In particular, special Comments prepared and adopted in March 2006 by the U.S. Department of Justice and the Federal Trade Commission drew attention to this fact [10]. These Comments summarized some of the results of the fourteen-year period of implementation of the 1992 horizontal merger Directives, refined in 1997.
In assessing the criteria for approval of M&A transactions applied by different countries, it should be noted that the U.S policy, as well as in the EU, in similar situations, proceeds from the need to confirm the feasibility of the transaction on the basis of the surplus increasing not of the producer, but of the consumer. The approach taken in the United States appears to be more justified because of the well-known tendency of companies to exaggerate the cost savings resulting from this transaction. Focusing on the consumer surplus weakens this desire because cost savings that are not accompanied by an increase in the consumer surplus will not help to justify the transaction.
Regulation of M&A transactions within the EU
The policy of regulation of mergers and acquisitions in the European Union is also an integral part of the overall competition policy. Moreover, this feature can be seen in the European integration group most clearly because of the later in comparison with the U.S. formation of this policy, the starting point of which was the signing of the Treaty of Rome in 1957. The policy is generally aimed at achieving two interrelated objectives. First, to ensure conditions for fair or free competition within this integration group and, secondly, to prevent abuse of monopoly power, not only by large companies but also by state bodies.
The key principles of competition policy in the EU are defined in articles 81 and 82 of the Amsterdam Treaty.
According to these articles, any agreements that may be regarded as violating the conditions of open competition or as forming the basis for unfair competition in the EU Member States are prohibited. Specifically, through art. 81 legal control is exercised over the practice of imposing restrictions that undermine competition, including collusion (horizontal and vertical) between companies for the purpose of fixing prices, dividing the market, entering into joint agreements on sales and purchases, controlling the market for equipment and investment, etc. There are exceptions, the basis for which can serve, for example, proof that a horizontal agreement leads to significant economies of scale, provides increased efficiency in the distribution of technological progress or technology transfer. In the case of vertical agreements, these may be a so-called block or group agreements, under which vertical agreements between companies are possible if the market share of the seller (buyer) does not exceed 30% in the relevant industry segment. Art. 82 of the EC Treaty relates to abuses of firms in a monopolistic or dominant position. And, unlike Art. 81, it does not provide any exceptions. Under the article. 82 there are situations involving the concentration of monopoly power in the hands of a company, which allows it to influence the results of the functioning of the market, acting independently of competitors and thereby violating the conditions of fair competition (Jacobson, 1996, p. 296-300).
Mergers are subject to the special Rules on mergers (Council Regulation 139/2004 EC) [12]. Horizontal mergers are recognized as significant for assessment and monitoring if they have a fundamental impact on effective competition within the EU. In this case, competition law is based on the idea that mergers can result in significant cost savings compared to the need to enter into bilateral contracts. In addition, the concentration growth accompanying the merger results in economies of scale and network effects. On the other hand, mergers can lead to increased market power, an increase in the market share of the merged company, a reduction in the number of competitors, thereby adversely affecting the competitive environment and consumer welfare. The tasks under Regulation 139/2004 are similar to those under articles 81 and 82. The main difference is that the direct task of legislation in the field of mergers and acquisitions, as we have already seen the example of the United States is the prevention of the formation of market structures that may lead to or strengthen a dominant position of the company.
This process can be defined as taking control of one company by another, managing it and acquiring partial ownership of it. At the same time, all participants remain subject to their previous legal forms.
Acquisition of the company is carried out without procedures of liquidation or reorganization of participants as subjects of entrepreneurial activity: when the company-investor acquires a controlling block of shares of the invested company, having received, thus, the corporate control without essential changes.