ARTICLE
7 July 2025

EC's Merger Control Assessment Of Basic Industries M&A Focuses On Capacity And "Pivotality"

AO
A&O Shearman

Contributor

A&O Shearman was formed in 2024 via the merger of two historic firms, Allen & Overy and Shearman & Sterling. With nearly 4,000 lawyers globally, we are equally fluent in English law, U.S. law and the laws of the world’s most dynamic markets. This combination creates a new kind of law firm, one built to achieve unparalleled outcomes for our clients on their most complex, multijurisdictional matters – everywhere in the world. A firm that advises at the forefront of the forces changing the current of global business and that is unrivalled in its global strength. Our clients benefit from the collective experience of teams who work with many of the world’s most influential companies and institutions, and have a history of precedent-setting innovations. Together our lawyers advise more than a third of NYSE-listed businesses, a fifth of the NASDAQ and a notable proportion of the London Stock Exchange, the Euronext, Euronext Paris and the Tokyo and Hong Kong Stock Exchanges.
Many companies active in chemicals, steel and other basic industries are no strangers to the need to factor in merger control risk when assessing the feasibility...
European Union Antitrust/Competition Law

Many companies active in chemicals, steel and other basic industries are no strangers to the need to factor in merger control risk when assessing the feasibility of a strategic transaction. In recent years, however, the EC's approach to merger control enforcement in these sectors has evolved, with new analytical metrics coming to the fore.

In summary, when assessing the competitive impact of M&A in an industrial context, the EC now focuses on the share of capacity of the parties and their rivals (placing less weight on market shares based on sales to third parties). A more sophisticated approach to geographic market definition has also been adopted in recent years, using catchment areas determined by measurable distance or time rather than national- or EEA-wide markets.

And, significantly, the EC now refers to a concept of "pivotality". A merged firm may be considered pivotal when all other competitors are unable, together, to cover the entire demand in the market. Deals between pivotal companies are more likely to raise antitrust concerns.

Overall, this focus on physical structural metrics has important implications for deal planning and the role of imports in the assessment. It could give rise to hurdles in markets even where there is spare capacity.

Our recent alert examines these issues in more detail. Based on analysis by EC officials, alongside our observations of the authority's enforcement practice, we give insights on the EC's current approach to merger control assessment in basic industries. We look at the challenges that may arise, especially in the context of today's uncertain geopolitical environment. We also set out key practical considerations for parties considering industrial and manufacturing deals, including useful factors for assessing deal feasibility and how any antitrust concerns may be addressed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More