Schneider-LeGrand merger

Résumé du document

Beginning with a certain turnover, the EU merger rules are to be applied to cross-border concentrations, irrespective of the size of the company or area of their activity. A pre-merger notification to the European Commission is obligatory. Most cases are closed by the completion of the phase I, which lasts approximately six weeks. Only a small percentage (5%) passes into the phase II, which means another four months time of investigation. The final decision is then subject to juridical review by the Court of First Instance (CFI) and European Court of Justice. At the beginning of the new millennium high-profile cases have called attention to the differences in approach between the competition authorities. On 16 February 2001 the Commission received a notification of a merger plan of Schneider Electrics who wanted to acquire Legrand by way of an exchange of shares announced on 15 January 2001. The offer involves a concentration of all the shares of Legrand and according to the Merger Regulation that demonstrates an acquisition of sole control.

Extraits

[...] 72/21/EEG, Continental Can Co Inc, Pb L 7/25, Available at: http://europa.eu.int/eur- lex/lex/LexUriServ/LexUriServ.do?uri=CELEX:31972D0021:NL:HTML; - EU competition policy and the consumer, Luxembourg: Office for Official Publications of the European Communities - ECJ 14 February 1978, United Brands CO en United Brands Continental BV/Commission, C-27/76, 65; - ECJ 13 February 1979, Hoffman-La Roche & Co AG/ Commission, C-85/76. Available at : http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEX numdoc&lg=en&numdoc=61976J0085 - Financial Times, London, October - Kemp, J. (n.d.). The European Union and competition policy. European Economic Integration, (no publisher info, document supplied in class) - Levy, N. (2005). Mario Monti's Legacy in EC Merger Control. [...]

[...] His achievements in this field include: - The provocation of wide-ranging debate on the objectives of merger control - The adoption of Horizontal Merger Guidelines that provide a clear and consistent analytical framework for the application of the merger regulation - The appointment of a Chief Economist and increased emphasis given to the mainstream economics - The acknowledgement of the positive role played by merger-related efficiencies - The implementation of measures that provide checks and balances on decision-making - The application of a more sophisticated and elaborate remedies policy. Thanks to these changes, the EC's merger control practice is more systematic, complex and challenging. It also might be seen as more coherent and thus more predictable for the companies willing to merge Bibliography - Bannerman, E. (2002). The future of European Competition Policy. Available at: http://www.cer.org.uk/pdf/P297_competition_policy.pdf - Christiansen, Arndt. (2002). [...]

[...] The Horizontal Merger Guidelines are more specific in stating “this will be the case when the Commission is in a position to conclude on the basis of sufficient evidence that the efficiencies generated by the merger are likely to enhance the ability and incentive of the merged entity to act pro-competitively for the benefit of consumers, thereby counteracting the adverse effects on competition which the merger might otherwise have[3]. However, the Guidelines immediately admit that it is highly unlikely that a concentration leading to a dominant position of an undertaking will be compatible with the common market even if its efficiency the ground that its efficiency gains would be sufficient enough to counteract its potential anti-competitive effects”. The greater attention paid to post-concentration efficiencies was not the only substantive change that Mr. Monti has brought in. [...]

[...] It has the power to collect evidence, conduct hearings and make recommendations for approval. Therefore, it should be clear to companies planning to perform large-scale mergers (domestic/transatlantic) that the dimensions of US authorities might differ from the one in Europe. European authorities prohibit mergers that “create or strengthen” a dominant position whereas the US forbid mergers that “substantially lessen” competition and protect the competitive process. Many experts have expressed their views as to analyze whether the European competition policy works well and what changes could be made. [...]

[...] - Slim bureaucracy and very tight timetables, once viewed as the merger task force (MTF) biggest strengths, are nowadays in the light of increasing number of rejected mergers seen as an important weakness. MTF is simply said to have a lack of employees that could profoundly examine all the relevant arguments given the sort deadlines dedicated to each case. - MTF is accused to have an insufficient economic expertise. The most of the merger section are lawyers, only a dozen economists. As a consequence the EC relies too much on narrow legal points and doesn't take into consideration broader economic reality. [...]