EU Eases Merger Rules to Create 'European Champions'

The European Union is undertaking a significant revision of its competition rules. The draft reforms foresee that factors such as companies' scale and investment capacity will be given greater consideration in merger and acquisition assessments. The new rules prepared by the European Commission encourage competition authorities to consider not only market concentration but also companies' ability to compete with global rivals when reviewing proposed deals. This change is part of the goal to create larger 'European champions,' particularly in strategic sectors like technology and green energy. While current rules primarily focus on risks of consumer harm and price increases, the new approach aims to bring a broader economic perspective to competition analysis. The reform also paves the way for evaluating the potential of corporate mergers to foster innovation and long-term investments. This move appears aligned with the EU's efforts to strengthen its industrial policy to compete more effectively in the global market against major rivals in the US and China. The final form of the changes will be determined after negotiations among member states and the European Parliament. Not investment advice.