Overview of the Merger Review Process: An Excerpt from Merger Enforcement at the European Commission
The parties to a transaction with a turnover exceeding the thresholds defined in Article 1 of the European Council Merger Regulation No 139/2004 must notify the Commission prior to the transaction’s implementation and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest.
Phase I Investigations
Upon notification, phase I of the investigation commences. During phase I, the Commission has 25 working days (35 days if the parties offer commitments) to assess whether the transaction is compatible with the internal market. Typically, at the end of phase I, the Commission may (i) unconditionally clear the merger, (ii) approve the merger subject to remedies, or (iii) open a more in-depth phase II investigation.
Phase II Investigations
Once the Commission has triggered a phase II decision, the Commission has 90 working days to make a final decision on the compatibility of the proposed merger with the Merger Regulation. However, if the parties offer commitments at this later stage, the Commission has an additional 15 days. Parties may also seek additional extensions of up to 20 working days. If the Commission determines that the notifying parties have not provided information that it requested from them, the Commission has the right to “stop the clock” until it is satisfied that the necessary information has been provided.
Mergers that are unlikely to raise competition concerns may be assessed under a “simplified procedure”, and if so, the Commission may issue a clearance decision. A horizontal merger may qualify for a simplified procedure if the combined market share is below 20 per cent. A vertical merger may qualify if the parties’ individual or combined market shares (in either the upstream, the downstream, or both markets) are below 30 per cent.
Furthermore, as of 2014, a transaction may qualify for a simplified procedure if the combined market share of two merging companies is between 20 per cent and 50 per cent, but the increase in market share due to the merger is small.