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Mergers Reg 139/2004 - Coggle Diagram

- - - - Merger takes place between actual or potential competitors in the same product and geographic market and at the same level of production
        
        Serious impact on competition
    - - Merger occurs between firms that operate at different, but complementary levels of the market for the same final product (e.g., iron ingots (upstream) to produce car parts (downstream))
        Economic efficiencies vs collusion with third-parties
    - - Merger between A and B who are neither horizontal competitors, nor functionally related vertically
        Merged entity AB could attempt to foreclose competitors in related markets
- - - - Do the merging companies have a combined aggregate worldwide turnover > € 5000M
        of all undertakings concerned
      - Is the Aggregate Union-wide turnover of each of at least two undertakings concerned > €250M
      - (!) c) unless each of undertakings concerned achieves > 2/3 of its aggregate Union-wide turnover within one and same MS [‘transnational character’]
    - - Combined aggregate worldwide turnover of all undertakings concerned > €2500M
      - In each of at least three MS, the combined aggregate turnover of all undertakings concerned > €100M
      - In each of those three MS, the aggregate turnover of each of at least two undertakings concerned > €25M
      - The aggregate Union-wide turnover of each of at least two undertakings > €100M
      - (!) unless each of undertakings concerned achieves > 2/3 of its aggregate Union-wide turnover within one and same MS [‘transnational character’]
  - - - Efficiency defence: efficiencies created, never successful
      - Failing firm defence: if A is close to insolvency, B buys it up to save jobs etc, successful
      - Emerging market defence: newly created market, sometimes successful
- - - - Operational autonomy from parent-firms
      - Operational activities beyond the activities of the parent-firms
      - Deals with the parent-firms at an arm’s length after start-up period (3 years)
      - JV intended to operate on a lasting basis
    - - Concentrative: significant integration of activities; new entity operates independently in the market
        -> substantive test of Reg applies (art.2(2)
      - Cooperative: JV itself operates as an independent business, but it can impact how the parents compete
        -> art.101 TFEU applies
- - - - after conclusion of agreement, announcement of public bid, acquisition of controlling interest
      - Prior to implementation, otherwise fined
    - - Gun-jumping = fine up to 10% of aggregate turnover, invalidity of agreement
    - - Always initial examination
      - Max 25-35 working days (Art 10)
        no decision in this time -> compatible by default
      - Commitments, modifications possible in first stage
      - Possible decisions arts-6-9
        or decison to initiate phase II
    - - ‘initiation of proceedings’ only if ‘serious doubts’ (Art 6(1)(b))
      - Max 90 working days (Art 10)
        no decison within timeframe -> compatible by default
      - Possible decision
        
        Decision declaring concentration compatible (subject to commitments)
        
        Decision declaring concentration incompatible
        
        Referral to competent authorities of MS