On 20 June 2013, the EC announced a consultation on whether to extend the EU Merger Regulation (EUMR) rules to cover the acquisition of non-controlling minority shareholdings by one competitor in another or between companies in a vertical relationship.
The EUMR requires pre-merger filing and clearance of large mergers in the EU. One option that is proposed is simply to extend this system to non-controlling minority shareholdings. This would mean that all such shareholdings would have to be notified to the EC in advance and could not be implemented before the EC had cleared them.
The proposal potentially has wide implications. In addition to applying to transactions between trading companies, the EUMR applies to transactions by investment funds, and all investee companies managed by a management company are treated as forming part of that company’s group. Therefore, the proposal could catch an investment company building up minority stakes in a number of competing businesses, even if through different funds that it manages.
The consultation closes on 20 September 2013.