By Foo Yun Chee BRUSSELS, Feb 12 (Reuters) – The European Commission is aiming to make it easier for companies in the region to build scale through cross-border acquisitions in its first overhaul of merger rules in more than two decades, people with direct knowledge of the matter said. The European Commission is aiming to […]
Business
Exclusive-EU looking to ease path for pan-European deal approvals, sources say
Audio By Carbonatix
By Foo Yun Chee
BRUSSELS, Feb 12 (Reuters) – The European Commission is aiming to make it easier for companies in the region to build scale through cross-border acquisitions in its first overhaul of merger rules in more than two decades, people with direct knowledge of the matter said.
The European Commission is aiming to set down conditions for deal approvals in its overhaul of merger rules dating from 2004, the people said. A draft will be published in the spring for feedback before regulators implement any changes.
The EU proposal to encourage more pan-European mergers comes amid calls from businesses, especially telecoms operators, for looser EU merger rules to allow them to scale up and as Europe looks to reduce its economic dependence on the U.S. and China.
Regulators want to encourage pan-European deals rather than national deals which boost the market power of a few players.
European Council chief Antonio Costa said leaders across Europe agreed on the need for action.
“I heard agreement that, in some sectors like telecom, we should allow for a degree of company consolidation to achieve the necessary levels of investment and innovation. This should be part of a kind of social contract. To ensure that the consolidated companies do invest more and do innovate more,” he told a press conference after a meeting of EU leaders in Belgium.
The Commission, which acts as the EU competition enforcer, declined to comment on Thursday.
Discussions on the benefits of a merger which regulators will take into account when assessing deals are now focused on innovation, sustainability, resilience, investment and employment, the sources said.
Companies stand a better chance with innovation arguments, they said, as the others are more difficult to quantify.
EU merger rules traditionally seek to ensure that deals do not result in price hikes and fewer products, which critics say should be broadened to take into account innovation and investment and other factors.
(Reporting by Foo Yun Chee; Editing by Elaine Hardcastle and Nick Zieminski)