*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. Minority interests and concentrations Competitive effects of minority shareholdings Laurent Flochel Vice President, Charles River Associates 1. Introduction 1. A debate has begun in Europe on the value of a priori control of minority shareholdings by competition authorities. The test for the controllability of a concentration is nowadays, at Community level and in many jurisdictions, the modification of control of the undertaking, which may be exercised alone or jointly. 2. Control of a company is the ability to influence the management decisions of the company, including its strategy. Article L 430-1 of the Commercial Code states that "(...) control
LAW AND ECONOMY : ACQUISITION OF MINORITY SHAREHOLDINGS - MERGERS - CONCEPT OF CONTROL - EX ANTE REVIEW - EX POST REVIEW - COMPETITION AUTHORITIES - LEGAL CERTAINTY
Minority shareholdings and mergers
The Ryanair/Aer Lingus case has recently revived a debate regarding the need for an ex ante review by competition authorities of the acquisition of minority shareholdings. Indeed, the concept of "control", which is used by a majority of the competition authorities, is in essence an ill-suited tool to analyze such transactions. Furthermore, an ex post review based on the investigation of anticompetitive practices is seldom used in practice. Although minority shareholdings may lead to restrictions of competition, the expediency of an ex ante review of such transactions remains debated. Minority shareholdings are indeed already reviewed in an ancillary way when reviewing concentrations. Moreover, if the option of an ex ante review was chosen, an adequate test would have to be defined in order to strike a balance between the need for legal certainty and the administrative burden that would result for both competition authorities and undertakings.
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