EU court says it can probe M&As even when one party has no European operations
A European court has said it can examine M&As among tech and science companies even if one of the parties has no operations in the EU.from the European Union's General Court found that it had the right to look into and rule on the planned merger between US biotech firms Illumina and Grail. Illumina is a global firm with offices in Germany and France, while Grail, a company developing early cancer screening technology, does not yet operate within the EU.
Nonetheless, the court said the planned $8 billion merger could have an effect on competition within the EU, regardless of the size of the deal. In preparation, the European Commission, the EU's secretariat, met with organizations complaining about the planned merger and subsequently exchanged views with competition authorities in Germany, Austria, Slovenia, and Sweden. It was also in contact with the UK's Competition and Markets Authority – which had received the complaint as well – even though the UK is no longer in the political and trading bloc.
"The Commission reached the preliminary conclusion that the concentration at issue could be the subject of a referral under [EU merger regulations] Article 22 of Regulation No 139/2004, in particular in view of the fact that Grail's importance for competition was not reflected in its turnover," the judgment said.
The view is said to set a precedent which could affect tech firms globally as the EU tries to stem the tide of the dominance of big tech. Earlier this month, the EUVerity Egerton-Doyle, counsel in Linklaters' antitrust and foreign investment practice, told"It endorses the European Commission's power to review mergers in the tech and other innovation heavy industries, even where they do not meet the merger control thresholds at EU or member state level.
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