LexGo

Luxembourg Competition Council willing to review and refer M&A transactions to the European Commission
04/05/2021

On 29 April 2021, following the release of the widely commented European Commission guidance on Art. 22 of the EU Merger Regulation (EUMR), the Luxembourg Competition Council published a statement on the recent policy change.

In addition to explaining the key characteristics of the European Commission referral notice, the Competition Council made the following noteworthy comment:

Crucially, the Commission also confirms in its Notice that a referral remains possible where the requesting Member State has not put in place a specific national merger control regime, which is the case for the Grand Duchy of Luxembourg. Following the Notice, the [Luxembourg] Competition Council is now more encouraged to use Article 22 to refer a merger to the European Commission when there is an effect on trade between Member States and a threat of a significant effect on competition in the country.”

A link to the full comment (in French) can be found here_

Implications

The statement of the Competition Council shows strong support for the EU Commission policy change, and signals a willingness to initiate the review and preliminary assessment of potentially problematic transactions. Where a transaction referred to the EU Commission is ultimately found to be incompatible with EU competition laws, EU authorities may decide to unwind the transaction or impose other remedies that sufficiently address the competition concerns. This (new) transaction risk has significant repercussions for M&A activity across the European Union, including in Luxembourg.

As discussed in more detail in the earlier newsletter linked above, three immediate consequences for M&A transaction planning arise:

  1. M&A documentation. Conditions precedent should note the possibility and potential consequences of a referral request under Art. 22 EUMR. Where competition law questions arise, it should also be agreed which party is obliged and bears responsibility for merger control clearance (by means of “best effort” or even “hell or high water” clauses).
  2. Substantive competition law assessments. Transactions should be analysed as to their potential local impact in EU Member States – regardless of (i) their size and (ii) whether they meet notification thresholds. In addition to multi-jurisdictional filing assessments, substantive analyses may need to be made.
  3. Proactive engagement with authorities. Where questions arise as to the impact of a transaction on competition in an EU Member State, it may be necessary to proactively inform the competent authorities in order to exclude, or at least minimise, the risk of a referral. This is especially advisable where there is potential for a “tip-off” or complaint by a third party

Related : Arendt ( Mr. Philippe-Emmanuel Partsch )

[+ http://www.arendt.com]

Mr. Philippe-Emmanuel Partsch Mr. Philippe-Emmanuel Partsch
Partner
[email protected]

Click here to see the ad(s)
All articles European Law

Lastest articles European Law

The CJEU extends Achmea to intra-EU Energy Charter Treaty arbitrations
02/09/2021

In a judgment dated 2 September 2021 in Komstroy v Moldova (Case C-741/19), the Court of Justice of the Eur...

The CJEU extends Achmea to intra-EU Energy Charter Treaty arbitrations Read more

Draft revised vertical regulation and guidelines
19/07/2021

The European Commission takes a hard line against online platforms, dual distribution and MFNs

Draft revised vertical regulation and guidelines Read more

General Court of the CJ annuls State aid decision in Amazon case
13/07/2021

The case concerned the arm’s length nature of a royalty paid by a Luxembourg operating company (LuxOpCo) to a L...

General Court of the CJ annuls State aid decision in Amazon case Read more

Favourable CJEU clarification on the VAT exemption for fund management services
22/06/2021

On 17 June 2021, the Court of Justice of the European Union (CJEU) rendered its judgment in joined cases K (C-58...

Favourable CJEU clarification on the VAT exemption for fund management services Read more

Lastest articles by Mr. Philippe-Emmanuel Partsch

Luxembourg Competition Council imposes highest ever fine for resale price maintenance agreements
26/11/2020

Luxembourg Competition Council imposes highest ever fine on Bahlsen and supermarket chains Cactus, Auchan and Delhaize for...

Read more

Brexit will happen tonight. What next?
31/01/2020

At midnight tonight Luxembourg time, the United Kingdom will leave the European Union. For business in the EU and the UK, ...

Read more

European Supervisory Authorities - Legality and judicial control of their activity
10/12/2019

On 4 December 2019, the French Conseil d'Etat, at the request of the French Banking Federation, referred important que...

Read more

Towards a single European market on private pensions - the Pan-European Personal Pension Product
05/08/2019

Saving for retirement will soon be facilitated by a personal pension product with truly pan- European characteristics. On ...

Read more

LexGO Network