Global Players – Global Markets
Edited by John-ren Chen
Chapter 4: The International Competition Network as an International Merger Control Institution
Oliver Budzinski INTERNATIONAL MERGERS AND COMPETITION POLICY1 The second half of the 1990s was strongly characterised by a massive wave of cross-border mergers which caused an intensive academic and political discussion.2 Although there have been other important and extensive merger waves before (see Figure 4.1) and Table 4.1,3 this one was distinctive in a number of ways: 1. 2. With its peak in the year 2000, the 1990s’ merger wave exceeded the last merger wave by approximately ﬁve times (see Figure 4.2). Different from all the historic merger waves, it consisted of a unique volume of cross-border mergers (see Figure 4.3). This is true not only in regard to the origin of the merging companies, but even more so concerning the regional distribution of the affected markets. Not only did the total value of mergers reach an all-time peak, but the average transaction volume also signiﬁcantly exceeded previous mergers. For instance, the transaction values of Vodafone Airtouch/Mannesmann (190 billion US$ in 2000) and AOL/Time Warner (166 billion US$ in 2000) more than doubled the biggest merger4 so far and exceeded the GDP of middle-sized industrial countries like Portugal (about 120 billion US$). While mergers traditionally are characterised by the acquisition of a smaller company by a bigger one, the 1990s’ merger wave consisted of a distinct increase in mergers between equally-sized companies (see Table 4.2). This megamerger wave encompasses virtually every industry and, contrary to the other merger waves, especially service and innovative industries.5 64 3. 4. 5....
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