Europese Commissie stelt richtlijnen "niet-horizontale" fusies vast (en)

The European Commission i has adopted Guidelines for the assessment of mergers between companies that are in a so-called vertical or conglomerate relationship (also known as "non-horizontal mergers"). Such mergers are aimed at broadening a company's activities either by merging with a company at another level of the supply chain (vertical merger) or with a company active in a related market (conglomerate merger). The Guidelines will provide guidance to companies as to how the Commission will analyse the impact of such mergers on competition.

Competition Commissioner i Neelie Kroes i said: "These Guidelines show once more the Commission's commitment to providing clear and predictable guidance for businesses. The majority of vertical and conglomerate mergers do not raise problems, and they can bring about efficiency gains that benefit both businesses and consumers. However, the Commission will act decisively to prevent transactions that ignore the clear indications in the Guidelines of the types of mergers that can harm competition and consumers. ."

The non-horizontal Merger Guidelines complement the existing Guidelines on horizontal mergers (see IP/03/1744 ), which deal with mergers of companies who compete on the same markets. Non-horizontal mergers include vertical mergers, such as the acquisition of a supplier by a customer, for example a steel manufacturer acquiring a supplier of iron ore, and conglomerate mergers, which concern companies whose activities are complementary or otherwise related, for example, a company producing razors buying a company producing shaving foam.

Horizontal mergers - i.e. those between competitors on a particular market - can lead to a loss of direct competition between the merging firms. By contrast, vertical and conglomerate mergers do not immediately change the number of competitors active in any given market. As a result, the main potential source of anti-competitive effects in horizontal mergers is absent from vertical and conglomerate mergers. They are thus generally less likely to create competition concerns than horizontal mergers. In addition, vertical and conglomerate mergers may also improve a company's efficiency by better co-ordinating their different production stages.

On 13 February 2007, the Commission launched a public consultation on the draft guidelines (see IP/07/178 ). In response, thirty two papers were submitted by various stakeholders. The vast majority of respondents supported the issuing of guidelines. Most commentators also acknowledged that the draft represented the state-of-the art of the established economic literature in the field. In addition, the consultation produced a number of valuable comments on individual sections of the draft, which have been taken into account in the final text.

The Guidelines provide examples, based on established economic principles, of where vertical and conglomerate mergers may significantly impede effective competition in the markets concerned. For instance, they outline the circumstances under which a vertical merger could be likely to result in competing companies being denied access to an important supplier or facing increased prices for their inputs and thus ultimately lead to higher prices for consumers.

To take a concrete example, the energy sector is one area where vertical and conglomerate issues can be of concern, as illustrated by the Commission's decision to prohibit the proposed takeover of GDP by EDP and ENI (see IP/04/1455 ) - the merger of the electricity and gas incumbents in Portugal could, for example, have created considerable obstacles to new entrants to the Portuguese electricity market using gas-fired power stations. Another recent example is the acquisition of Pfizer's Consumer Healthcare division by Johnson & Johnson (see IP/06/1726 ). Without the divestiture remedies imposed by the Commission, the transaction would have given J&J control over key inputs for nicotine patches produced by its main competitor, GSK. Consumers attempting to quit smoking could as a result have suffered higher prices and less innovative products for their nicotine replacement therapy.

The Guidelines also indicate levels of market share and concentration below which the Commission is unlikely to identify competition concerns (so-called "safe harbours"). This will help interested parties to identify such mergers more easily.

The text of the Guidelines is available on the Commission's website at:

http://ec.europa.eu/comm/competition/mergers/legislation/legislation.html

The Guidelines will also be published in all (official) EU languages in the EU's Official Journal.