The Relationship Between Article 4(1)(b) of the Cross-Border Merger Directive and the European Merger Regulation

Abstract

In a time when protectionism is re-emerging as a strong policy stance on a global scale, the opposition to cross mergers based on public interest grounds may once more become more frequent. The lack of a common policy at the EU level leaves each Member State free to set its own framework to oppose mergers based on the public interest. However, such frameworks need to comply with Article 4(1)(b) of the Cross-Border Merger Directive (CBMD) which expressly introduces a non-discrimination principle in respect of MS’s provision which regulate the opposition of public interest. This paper compares the protection offered under Article 4(1)(b) with the one offered under the EU Merger Regulation (EUMR). It shows that the protections under the EUMR are greater and that the EUMR provides a robust ex ante assessment of public interest claims raised against the merger. However, it also shows that the role of the EUMR in the protection of mergers against public interest opposition is limited. This limitation stems from the threshold for establishing a Union dimension within the meaning for that Regulation. This Chapter suggests that, while the scope of the CBMD covers more mergers, the real playing field of public interest opposition is prior to the merger—during the takeover by a foreign company or the change of control in the terms of the EUMR.