EU Plans to Ease Merger Review, Lowering Integration Barriers for Local Giants

The European Commission plans to significantly adjust merger review rules for the first time in two decades, with the core change being to allow for greater leeway in corporate integration. In the future, when companies apply for acquisitions, they can more proactively explain the benefits of the transaction in terms of scale, innovation, sustainability, and supply resilience.

In the past, the EU placed more emphasis on preventing concentration in the domestic market, with a typical case being the blocking of the merger of Siemens' and Alstom's railway assets; now, changes in geopolitical and trade environments have made Brussels more concerned about whether European companies can compete with giants in the United States and China.

New key changes in the rules mean that regulators will no longer only look at whether mergers and acquisitions weaken existing competition, but also assess whether the merged entity can bring long-term efficiency benefits. The European Commission stated that it will place greater emphasis on the positive impacts of innovation, sustainability, investment, resilience, and scale in the future, and as long as the proven long-term benefits at least offset the damage to competition, the transaction may be approved.

The new rules do not mean a comprehensive relaxation of merger reviews. The EU's competition chief, Teresa Ribera, emphasized that the goal of the new approach is still to protect competitive markets and prevent companies from accumulating power that could be abused. The EU clearly indicated, large technology companies cannot easily use fostering innovation as a reason when acquiring R&D start-ups; non-EU buyers acquiring European companies will also be included in the assessment of the resilience of the EU's internal market.