454 14 Excursion: Merger Control
Merger. A merger within the meaning of the Merger Regulation occurs when
two or more independent undertakings amalgamate into a new undertaking and
cease to exist as separate legal entities. A merger may also occur when an under-
taking is absorbed by another, the latter retaining its legal identity while the for-
mer ceases to exist as a legal entity. A merger within the meaning of the Merger
Regulation may also occur where, in the absence of a legal merger, the combining
of the activities of previously independent undertakings results in the creation of a
single economic unit.^41
Notification. The EC Merger Regulation lays down a duty to notify concentra-
tions to the Commission if they have a Community dimension. They must be noti-
fied to the Commission prior to their implementation.
Notification must be made following the conclusion of the agreement, the an-
nouncement of the public bid, or the acquisition of a controlling interest.
Notification may also be made where the undertakings concerned demonstrate
to the Commission a good faith intention to conclude an agreement or, in the case
of a public bid, where they have publicly announced an intention to make such a
bid, provided that the intended agreement or bid would result in a concentration
with a Community dimension.^42 For example, notification is possible on the basis
of an agreement in principle, a memorandum of understanding, or a letter of intent
signed by all undertakings concerned.^43
Suspension of implementation. The implementation of concentrations must be
suspended until a final decision of the Commission has been taken.^44
The Commission may nevertheless grant a derogation.^45 In deciding whether or
not to grant a derogation, the Commission will take account of all pertinent fac-
tors, such as the nature and gravity of damage to the undertakings concerned or to
third parties, and the threat to competition posed by the concentration.^46
There is a special rule on public takeover bids. The rule on suspension of im-
plementation does not prevent the implementation of a public bid, provided that:
(a) the concentration is notified to the Commission without delay; and (b) the ac-
quirer 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.^47
Compatibility with Community law. The compatibility of a concentration with
Community law depends on Articles 81 and 82 of the EC Treaty. The Commission
may not permit any derogation from Article 82. A derogation is possible from Ar-
ticle 81(1) under certain circumstances mentioned in Article 81(3). Generally, the
EC Merger Regulation is without prejudice to Articles 81 and 82 of the Treaty.
(^41) Commission Consolidated Jurisdictional Notice, paragraphs 9 and 10.
(^42) Article 4(1) of Regulation 139/2004 (EC Merger Regulation).
(^43) Recital 34 of Regulation 139/2004 (EC Merger Regulation).
(^44) Article 7(1) of Regulation 139/2004 (EC Merger Regulation).
(^45) Article 7(3) of Regulation 139/2004 (EC Merger Regulation).
(^46) Recital 34 of Regulation 139/2004 (EC Merger Regulation).
(^47) Article 7(2) of Regulation 139/2004 (EC Merger Regulation).