This document is based on the General approaches set out in Regulation 139/2004 as well as the Guidelines on horizontal mergers (2004). And it defines the procedure for conducting and assessing the admissibility of transactions of companies that are at different stages of the value chain, i.e. vertical M&A. In addition, the guidelines introduced cover conglomerate transactions. The transactions of companies that are active in closely related markets (for example, in the case of a merger of suppliers of complementary products or products belonging to the same product rank) are of particular interest. As in the general case, the following aspects are the subjects to assessment: the conformity of the transaction with the principles of the common market, its impact on effective competition, as well as the possibility of forming and strengthening the dominant position of the integrated company in the course of the transaction.
In general, as indicated in the Guidelines on non-horizontal mergers, the anticompetitive potential of such transactions is significantly lower than that of horizontal ones. Moreover, it is emphasized that there is a significant potential for efficiency inherent in such transactions due to solving the problem of the monopolist margin, reducing transaction costs, creating better conditions for the coordination of interrelated operations, etc. (European Union Guidelines, 2004). At the same time, it is noted that such transactions should be carefully considered from the perspective of their impact on the competitive situation, the possibility of gaining and strengthening market power and the new firm's dominant position in the market. For this purpose, estimates of market share and concentration in the relevant markets are used for quantitative baselines.
Among the noteworthy trends of recent years is the continued convergence of the content of the legal regulation of M&A transactions in the EU, including some of its procedural aspects and methods of implementation, with are applicable in the United States. The development in 2008 by the European Commission of proposals confirms this conclusion, in particular, to provide entrepreneurs and consumers with the legal opportunity to file individual claims as victims of antitrust violations (CEC. Competition Police, 2008)
Today, international companies are involved in the global economy, and the decision of the Antimonopoly regulator of a country can significantly affect businesses and consumers around the world. In this regard, it is necessary to take into account the differences in antitrust policy, legislation and approaches of foreign countries, in particular, the US and the EU.
Despite the positive trends in the economy and capital market, the current market environment continues to be challenging. The number of attractive M&A opportunities is limited, partly due to a significant reduction in asset valuation and a lack of available financing.
In this environment, sound advice is more important than ever. Our experienced advisers can help you take advantage of existing opportunities and offer you ways to strengthen your business and increase shareholder value.
We have significant experience in M&A processes, where our advisors act as transaction managers at all stages (from initial planning and preparation to completion) and assist in coordinating the activities of other advisors (tax, legal, etc.) involved in the process. In particular, we provide documentation services, financial model development, partner search, and pre-investment research. We can also assist in drafting the purchase agreement, structuring the transaction and conducting negotiations.
Broadly speaking, mergers and acquisitions also include strategic alliances with other companies and asset separation (Divestitures). Most often, strategic alliances are formed on the basis of mutual participation in the capital, or with the establishment of joint ventures (Joint Ventures) through contributions to a common subsidiary. The most common form of asset separation is the sale of an existing subsidiary to another company. Sometimes a part of the enterprise is singled out as a separate company ("bouncing off") and the shares in it are proportionally distributed among the shareholders of the parent company (Spin-Off). If it involves the liquidation of the entire parent company, fragmentation (Split-Up) is mentioned. It is also possible to legally separate a part of the enterprise by means of exchange of shares by the shareholders of the parent company for the shares of the new company (Split-Off). At the same time, the parent company can sell the shares of the allocated company to a third party and thus get additional capital (EquityCarve-Out).