1) Is a merger control regulation in force?

Yes. The European Union merger control regime is regulated in the Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the "EU Merger Regulation").

The EU merger control rules apply to the so-called European Economic Area (EEA), which consists of the EU member states (currently: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden) plus the EFTA countries Iceland, Liechtenstein, Norway. 

2) Which authorities enforce the merger control regulation?

The European Commission (the "Commission") is the only authority responsible for the enforcement of the Merger Regulation. Within the Commission, the Directorate-General for Competition ("DG Competition" or "DG Comp") is mainly responsible for the application of the merger control rules. 

Decisions of the Commission may be appealed to the General Court of the European Union. The decisions of the General Court may be appealed to the Court of Justice of the European Union.

3) Relevant regulations and guidelines with links:

Aside from the Merger Regulation which sets out the substantive rules, more detailed rules, and especially procedural rules, are found in the Implementing Regulation. The Commission's notices and guidelines give further insight on how these rules are to be implemented in practice. Links to the most relevant legislation, guidelines and forms are listed below:

The Commission has also published several "best practices", which are available on the DG Competition website. 

4) Does general competition regulation apply to mergers or ancillary restrictions?

Article 101 and 102 in the Treaty on the Functioning of the European Union (TFEU), which contains, respectively, the prohibition of anti-competitive agreements etc. and the prohibition of abuse of dominant market position, apply to mergers that do not meet the thresholds for merger control.

If the thresholds for EU merger control are met, generally, Article 101 and 102 cannot be applied. However, in the case of the creation of a joint venture constituting a concentration (see topic 13) the risk of coordination of the competitive behavior of the parent companies (so-called spillover) will be appraised under Article 101 TFEU within the framework of merger control.

A merger clearance decision is also deemed to cover the restrictions directly related to and necessary to the implementation of the merger – the so-called ancillary restraints. The Commission will not assess these restrictions in each individual case but companies are required to perform self-assessment using guidance provided by the Commission in the Ancillary Restraints Notice and its decisional practice.

Cases surrounded by exceptional circumstances not covered by the Ancillary Restraints Notice may justify a departure from the principles set therein. If a case presents a novel and unresolved question giving rise to genuine uncertainty, the parties may request that the Commission expressly assesses the restriction in question.

If a restriction cannot be regarded as directly related and necessary to the implementation of a merger, general competition provisions apply.

5) May an authority order a split-up of a business irrespective of a merger?

No, the Commission has no such powers.  However, if companies implement a merger, which has to be notified under the EU Merger Regulation, before merger clearance or despite a prohibition by the Commission, the Commission may order the dissolution of the merger. The same applies in case the Commission has revoked a merger clearance decision. 

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

There are no other authorities at the European Union level with competence to review mergers. Sector-specific rules are regulated at the Member State level.

Foreign investment control

Foreign direct investment is regulated at the Member State level, but the Commission has the authority to support the Member States in the screening of foreign direct investment on the grounds of security and public order, in line with Regulation 2019/452. The Commission has an advisory role by delivering its opinion to the Member State where the investment is planned, but the final decision will lie with the Member State. Investments completed after 11 April 2019 are be caught by this regime.

7) Are any parts of the territory exempted or covered by particular regulation?

The European Union merger control regime is based on a one-stop-shop principle, meaning that a notification to the Commission covers the entire territory of the European Union and renders notifications to national competition authorities of the Member States unnecessary. The regime covers the entire European Economic Area as well, meaning that it includes the EFTA countries Iceland, Liechtenstein and Norway, too.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory if the turnover thresholds are met (see topic 14).

For mergers below thresholds, a merger filing is also mandatory if the Commission accepts a referral from a member state under Article 22 and requests notification. As indicated in paragraph 24 of the Commission Guidance on Article 22 referrals of mergers by Member States, merging parties may voluntarily come forward with information about their intended transactions. The parties may do so to receive an early indication as to whether the Commission finds their intended merger a relevant candidate for a referral under Article 22 and to make the transaction “known” to the relevant authorities of the Member States, thereby triggering the 15 working days’ deadline for the Member States to make a referral request (see topic 27).

Companies designated as gatekeeper under the Digital Markets Act (DMA) (Regulation (EU) 2022/1925 of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828) are obliged to inform the Commission about their transactions in the digital sector. The Commission may use the information to invite Member States to refer cases under Article 22.

9) Is there a general definition of transactions subject to merger control?

The Merger Regulation applies to all concentrations (in this guide generally referred to as “mergers”), subject to them having a Union dimension by meeting the prescribed turnover thresholds (see topic 14).

A concentration (merger) exists where a change of control on a lasting basis results from: 

1. a merger of two or more previously independent undertakings or parts of undertakings, or 
2. the acquisition by one or more undertakings of direct or indirect control of the whole or parts of one or more other undertakings.

The establishing of a joint venture which performs all functions of an autonomous economic entity on a lasting basis constitutes a merger as well (see topic 13).

10) Is "change of control" of a business required?

Yes, a merger will only be deemed to take place if the transaction results in a change of direct control which occurs on a lasting basis (see topic 19).

11) How is “control” defined?

Control means the possibility to exercise a decisive influence on a company, i.e. have the power to determine the strategic commercial decisions of that company. Control can stem from rights (shares or assets), contracts or any other means which, separately or in combination, by law or by fact, give the possibility of exercising such influence.  

In case of multiple shareholders, veto rights of a minority shareholder regarding decisions that are essential for the strategic operation of the business – in particular the appointment of the management, the adoption of business plan and budget and major investment - can grant a minority shareholder control.

Depending on the number of undertakings exercising control over a target undertaking, control may be sole or joint. Changes from sole to joint control and vice versa as well as an increase in the number of controlling undertakings in case of joint control, are also caught by the Merger Regulation.

The Commission provides detailed guidance on the definition of control and change of control in its Consolidated Jurisdictional Notice.

12) Acquisition of a minority interest

The acquisition of a minority interest will normally not result in a change of control over the target undertaking and is therefore not caught by the EU Merger Regulation (see topic 10).

However, the acquisition of a minority interest will be subject to merger control if it de facto leads to an acquisition of control, for example, considering the distribution of the remaining shares and/or the attendance/voting patterns at the shareholders' meetings which show that the acquirer would, even with a minority shareholding, be able to exercise the decisive influence over the target undertaking.  

13) Joint ventures/joint control – which transactions constitute mergers?

Establishment of a so-called full function joint venture, i.e. a joint venture which performs all functions of an autonomous economic entity on a lasting basis, also constitutes a merger and needs to be filed to the Commission if it has a Union dimension by meeting the prescribed turnover thresholds (see topic 14). 

When assessing the full-functionality of a joint venture, the Commission will consider to which extent the joint venture depends on its parent companies and whether it has all necessary resources for an independent presence on the market. The joint venture also must operate on a lasting basis. The Commission has in its practice considered a period of eight, ten and more years to be enough in this respect. The Commission provides guidance on the assessment of these elements in its Consolidated Jurisdictional Notice.

Joint ventures which are not full-function, such as cooperative joint ventures, are not within the scope of the Merger Regulation but are governed by general competition rules). Note that a non-full-function joint venture can be subject to national merger control in some of the Member States, in particular Germany and Austria (see Member States individual chapters).

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger has a Union dimension and hence must be filed to the Commission if: 

1. the aggregate worldwide turnover of all the parties exceeds EUR 5 billion, and
2. the aggregate Union-wide turnover of each of at least two parties is more than EUR 250 million, unless
3. each of the parties achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State.

Even if the above threshold is not met, a merger will still have a Union dimension if:

1. the aggregate worldwide turnover of all the parties exceeds EUR 2.5 billion, and
2. in each of at least three Member States, the aggregate turnover of all the parties exceeds EUR 100 million, and
3. in each of at least three of these Member States, the aggregate turnover of each of at least two parties exceeds EUR 25 million, and
4. the aggregate Union-wide turnover of each of at least two parties exceeds EUR 100 million, unless
5. each of the parties achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State.

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

Whereas there are no market share, value of transaction or asset thresholds, the Commission has issued the Commission Guidance on the application of the referral mechanism set out in Article 22 to capture potentially problematic (high-value) transactions on an EU-wide basis. According to the Guidance, the Commission accepts and encourages referrals by member states in situations where the merger is notifiable neither under the Merger Regulation, nor the laws of the referring Member State(s) but there is an EU interest in reviewing the merger (see topics 25, 27). Consequently, within the EU a transaction may in principle always be subject to review by the Commission regardless of whether the applicable turnover thresholds are met.

15) Special thresholds for particular businesses

N/A

16) Rules on calculation and geographical allocation of turnover

The rules on calculation and geographical allocation of turnover are set out in the Merger Regulation and further guidance on their interpretation is contained in the Consolidated Jurisdictional Notice. 

Relevant turnover is the sale of products and the provision of services falling within the undertakings' ordinary activities after deduction of sales rebates and value added tax and other taxes directly related to turnover. Any turnover generated between undertakings that belong to the same group should be excluded (intra-group/internal sales).

Turnover is calculated based on the most recent audited accounts of the parties. It includes the turnover of any direct or indirect parent companies, subsidiaries, joint ventures and subsidiaries of parent companies. Detailed rules on which turnover must be considered and to which extent are set out in the EU Merger Regulation and are explained in the Consolidated Jurisdictional Notice. However, turnover must be adjusted to take account of any permanent changes to the businesses of the parties, such as divestments or acquisitions of businesses after the end of the financial year that are not fully reflected in the audited accounts. 

The general rule for geographical allocation of turnover is that it should be attributed to the place where the customer is located, based on the underlying principle that turnover is to be allocated to the place where competition for the customer in question takes place.

17) Special rules on calculation of turnover for particular businesses

Credit institutions and other financial institutions

Items relevant for the calculation of turnover of credit institutions and other financial institutions are: 

1. interest income and similar income; 
2. income from securities: income from shares or other variable yield securities, income from participating interests, income from shares in affiliated undertakings  
3. commissions receivables; 
4. net profit on financial operations; and 
5. other operating income. 

The Union-wide turnover or a Member State turnover of a credit or financial institution comprises the above income items received by the branch or division of that institution established in the Union or a Member State. 

Insurance undertakings

For insurance undertakings the value of written gross premiums is used in place of turnover. This consist of all amounts received and receivable in respect of insurance contracts issued by or in behalf of the insurance undertakings, including also outgoing reinsurance premiums, after a deduction of taxes and parafiscal contributions or levies charged by reference to the amounts of individual premiums or the total value of premiums. 

State-owned undertakings

For the purpose of calculating turnover of State-owned undertakings, account is only taken of those undertakings which belong to the same economic unit, having the same independent power of decision.

Investment funds

In a situation where an investment company sets up several investment funds via which it acquires indirect control over portfolio companies, the turnover of all portfolio companies held by different funds is taken into account for the purpose of assessing whether the turnover thresholds set out in topic 14 are met.

18) Series of transactions that must be treated as one transaction

If two or more transactions take place between the same persons or undertakings within a two-year period, they will be treated as one and the same merger arising on the date of the last transaction.

Additionally, more than one transaction will be deemed interrelated if they are unitary in nature and serve the same economic goal, in which case they will represent one and the same merger. The Commission provides guidance on the assessment of interrelated transactions in its Consolidated Jurisdictional Notice.

See also topic 19 regarding temporary control and successive transactions.

19) Temporary change of control

A merger within the meaning of the Merger Regulation exists only if the change of control occurs on a lasting basis (see topic 9). Therefore, in case of a transitory change of control, a merger would not exist and a merger filing would not be required. 

The Commission provides guidance on how this criterion is assessed in case of successive transactions in its Consolidated Jurisdictional Notice. An example of a temporary change of control is a situation in which one or more parties acquire control over a target undertaking but have a binding pre-existing plan to subsequently, within a short period of time usually not longer than one year, split the assets among themselves. In that case, the initial transaction would not lead to a change of control on a lasting basis and would hence not need to be notified to the Commission.

20) Special industries, owners or types of transactions

The Merger Regulation specifies that the following transactions are not mergers and hence need not to be notified to the Commission:

1. where credit institutions, other financial institutions or insurance companies whose normal activities include transactions and dealing in securities for their own account or for the account of others, hold on a temporary basis securities which they have acquired  in an undertaking with the intention to resell them, provided that they do not exercise the voting rights in respect of those securities for the purpose of determining the competitive behavior of that undertaking or exercise such voting rights exclusively with the aim of preparing the disposal of all or part of that undertaking or its assets or the disposal of those securities and  that such disposal takes place within one year of the date of acquisition; this period may be extended by the Commission if the parties show that the disposal was not reasonably possible within one year;
2. where control is acquired by an office-holder according to the national law of a Member State relating to liquidation, winding up, insolvency, cessation of payments, compositions or analogous proceedings; or
3. where the transactions are carried out by holding companies (as defined in the European Union's Annual Accounts Directive), provided, however, that the voting rights in respect of the holding are exercised with the purpose to retain the full value of the investment and not to determine the competitive behavior of that undertaking.

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All mergers with a Union dimension need to be notified to the Commission regardless of where the merging parties are registered, operate or own assets. 

22) No overlap of activities of the parties

There is no exemption for transactions with no overlapping activities, however, the notification can in those cases be submitted in a short form and a simplified procedure applies (see topic 33). 

23) Other exemptions from notification duty even if thresholds ARE met?

A merger with a Union dimension may be referred to the authorities of one or more Member States if these authorities are better placed to carry out the investigation (see topic 28).

24) May a merging party file voluntarily even if the thresholds are not exceeded?

No. A merger without a Union dimension can, however, be reviewed by the Commission in case of a referral (see topics 27 and 29).

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

The Commission cannot request a notification of a merger without a Union dimension. It can, however, substantively decide on a merger in case of referral from one or more Member States (see topic 27) or in case of a successful referral request of the notifying parties (see topic 29). The Commission takes the view that Member States may refer all mergers (as defined in the EU Merger Regulation, see topic 9) to the Commission, not only those that meet the respective jurisdictional criteria of the referring Member State(s) and encourages such referrals if there is EU interest in reviewing a transaction which is not subject to merger control in the referring Member State.

26) Referral within the jurisdiction

The EU Merger Regulation contains rules to allow the reattribution of cases between the Commission and Member States, consistent with the principle of subsidiarity, so that the more appropriate authority or authorities for carrying out an investigation should in principle deal with the case (see topics 27 and 28).

The principles for this reattribution of cases are laid out in the Commission Notice on Case Referral in respect of concentrations.

27) Referral from another jurisdiction

One or more Member States may request that the Commission evaluates a merger without a Union dimension (meaning it does not meet the turnover thresholds) if it has relevance for the EU and certain conditions are met. The Commission can also itself invite the Member State(s) to make the referral request if it considers that a merger meets these criteria.

If the Commission decides to accept the request to examine the merger, national legislation does no longer apply.

The Commission encourages and accept case referrals even if the referred merger does not meet respective jurisdictional criteria of the referring Member State(s) if the merger has EU relevance. The Commission Guidance on the application of the referral mechanism set out in Article 22 aims at allowing the Commission to review mergers involving companies that play a significant competitive role despite generating little or no turnover yet and so-called "killer acquisitions" (acquisitions of nascent, innovative companies by dominant players to eliminate future competition). 

According to the Commission this concerns in particular companies in the digital economy, sectors such as pharmaceuticals and others where innovation is an important parameter of competition and companies with access to or impact on competitively valuable assets, such as raw materials, intellectual property rights, data or infrastructure. In April 2021 the Commission accepted the first Article 22 referral on basis of the revised referral policy (Illumina / GRAIL).

The Guidance describes the categories of cases that may constitute suitable candidates for a referral in situations where the transaction is not notifiable under the laws of the referring Member State(s), and sets out the criteria that the Commission will take into account in exercising its discretion to accept such referrals as well as procedural aspects.

A referral request must be made by a member state within 15 working days of the date on which the merger is made known to the relevant Member State. A transaction is considered to have been made known to a Member State when it has information allowing it to make a preliminary assessment as to the existence of the criteria relevant for the assessment of the referral. The Commission may provide the relevant information to a Member State and invite it to refer the merger to the EU ("invitation letter").

Although there is no fixed deadline, the Commission Guidance on the application of the referral mechanism set out in Article 22 states that normally, the Commission will not accept a referral where more than six months has passed after the implementation of the merger.

When a referral request has been made, the Commission will inform the authorities of the Member States concerned as well as the parties without delay, allowing other Member States to join the referral request within 15 working days. Within 10 working days after this 15 working day deadline, the Commission will decide whether to accept the referral request or not. If a decision is not made within this deadline, the Commission will be considered to have accepted the referral request.

If the referral request is accepted, the normal merger control procedure under the Merger Regulation will start (that means pre-notification, phase I and, possibly, phase II).

Companies designated as gatekeeper under the Digital Markets Act (DMA) are obliged to inform the Commission about their transactions in the digital sector. The Commission may use the information to invite Member States to refer cases under Article 22.

28) Referral to another jurisdiction

The Commission can refer a merger with a Union dimension, in whole or in part, to a Member State under certain conditions if the merger (or the part of the merger) has primarily relevance for this Member State. 

29) May the merging parties request or oppose a referral decision?

Instead of notifying a merger with a Union dimension, the merging parties can request that is referred to a Member State if the conditions mentioned above (topic 28) are met.  The merging parties can also request that a merger without a Union dimension, that triggers a notification duty in at least three Member States may be reviewed by the Commission (One-stop-shop idea). 

A referral decision can be challenged under the general regime of judicial review of the Commission's decisions described in topic 50.

30) Stage of transaction when notification must be filed

A merger notification must be filed after a binding agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired.  However, there is no deadline for the notification. 

The merging parties may also notify a merger earlier, if they demonstrate a good faith intention to conclude an agreement (by, for example, executing a letter of intent, memorandum of understanding etc.) or, in the case of a public bid, where they have publicly announced an intention to make such a bid.

Importantly, the notification must be filed in any case before the transaction is implemented and the transaction must not be implemented before clearance. The Commission has imposed hefty fines for breaches of the standstill obligation (so-called gun jumping) in recent years (see below topics 37 and 42). 

31) Pre-notification consultations

It is customary to engage in pre-notifications discussions with the Commission, which considers the pre-notification phase to be an important part of the whole review process.  As a general rule, the Commission wishes to have pre-notification contacts with notifying parties in all cases, even if they are seemingly non-problematic.  In practice it is extremely rare that a case is notified without prior pre-notification contacts.

In the pre-notification phase the merging parties will submit a draft notification and discuss it with the case team assigned to the merger until the Commission informs the parties that the notification is ready to be formally submitted.

Exceptionally, under the super-simplified procedure, for joint ventures with no activities within the EU/EEA and for mergers with no overlaps of activities, the parties are invited to notify directly without pre-notification contacts (see below topic 33).

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified after the acquisition/publication of the takeover bid. 

The standstill obligation (see topic 37) does not prevent the implementation of a public bid or of a series of transactions in securities (including those convertible into other securities admitted to trading on a market such as a stock exchange), by which control is acquired from various sellers, provided that the merger is notified to the Commission without delay and the acquirer does not exercise the voting rights attached to the securities in question or does so only to maintain the full value of its investments based on a derogation granted by the Commission (see topic 38).

33) Forms available for completing a notification

Notifications are submitted in line with the Form CO contained in Annex I of the Implementing Regulation. 

As a general rule, the Short Form CO may be used for the purpose of notifying mergers where one of the following conditions are met:

1. two or more undertakings acquire joint control of a joint venture, provided that the joint venture has no current turnover within the territory of the European Economic Area (EEA), and the undertakings concerned have not planned to transfer any assets within the EEA to the joint venture at the time of notification;
2. two or more undertakings acquire joint control of a joint venture, provided that the joint venture has negligible activities in the EEA. This refers to mergers where all of the following conditions are fulfilled:
   • the annual current turnover of the joint venture and/or the turnover of the contributed activities as well as the expected annual turnover is less than EUR 100 million in the EEA;
   • the total value of asset transfers to the joint venture in the EEA planned at the time of notification is less than EUR 100 million;
3. the merging parties are not engaged in business activities in the same product and geographic market, or in a relevant product market which is upstream or downstream from a product market in which any other party to the merger is engaged;
4. the conditions set out below are fulfilled under all plausible market definitions:
   • the combined market share (under all plausible market definitions) of all the parties engaged in business activities in the same product and geographic market (horizontal overlap) meets at least one of the following conditions: (a) it is lower than 20 % or (b) it is lower than 50 % and the increment (delta) of the Herfindahl-Hirschman Index (HHI) resulting from the merger on this market is below 150;
   • the individual and/or combined market shares of all the parties to the concentration that are engaged in business activities in a product market which is upstream or downstream from a product market in which any other party to the concentration is engaged (vertical relationship) meet at least one of the following conditions: (a) they are lower than 30 % on the upstream and the downstream markets; (b) they are lower than 30 % on the upstream market and parties active in the downstream market hold a purchasing share of less than 30 % regarding upstream inputs; or (c) they are lower than 50 % on both the upstream and downstream markets, the increment (delta) of the Herfindahl-Hirschman Index (HHI) resulting from the merger is below 150 on both the upstream and downstream markets, and the smaller undertaking in terms of market share is the same in the upstream and downstream markets; or
5. a party is to acquire sole control of an undertaking over which it already has joint control.

A super-simplified procedure is applicable for joint venture cases with no impact on the EU/EEA market and mergers with no overlaps. In the super-simplified procedure parties are invited to notify the transactions directly without any pre-notification contacts. The Commission considers that cases under the super-simplified procedure will generally be cleared in less than 25 working days (with 16 working days being the legal minimum).

34) Languages that may be applied in notifications and communication

The notification may be submitted in any of the official languages of the European Union.

35) Documents that must be supplied with notification

Documents that must be submitted with the notification are indicated in the Annexes to the Implementing Regulation of 20 April 2023. The volume of required documents depends on whether the notification is filed in line with the Form CO or the Short Form CO (see topic 33). 

The parties are required to provide the Commission with detailed information on the merger, the concerned undertakings, the affected markets and possible efficiencies of the transaction as well as supporting documentation. 

The following documents generally need be supplied with a merger notification:

1. original Power of Attorney, if the notification is submitted via an external representative,
2. copy of the final or most recent version of the transaction documents,
3. copies of the most recent annual reports and accounts of the parties,
4. copies of all presentations prepared by or for or received by the relevant governing bodies of the parties in which the merger is analyzed (“internal documents”).

36) Filing fees

No filing fee applies for notification to the Commission. 

37) Is implementation of the merger before approval prohibited?

Yes. If the thresholds for merger notification are met (see topic 14), the merging businesses must be run separately and independently until the merger has been approved. Completion of the merger prior to the merger approval is subject to fines (see topic 42).

In case of an Article 22 referral (see topic 27), implementation of the merger is prohibited if it has not already been implemented on the date on which the Commission informs the parties that a referral request has been made.

38) May the parties get permission to implement before approval?

Yes, the parties can get a permission from the Commission on a case-by-case basis. A request for derogation must be reasoned and can be submitted at any time, before or after a notification was filed. However, a derogation will be granted only in exceptional circumstances.

When deciding, the Commission will take into account, among other things, the effects of the suspension on the merging parties or on a third party and the threat to competition posed by the merger. A derogation may be granted subject to conditions and obligations in order to ensure effective competition. The Commission will also generally set a deadline for the submission of the merger control notification.

39) Due diligence and other preparatory steps

The merging parties do not only have to observe the standstill obligation but are also subject to regular competition rules prohibiting and restricting anti-competitive behavior, including exchange of sensitive information by competitors. The due diligence process therefore needs to be conducted in a way that safeguards that commercially sensitive information are used solely for the purpose of assessing the merger. 

Preparatory steps are allowed; however, caution should be exercised that such steps do not lead to even a partial implementation of the merger, in particular by enabling the acquirer to influence the strategic behavior of the target undertaking. Prior to clearance the merging parties must not coordinate market activities, transfer operational control (also partly) or engage in any physical or commercial integration.

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary course of business" clause that prevents the target undertaking from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable.

The issue of veto rights would need to be assessed on a case-by-case basis depending on the type of decision the veto rights are being attached to. In general terms, any veto rights that would allow the acquirer to influence the strategic behavior of the target undertaking prior to the closing date, are not allowed (see topic 11).

41) Implementation outside the jurisdiction before approval – "Carve out"

Carve out is not possible - implementing the merger outside the European Union prior to the Commission's approval would represent a breach of the duty to suspend the implementation.

42) Consequences of implementing without approval/permission

The Commission may – and in practice does – impose fines on the parties if a merger is (partly) implemented prior to clearance. The amount of the fine will be determined based on the nature, gravity and duration of the infringement, but is capped at 10% of the parties’ worldwide turnover. In 2018 the Commission for example fined Dutch telco Altice EUR 124.4 million for inter alia exchanging commercially sensitive information with a target company and taking influence on its commercial behavior prior to clearance of the transaction

If the implemented merger has been subsequently prohibited or was implemented in contravention of a condition attached to a clearance decision (in the absence of which, the merger would not have been cleared), the Commission may order the parties to dissolve the merger, i.e. split up the merged entity or take other measures necessary to restore effective competition.

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

The substantive test is whether the merger is “incompatible with the Common Market because it would significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position” (“SIEC”).

A range of factors may be taken into consideration when assessing whether a merger would create a SIEC. The Commission provides guidance on how the substantive assessment is conducted in its Horizontal Merger Guidelines and Non-Horizontal Merger Guidelines.

The notion of SIEC does not require dominance by one or more of the merging parties but extends to the anti-competitive effects of a merger resulting from the non-coordinated behavior of companies.

45) May any non-competition issues be considered?

No. Unlike some of the Member States' national legislation, the European Union merger control regime does not take into account policy considerations, security considerations etc., when assessing mergers.

46) Special tests or criteria applicable for joint ventures

The assessment of joint ventures is in principle the same as for other mergers. However, in case of joint ventures potential coordinated effects between the parent companies will be assessed in addition (so-called spillover, see topic 4).

47) Decisions and remedies/commitments available

The Commission may approve, approve with conditions (commitments) or prohibit a merger.

If a merger raises serious doubts as to its compatibility with the EU Merger Regulation, the parties can already in phase I propose commitments to address the concerns. The Commission will accept commitments in phase I only where the competition problem is straightforward, and the remedies are so clear-cut that it is not necessary to enter into an in-depth investigation. Considering the timing constraints, the commitments also need to be sufficiently clear that a single market test can confirm that they rule out the “serious doubts”. Complex remedy solutions are generally not suitable as phase I remedies.

If in phase II the Commission comes to the (preliminary) conclusion that the merger will lead to a significant impediment to effective competition (SIEC), the parties can avoid prohibition of the merger by proposing commitments. Phase II remedies do not need to go further than what is needed to remove the competition concerns established in the in-depth investigation. 

The type of commitments that can be offered is not predetermined, however, the Commission provides guidance on commitments that it is likely to deem acceptable in its Remedies Notice considering their capability to address the identified concerns and the manner they can be implemented and monitored. 

Generally speaking, the Commission takes the view that commitments that are structural in nature, such as the commitment to sell a business unit, are, preferable as they prevent, durably, the competition concerns and do not require medium or long-term monitoring measures. Moreover, the Commission has a clear preference for the divestment an existing stand-alone business. However, the Commission is also open to alternative commitments and has in recent years accepted also sophisticated and complex commitment proposals.

48) How and when will details about the merger be published?

If a notified merger falls within the scope of the Merger Regulation, the Commission will publish the fact that it has received the notification in the Official Journal to enable interested third parties to submit their observations. The Commission will also publish updates on the process of each case on the DG Competition website.

The Commission also has a duty to publish a summary of all phase II decisions in the Official Journal. In line with the established practice, a non-confidential text of all decisions (phase I and phase II) will also be published on the Commission's website. 

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties have a right to access the file following the issuance of a Statement of Objections and at every subsequent stage of the procedure up to the consultation of the Advisory Committee. In addition, the Commission will grant access to “key documents” at the beginning of a phase II investigation. Third party confidential information and the Commission's internal documents and correspondence cannot be accessed.

Third parties:

Third parties have no right to access the file under the EU Merger Regulation.

The Commission may provide a non-confidential version of the Statement of Objections to third parties that were recognized as interested third persons in the proceedings.

50) Who can appeal and what may be appealed?

Decisions of the Commission can be appealed by the merging parties and third parties that show direct and individual concern with the challenged decision before the General Court of the European Union. A third party active on the market concerned by the decision will usually be considered directly affected; and participation of the third party in the administrative proceedings before the Commission is generally required for standing before the European Union Courts. Member States are automatically awarded standing as privileged applicants.

The appeal needs to be filed within two months and ten days of notification of the decision to the notifying party or parties or - in the case of third parties - of publication of the Commission decision