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European Union regulators are considering extending the deadlines for completing merger reviews, if the companies involved request more time to negotiate divestitures, said a prominent EU official Friday. The change under consideration by the European Commission, the EU’s antitrust regulator, is part of a broad overhaul of the EU’s law for vetting mergers. Under current law, merger investigations are punctuated by strict, legally-binding deadlines: four to six weeks from the date of notification for a preliminary, Phase 1 investigation, and four months for a detailed, Phase 2 probe. While the Commission seeking to extend its deadlines is no surprise, the shape of such changes has been unclear. The EU’s current procedures differ greatly from those of the U.S., where negotiations between companies and regulators determine the length of an inquiry. The Commission is trying to take the benefits of the U.S. process, while maintaining the advantages of transparent, legally-binding deadlines. “The Commission is considering the possibility of extending its Phase 1 and Phase 2 investigations within certain time limits, and essentially at the request of the notifying parties,” said Enrique Gonzalez Diaz, a senior official of the Commission’s merger task force, or MTF. The MTF is the unit within the Commission that conducts merger investigations, and Gonzalez Diaz has led some of the Commission’s headline-grabbing cases, including the veto of General Electric Co.’s acquisition of Honeywell International Inc. in July. Such changes are intended for complicated merger reviews, where companies could use the extra time to better “articulate remedies,” and for the Commission to assess the divestitures. Any extension is unlikely to be as long as another four to five months, Gonzalez Diaz said, without specifying further. Gonzalez Diaz, speaking at the IBC Advanced Competition Law Conference in Brussels, said he was optimistic about the pace of completing the overhaul and expected a draft text by as early as next summer. European member states would then receive the text for final adoption. By year’s end, the Commission plans to adopt an initial paper to launch a debate about the reform. On most topics, the Commission has yet to take a position. Among the subjects to be included in the paper are whether minority shareholdings and strategic alliances should be reviewed under the merger regulation dealing with multiple-part transactions; whether the wording of the text on dominance should be modified (current EU merger law examines the “strengthening or creation of a dominant position”); and whether or not companies can notify transactions at an earlier stage. Under existing law, deals can only be sent to the EU once an agreement has been concluded or a public bid launched. Consultations with legal and business representatives will take place from January to March, before the Commission begins drafting a text. Copyright (c)2001 TDD, LLC. All rights reserved.

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