Brussels aims to widen net to vet more mergers
EU proposals call for lower referral thresholds
Thursday 11 July 1996
The move to draw more mergers and takeovers into the Brussels net enjoys strong backing from industry, but is expected to run into tough opposition from governments who must approve the plans. Germany, in particular, rejects any extension in the competition powers of the Commission and others are expected to baulk at surrendering significant ground in such a sensitive area.
Mr Van Miert has complained repeatedly that many corporate agreements with Europe-wide impact in key sectors are escaping proper scrutiny because the thresholds for referral are too high. His plan hinges on lowering the financial thresholds which trigger Commission involvement.
Crucially, he is also proposing that Brussels be given automatic power to rule on link-ups that require clearance by three or more national competition authorities. This is described by officials as a "fall-back position" in the event that ministers reject the lower thresholds.
Under the 1989 EU merger regulation, the Commission's involvement is limited to deals involving combined global turnover of 5bn ecus (pounds 4bn),where the combined turnover of at least two of the merging companies is 250m ecus inside the EU. The proposal is to lower these thresholds to 3bn ecus and 150m ecus respectively.
For mergers involving three or more competition authorities the thresholds would be lowered to 2bn ecus for total world-wide turnover and 100m ecus for turnover within the EU.
A spokesman denied the plan amounted to a demand for more powers. Instead it would provide companies with a "one-stop shop", alleviating the burden of multiple notifications, offer a quicker response rate and greater legal security. Critics, however, suggest that the Commission's merger taskforce would be unable to cope with the big increase in numbers of referrals.
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