Do We Need an Efficiency Defence?
Edited by Fabienne IIzkovitz and Roderick Meiklejohn
5. Eﬃciencies in merger control Jrissy Motis, Damien Neven and Paul Seabright In a lecture in the Beesley series, Paul Seabright observed, on the occasion of the tenth anniversary of EU merger control, that little was known about the source of eﬃciencies in mergers (Seabright 2002). In that lecture, he also put forward a simple framework for consideration on the motivation behind mergers, as a particular form of corporate restructuring, and the source of synergies between merging partners. In this chapter, we report on some of the work that we have undertaken on synergies and the source of eﬃciencies in mergers. We outline the framework that we have developed for thinking about mergers, summarize some of the empirical evidence that we have gathered and discuss the insights that the framework yields into the role of competition authorities. This work provides some conﬁrmation that the reallocation of intangible assets is a signiﬁcant motivation for mergers and a source of merger-speciﬁc eﬃciencies. With respect to the role of competition authorities, we will suggest that they should systematically ask about the activities that can only be undertaken through the proposed merger and seek evidence from the merging parties about the plans that they have developed to integrate their activities. We will also suggest that synergies are of particular importance compared to technical eﬃciencies because the latter are, in principle, achievable by means other than a merger and, if in practice they are not likely to...
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