Paper Summary:

Whilst the US.authorities have expressly concluded that anti-trust should rarely, if at all, interfere in the taking place of conglomerate mergers, the European Commission (EC) has, in contrast, become increasingly concerned with the 'conglomerate effects' of mergers, in a number of its relatively recent decisions. This paper discusses the potential anti-competitive effects that can result from such mergers, and then subsequently focuses on two key E.C. decisions - GE/Honeywell and Tetra Laval/Sidel for the main analysis, with relevant comparison between E.C. and U.S. perspectives.

Outline
Abstract
Anti-Competitive Effects Resulting From Conglomerate Mergers
The GE/Honeywell Saga
Tetra Laval/Sidel
Conclusion

From the Paper:

"The issue of 'efficiencies' represented a major point of divergence in the EC and US attitudes towards the potential effects of the merger and was a theme which ran through the core of many of the individual points and arguments made. Efficiency is considered to be the "ultimate goal" of US ant-trust policy , with the purpose of the Sherman Act and other competition laws being to "protect competition, not competitors" . The EC's decision in GE/Honeywell was thus heavily criticised for, as far as the US authorities perceived it, actually blocking the merger because it would give rise to efficiencies, such as lower capital costs and cheaper prices, which Honeywell's rivals would be unable to compete with."

Sample of Sources Used:

• "Commission loses Tetra Laval / Sidel appeal" EU Focus (2005), 161, pp.2-4
• Cooper, J. Froeb, L., O'Brien, D., Vita, M. "A critique of Professor Church's report on the impact of vertical and conglomerate mergers on competition" Journal of Competition Law and Economics (2005), 1, pp.785-792
• Hewitt, G. "Portfolio effects in conglomerate mergers" Journal of Competition Law and Policy (2002), 4(1), pp.59-151
• Holmes, S., Grogan, N. & Heide, T. "Portfolio Power" Competition Law Insight (2006) 5, 1 (6)
• Holmes, S., Humpe, C. "The CFI rules on GE/Honeywell" Competition Law Insight (2006) 5, 1 (9)

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