SynthesisPANEL 1 : INTERNATIONAL MERGERS: FROM NAVIGATING MINORITY TRANSACTIONS TO MERGERREMEDIES IN CHINA
The first panel discussed currentissues in international merger enforcement with a focus on minority transactions. The panel opened with a discussion ofthe European Commission’s (“Commission”) recent consultation on minority shareholdings. The group considered the Commission’s preliminary findingthat there is an enforcement gap forminority shareholdings and therefore abasis for extending the scope of application of the European Union Merger Regulation. The panelists covered the mechanisms suggested by the Commission for reviewing minority transactions, including a notification or discretionary system. The enforcement authority of member states, such as Germany and the United Kingdom (“UK”), relating tominority shareholdings also was discussed, particularly in reference tothe UK Competition Commission’s decisionin Ryanair/Aer Lingus. Next, the panel turned to the U.S.system and economic analysis of minority transactions. In the U.S., the legal focus is on the acquiring firm’s post transaction incentives, its ability to influence the acquired firm, and the potential for information sharing. The group addressed the U.S. notification system under the Hart-Scott-RodinoAct and considered the Federal TradeCommission’s (“FTC”) investigation of Kinder Morgan as an example of U.S.enforcement policy. Turning to economic analysis, the panel discussed calculating unilateral incentive effects in partial acquisitions. They looked at Valero’s acquisition of Kaneb not only as an example of the incentives theory, butalso of the complex corporate structure that often underlies a partial acquisition.The group talked through various challenges that enforcers face when assessing minority transactions. Foremost, crafting a remedy in a partial acquisition is inherently difficult because the acquirerlacks control. Given the complex analysis, the panel also considered whether minority transactions should be reviewed retrospectively. The panel concluded with a discussion on the state of the U.S. and European merger control systems debating the efficiency of theU.S. system and whether the Commission has an added responsibility because it serves as an example for so many jurisdictions.
