The European Commission (“Commission”) launched a consultation process on 20 June 2013 to seek views on new proposals for the European Union Merger Regulation (“EUMR”), which aim to improve merger control in the EU by increasing the scope of the EUMR and streamlining some of its processes.
The main proposed change is an extension of the EUMR regime to cover minority shareholdings or “structural links” currently escaping mandatory EUMR notification because they involve no acquisition of control over the target business. The Commission believes that it has identified a gap in its powers to protect competition on the basis that it is unable to regulate structural links which may have anti-competitive effects and that extended enforcement of its merger control rules is the way to close that gap.
The new proposals are merely a consultation draft and it is not certain that the current rules will be amended in this way. However, a reinforced EUMR regime would have a major impact on M&A activity, with more transactions caught and a greater need for consideration of EUMR issues in the early stages of deal negotiations.
Additionally, the Commission is proposing to reduce the burden on merging businesses by streamlining the referral mechanism by which they can refer a merger to the Commission which would not normally be caught by the rules. The proposals include the option to refer directly to the Commission a merger that would be notifiable in three Member States, without first consulting the Member States.
Further information about the Commission’s proposals on the referral mechanism, together with the proposed significant widening of the scope of the Commission’s powers of review under the EUMR, and their potentially controversial implications, can be found here. Businesses have until 12 September to make their views heard.