Cornerstone Research Launches New Report on Merger Enforcement at the European Commission

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Report shows trends in merger control activity over the last decade.

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"The second quarter of 2020 . . . seems likely to show a marked decline in the number of notifications as deals are delayed or abandoned during the COVID-19 pandemic.” - Cornerstone Research Senior Vice President Peter Davis

Cornerstone Research released today a new report, Trends in Merger Investigations and Enforcement at the European Commission, which examines patterns in merger investigations and enforcement activity by the European Commission between 2010 and 2019.

The inaugural edition of the report shows that the deal value of transactions subject to merger enforcement has increased significantly over the past decade. In the 2015–2019 period, 86 per cent of mergers that were either cleared with commitments or blocked had a deal value greater than €2 billion. This is up from just 58 per cent between 2010 and 2014.

Almost 80 per cent of transactions were cleared under a simplified procedure in 2019, marking a 10-year high. Under the simplified procedure, mergers that are unlikely to raise competition concerns are assessed by the European Commission under a more streamlined notification process. The share of transactions that were not subject to this simplified procedure has halved since 2010.

“The number of notifications in the first quarter of 2020 remains at broadly the same level as the first quarter of 2019,” noted Cornerstone Research Senior Vice President Peter Davis, who heads the firm’s European competition practice. “The second quarter of 2020, however, seems likely to show a marked decline in the number of notifications as deals are delayed or abandoned during the COVID-19 pandemic. We will be monitoring these developments and their impact on merger enforcement and litigation.”

Highlights

  • Based on analysis of available deal value information, which includes 51 per cent of transactions that were subject to enforcement between 2010 and 2019, the median deal value of transactions between 2015 and 2019 was €10,350 million. Over the 2010–2014 period, the median deal value was just €3,221 million.
  • The manufacturing sector accounted for the largest shares of notifications, phase II investigations, and blocked transactions during 2015–2019.
  • Between 2010 and 2019, the Commission rejected nine requests for the matter to be referred to national competition authorities. Of these, one was blocked, five were cleared with commitments, and three were cleared without commitments.
  • The average length of a phase I investigation under a simplified procedure has declined. Between 2010 and 2013, a decision under a simplified procedure took 22 business days on average. Since the change in merger regulations in 2014, the average number of days dropped by almost 15 per cent to 19 days.

About Cornerstone Research

Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm works with an extensive network of prominent academics and industry practitioners to identify the best-qualified expert for each assignment. Cornerstone Research has earned a reputation for consistent high quality and effectiveness by delivering rigorous, state-of-the-art analysis for over 30 years. The firm has more than 700 staff and offices in Boston, Chicago, London, Los Angeles, New York, San Francisco, Silicon Valley, and Washington, DC.

See Cornerstone Research’s website for more information about the firm’s capabilities in economic and financial consulting and expert testimony.

http://www.cornerstone.com
Twitter: @Cornerstone_Res

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Carine Campbell

Elisabeth Gaubinger
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