Chapter 5: Merger remedies
Most merger regimes, by requiring or facilitating advance regulatory scrutiny, provide an opportunity for parties and regulators to negotiate modifications to proposed mergers designed to alleviate any identified competition concerns. This opportunity to negotiate with the regulator prior to consummation of a merger can help to avoid costly litigation for parties and regulators and may result in a higher welfare outcome by conditionally permitting a largely efficient merger that might otherwise have been prohibited. As a result, merger remedies have been appropriately described as 'one of the most important tools with which to align or realign the conduct of firms in terms of acceptable competition law principles'. A consideration of merger remedies is, therefore, important, both because of their potential to maximize welfare outcomes, particularly for global mergers and because of the fact that, in most jurisdictions, mergers are approved with conditions (remedies) far more frequently than they are prohibited outright. For example, in the EU mergers are conditionally cleared approximately ten times more frequently than they are blocked. Similarly, in China, which now represents a vital clearance jurisdiction for most global transactions, MOFCOM imposed merger remedies in 16 cases between 2008-2012, while blocking only one merger outright. Although a detailed consideration of particular types of remedies appropriate for different transactions is beyond the scope of this study, this chapter considers the role of merger remedies, the broad types of remedies imposed and the approach taken to remedies where mergers are multijurisdictional in scope.
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