Rescue merger

Rescue merger

Rescue merger in the European Union Law

Concept of Rescue merger provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): The concept of the rescue merger, also referred to as 'failing firm defence', enables the Commission to clear a concentration even though a dominant position is created or strengthened in its after-math, provided that there is no causal link between the concentration and the dominant position, that is to say, the merger does not lead to a deterioration of the competitive structure of the market. The Commission has developed the following criteria for the application of the rescue merger concept: (1) the undertaking to be acquired must be ' failing' (that is, it would, in any event, be forced out of the market); (2) there is no alternative buyer who could provide for a less anti-competitive solution; (3) the market share of the acquired under-taking would, in any event, be taken over by the acquiring undertak-ing, or its assets would inevitably exit the market if not taken over by another undertaking. So far, the concept of the rescue merger has been applied rarely.

(See: Commission decision of 14 December 1993 in Case IV/M.308 — Kali+Salz (OJ L 186, 21.7.1994, p. 38); Commission decision of 11 July 2001 in Case COMP/M.2314 — BASF/Eurodiol/Pantochim.)

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