An increase in M&A activity, coupled with more active regulators, means law firms in Spain and Portugal are expecting to increase their EU and competition-related revenue in 2015
Lawyers in Spain and Portugal are predicting a year of growth
for their EU and competition practices as a reborn M&A market
as well as a new EU competition commissioner promises to keep teams
busy during 2015.
Deals involving Iberian-led companies have bounced back in the past
year, lawyers say, with figures from Thomson Reuters showing that
there were 1,054 Spanish M&A deals in 2014, valued at $101.5
billion. This is an 11 per cent increase in volume – and a 50
per cent increase in value – compared to 2015. Portugal too
has enjoyed a strong year, with the €7.4 billion purchase of
Portugal Telecom's local assets by Altice among the headline
deals.
"There has been an uptake in M&A activity, which we expect
to increase in 2015, meaning that merger control matters have
become a more regular source of work," explains Cani
Fernández, partner and coordinator of competition and EU law
at Cuatrecasas, Gonçalves Pereira. She adds that the rise in
transactional work has been combined with an increased focus on a
number of other competition matters, both at a national and
European level: "Cartel work and State Aid issues are very
high on the agenda at the moment."
Around 30 per cent of law firms in Spain expect their EU and
competition practices to grow in 2015. The situation is similar in
Portugal, according to Ricardo Oliveira, head of EU and competition
law at PLMJ. "We expect a balanced blend of contentious and
transactional work, although the former should be the main growth
driver," he claims. "We are aiming for an increase [in
revenue for the practice] in the region of three per
cent."
Both lawyers say that contentious work is being driven by more
active competition authorities, which is increasing the need for
more detailed compliance monitoring. Recent high profile deals
– such as Telefonica's bid for a controlling stake in TV
company Canal Plus – have caught the attention of regulators
while changes at the European level, specifically the appointment
of Margrethe Vestager as EU competition commissioner, who succeeded
Joaquín Almunia, has given enforcement new impetus. Indeed,
recent research from Allen & Overy said global fines imposed by
regulators for cartel violations total $5.3 billion in 2014.
It is expected that consolidation in the telecoms and
pharmaceutical industries will result in a EU-level review, while
there have also been EU enquiries relating to state aid issues
concerning governmental agreements with organisations such as
Amazon, Apple and Cyprus Airways.
Clients want preventative advice
Fernández says the current climate is having an effect on
law firm practices in that clients want their legal advisers to
provide more preventative advice on issues such as cartels and
state aid rather than only turning to external lawyers when things
go wrong. Clients also want to ensure they have suitable internal
processes in place to avoid breaching competition laws.
Fernández adds that one particular issue clients are worried
about is Article 102 of EU Competition Law, especially after the
Intel ruling in 2014. In the judgment, the General Court found that
exclusivity rebates provided by a dominant company are
anti-competitive. Yet, it is far from clear as to how the ruling
may be applied in future. "There is some confusion over what a
dominant company – which may be any business with more than a
40 per cent share of the market – can do in terms of their
pricing policy."
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