Toughening Takeovers

Europe's Minority Stakeholders Face Greater Scrutiny from E.U. Regulators

Almunia
Joaquin Almunia, the European Union's Competition Commissioner, speaks at a recent press conference.
  • Why it matters

    Why it matters

    European Union wants to extend merger reviews to companies that hold minority stakes in other companies and, as a result, can influence their performance.

  • Facts

    Facts

    • A minority interest is a significant, but non-controlling ownership of a firm of less than 50 percent.
    • Current E.U. merger rules don’t allow for review of minority stakeholders, but such laws are in place in the United States, Japan and some European countries, including Germany.
    • Stakeholder companies would determine themselves whether there was a significant competitive issue that needed to be registered with Brussels.
  • Audio

    Audio

  • Pdf

Antitrust chief Joaquín Almunia wants to expand how far Europe’s regulatory watchdogs can scrutinize companies that hold significant but non-controlling interest in other firms.

This bit of news comes from a government report that Mr. Almunia, European Commission vice president in charge of competition, recently released to the public.

“The experience of the past 10 years has shown there is still leeway to improve merger control in the European Union,” he said. “Regulators at the E.U. level should work with a modern set of tools to protect businesses and consumers from mergers that could interfere with competition.”

Companies can acquire minority stakes in competing businesses and, as a result, influence their performance. In effect, that could restrict competition in the market.

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