Question:
What are some exampels of things the competition authorities can impose on firms to do before an M&A is approved, so competition is not too limited in the industry?
Author: Hjalmer PedersenAnswer:
What commitments can competition authority require to let a merger go through? • Selling of industrial plants, for instance to a competitor. • Selling intangible rights • Selling of shares from competitors • Repeal of exclusive rights and clauses • Influence on firm’s infrastructure (For instance a large gas line for everybody’s good) • Obligation to sell (inputs) to competitors • Providing information and increase transparency • Regulation of prices and discounts • Structural commitments: - Commitment to change the market structure, in the hope that effective competition can be ensured / created. - For example, the sale of holdings, installations, intangible rights, impact on infrastructure • Behavioral commitments: - Commitment that governs the merging company’s conduct during and after merger - For example, price regulation, the obligation to sell to competitors etc.
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