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The Triggering Event – The FFJV’s Achilles’ heel?

2014; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4271545

1556-5068

Ricardo Bayão Horta,

Merger and Competition Analysis

The present discussion focuses on a particular type of merger: the newly created full-function joint-ventures and specifically, on the practical issues Competition Authorities may face on when to assess this particular kind of mergers, the so-called ‘triggering event’. Its objective is to promote a discussion on the most appropriate moment, from a Competition Authority’s procedural perspective, to analyse a newly created Full-Function Joint Venture (hereinafter, ‘FFJV‘). Considering that the full-functionality character of the jointly controlled entity may not be immediately recognized upon its creation as a legal entity, I ask, from a Competition Authority’s perspective, whether the currently considered triggering event for notifying this type of merger transaction is the most appropriate, or could there be other alternatives to consider, such as shifting the moment of the triggering event for notification up-to the final stages of the so-called start-up period, when the joint venture is expected to perform, on a lasting basis, all the functions of an independent economic entity in the market? I argue that this proposed alternative has considerable advantages vis the present system, in particular regarding the Competition Authority’s capability to perform an assessment on the merger with considerably more legal certainty, rigour and adjusted to the economic reality at hand.