THE European Commission's recent Green Paper on the control of mergers proposes a wide ranging simplification of the system. Currently, the regulation of mergers is controlled by each member state.
While the existing system manages national mergers admirably, it causes great problems for those proposing international mergers.
From country to country entirely different rules concerning procedures, size limits assessment criteria and the nature of the relating authority are enforced.
Rather than do away entirely with national systems developed to control mergers in differing financial and economic climates, the Commission's proposal would increase the range of companies required to use their system.
Previously only merging companies with very high turnovers had to notify the Commission.
By widening the turnover levels the Commission hopes to ensnare - tall mergers likely to have European Union economic implications. Companies involved in such transactions would be bound only to notify the Commission. The virtues of their proposals would be judged using one set of fixed criteria.
There is widespread support for the idea from the business sector, according to the Commission. Despite calls for its simplification, company law throughout Europe is getting more complicated. These legal intricacies combined with the strategic and tactical considerations of a large scale corporate merger at best delay, and at worst preclude, potentially beneficial integrations.
However, it has been made very clear that the Green Paper is a discussion document as opposed to a policy statement. Already some member states, notably France, Germany and Britain are voicing their concern over further intervention.
With member states of such enormous political and financial clout opposed to the measures as they now stand, it is very likely that they will not be accepted in their current form.
The Commission has set a dead line for submissions relating to these proposal of March 31st, 1996. Interested parties are invited to send comments on the Green Paper to the following address: Merger Task Force, DG IV Competition, European Commission, 200 Rue de la Loi, 1049 Brussels.
