conditions are satisfied:-
for markets in which two merging companies compete (horizontal mergers) mergers below a 20% combined market share will qualify (instead of 15% at present)
for vertically related mergers namely those where one of the companies sells an input to a market where the other company is active, mergers below a 30% combined market share (instead of 25% at present)
The simplified procedure can now be used if the combined market share of the two merging companies are between 20-50% but the increase in market share due to the merger is small.
Amendments to the EU Merger Implementing Regulation
The reforms will also result in the amendment of the EU Merger Implementing Regulation, Commission Regulation No. 802/2004, which sets out detailed procedures in relation to the form and content of notifications required under the EU Merger Regulation itself. Under the reforms the information required to notify a merger to the Commission will be reduced not only for cases under the simplified procedures but also all other cases as well.
The reforms will make it simpler for merging companies to ask the Commission for waivers of the notifying parties’ obligations to produce certain information which may not be required in the context of a particular case. Also reduced information required from companies that are seeking referral of a case with the ambit of the EU Merger Regulation from the Commission to a particular Member State or vice versa.
Standard Commitment Texts
Parties can offer commitments to the Commission to address a competition issue inherent in a particular merger to gain conditional clearance. To assist in this process the Commission has just published a number of model commitment texts designed to assist parties in securing merger clearance faster for mergers where there may be one or more outstanding competition issues which can be resolved by way of commitment. These update texts were previously proposed by the Commission in 2003.
These new commitments are designed to be used by parties offering to divest assets and for the establishment of a mandate for a trustee who will monitor the implementation of the commitments. The use of these model texts are voluntary but it is hoped that it will make it easier for parties to design commitments that effectively address competition concerns.