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Acquisitions of minority interests in competitors The EU perspective Michael Reynolds Partner, Allen & Overy LLP, Brussels.

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Presentation on theme: "Acquisitions of minority interests in competitors The EU perspective Michael Reynolds Partner, Allen & Overy LLP, Brussels."— Presentation transcript:

1 Acquisitions of minority interests in competitors The EU perspective Michael Reynolds Partner, Allen & Overy LLP, Brussels

2 Introduction  At EU level, since 1990 the EC Merger Regulation (ECMR) has been the primary tool for reviewing and regulation the acquisition of minority interests  At EU national level, merger control is also primary tool  Articles 81 and 82 may catch acquisitions that escape scrutiny under the ECMR

3 EC Merger Regulation  Jurisdiction to review acquisition of minority interests  Substantive assessment of acquisitions of minority interests  Post-prohibition divestment of minority interests

4 ECMR - Jurisdiction  Commission Notice on the concept of concentration  Concepts of legal or de-facto control can catch acquisition of minority shareholdings  Aker/Kvaerner  Reductions of minority interests to avoid ECMR jurisdiction  Aker/Kvaerner  Microsoft/Liberty Media/Telewest  Microsoft/Time Warner/Thomson/Content Guard

5 ECMR - Substantive assessment  Substantive assessment of minority interests under the ECMR – main examples  the acquisition of a minority shareholding is the transaction being notified  when the target holds a minority interest in a competitor  In the latter scenario, the Commission looks beyond control to “structural links” and influence over third party competitor via the minority holding  Examples: AXA/GRE, Nordbanken/Postgirot, Thyssen Krupp, Exxon/Mobil, Volvo/Renault

6 ECMR – Post-prohibition divestment of minority interests  Commission’s analysis is influenced by the need to restore the status quo ante  Commission’s approach can be more cautious that under substantive assessment  Factual and procedural factors will influence the outcome  Examples: Tetra Laval/Sidel, Schneider/Légrand

7 EU National Merger Control  Most national regimes apply ECMR concentration test  German merger control applies to acquisitions of 25% and may catch lower shareholding through “competitively significant influence” test  UK test allows jurisdiction over acquisitions allowing for ability to exercise “material influence”  OFT has said it may examine acquisitions of shareholdings as low as 15%

8 Articles 81 and 82  Residual application to acquisitions that fall outside the ECMR  No prohibitions post-ECMR  However, Commission has indicated that it will apply Articles 81 and 82 where needed  Dresser/Ingersoll/Nuovo Pignone  T-Online

9 Acquisitions of minority interests in competitors The EU perspective Michael Reynolds Partner, Allen & Overy LLP, Brussels


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