Maintaining Open Markets in the Global Economy
Chapter 7: International Mergers
7. International mergers I INTRODUCTION In the wake of market globalisation, international mergers cause some of the most complex problems for antitrust policy. The process of market widening which globalisation involves has generated an increase in international mergers as firms seek to strengthen their position for strategic advantage. Where a market has become generally more accessible, firms may frequently view acquisition rather than new investment as the more effective means of gaining or extending their influence. The growth in international mergers, however, increases the potential for spillover effects to be felt way beyond the immediate location of the companies involved. We need only mention the acquisition of one large multinational enterprise registered in country A by another multinational enterprise registered in country B to recognise that the potential anticompetitive effects are likely to be very widespread. In principle, all the countries where the two either have productive capacity or where they account for a sizeable proportion of sales may anticipate some effect on competition in their market. As a result the antitrust authorities in each country may initiate investigative or control proceedings. The companies may therefore have to address the (different) antitrust concerns in multiple jurisdictions and contemplate a possible conflict of outcomes. In Chapter 5 we mentioned that the economic analysis of vertical restraints had changed fundamentally in recent years with consequent changes in antitrust policy. The analysis of mergers has not undergone such a profound change but there has been much attention devoted to the effects of mergers...
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