Merger control plays an important role in the regulatory landscape for M&A deals especially where there is an appetite for strategic deals that result in industry consolidation. Experienced advisers can help ensure a smooth process through the merger control process, which can be both lengthy and costly.
Following our insights issued in and , we continue to report on an annual basis on the five-year trend in merger cases filed with the EC (based on the latest decision date). Key trends in the current period include:
Following a broadly consistent level of filings between 2016 and 2018 of around 360, the number of merger cases reviewed by the EC increased in 2019 to 391. The number and proportion of filings that are full form filings remains lower than 2016 and 2017, however.
The manufacturing sector continued to account for more than half of (257) of the 476 full form filings over the five-year period, with 59 (23%) of those cases requiring remedies (46 at Phase 1 and 13 at Phase 2).
Other sectors with a relatively large number of filings include:
Over the five-year period, seven cases have been prohibited with the three more recent cases relating to traditional heavy industries. The other four cases were in admin and support services, quarrying and telecommunications.
Two of the seven cases proposed non-traditional divestment remedies: five cases proposed divestment remedies and one behavioural remedies which the EC stated did not go far enough to address its concerns.
Over the last five years of the merger cases receiving conditional approval, there have been 29 (28%) cases that have seen remedies agreed by more than one merger control regulator – 20 were EC Phase 1 cases and nine EC Phase 2 cases.
In terms of the number of mergers clearing subject to remedies agreed with multiple regulators the highest have been:
The percentage of cases cleared with remedies at Phase 1 reduced from around 20% in 2018, to 14% in 2019. Meanwhile, the percentage of Phase 2 cases cleared with remedies increased to 86% in line with 2015. In 2019 all cases bar one, which was prohibited, were cleared subject to remedies.
Over the five-year period, divestment remained the most popular remedy, in line with the Commission's viewpoint as set out in its EC Merger Regulation. Upfront buyer requirements saw an increase in 2019 but still only required in 19% of remedies.
In respect of non-traditional divestment remedies, the use of remedies which remove links with competitors and other third parties continues in a small number of cases. Other non-traditional divestment remedies include creating access to networks used in the telecoms sector which has experienced significant consolidation in the period.
We have acted as monitoring trustee in more than 80 cases, reporting to the EC and another 19 different regulators. This work has included monitoring standard and complex divestment and behavioural commitments. We have also acted as monitoring trustee in a number of multi-jurisdictional cases reporting to multiple regulators. Our approach to the monitoring trustee role is with a view to being pragmatic, commercial and able to guide you through the process without excessive demands or disruption to your day-to-day operations.
If you would like to understand more about our monitoring trustee services, including our experience in advising on governance and control required to ensure adherence to interim measures, please contact Craig Reed.