Van Miert revises plan for merger thresholds

Date: 11/07/1996

By Tim Jones

REALISING he was getting nowhere fast in his bid to investigate more company mergers, Competition Commissioner Karel Van Miert has lowered his sights.

His original plan to reform the 1989 Merger Regulation, set out in a Green Paper published at the end of January, concentrated on lowering the thresholds at which the European Commission became the sole body responsible for vetting mergers.

At the moment, the Commission has exclusive powers to investigate mergers when the combined sales revenue of the companies world-wide is 5 billion ecu or more, and that of at least two of the companies involved in the deal is 250 million ecu within the EU.

In January, Van Miert called for the thresholds to be lowered to 2 billion ecu for global sales and 100 million ecu inside the EU, which would have resulted in up to 80 more cases a year for the Merger Task Force.

However, fierce opposition, particularly from Germany - which is already critical of the Commission's 'political' decision-making in merger cases - meant this plan was dead in the water.

In a revised plan agreed by the Commission yesterday (10 July), Van Miert is now prepared to accept a global sales threshold of 3 billion ecu and 150 million ecu for intra-EU turnover.

Winning member states' backing will be far from automatic, however, given that market developments alone are bound to increase the workload of the task force in the coming years.

Companies are using mergers increasingly often to win footholds in every part of the single market. A survey by accountancy firm Price Waterhouse published this week found that among Europe's top 500 companies, 45&percent; were intending to grow by acquisition over the next year.

Talks with member states have resulted in greater agreement on the need to address the problems caused whenever a concentration falls under the jurisdiction of many authorities.

Although Van Miert's new proposal may well run into a roadblock, one area where his reforms should sail through is over time-limiting investigations into the growing number of joint ventures. He believes they should benefit from the same deadlines as mergers - a month-long initial inquiry then, if necessary, a four-month in-depth investigation.