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Market Reactions to European Merger Regulation: A Reexamination of the Protectionism Hypothesis

36 Pages Posted: 18 Nov 2011  

Nihat Aktas

WHU - Otto Beisheim School of Management

Eric de Bodt

Université de Lille

Marieke Delanghe

Univ. Lille Nord de France - SKEMA Business School

Richard Roll

California Institute of Technology

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Date Written: November 15, 2011

Abstract

In the 1990s, European merger regulation (EMR) was biased against foreign acquirers, especially if the deal harmed domestic rivals (i.e., protectionism). In 2002, the Court of First Instance overturned three prohibitions by the European Commission (EC) and criticized its economic analysis. These events hastened EMR reform, including amendments introduced in May 2004. With a sample of 474 merger proposals submitted to the EC during 1990–2007, we show that the EC’s protectionism from the 1990s did not extend into more recent periods. The change of policy toward foreign acquirers seems rooted in Court judgments of 2002 and subsequent regulatory reforms.

Keywords: mergers and acquistions, regulation, protectionism

JEL Classification: G34, G38

Suggested Citation

Aktas, Nihat and de Bodt, Eric and Delanghe, Marieke and Roll, Richard, Market Reactions to European Merger Regulation: A Reexamination of the Protectionism Hypothesis (November 15, 2011). Available at SSRN: https://ssrn.com/abstract=1961188 or http://dx.doi.org/10.2139/ssrn.1961188

Nihat Aktas

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Eric De Bodt

Université de Lille ( email )

1 place Déliot, BP381
59020 Lille Cedex
France
+03 20 90 74 77 (Phone)
+03 20 90 77 02 (Fax)

HOME PAGE: http://www.edebodt.net

Marieke Delanghe (Contact Author)

Univ. Lille Nord de France - SKEMA Business School ( email )

Avenue Willy Brandt
Lille, 59777
France

Richard Roll

California Institute of Technology ( email )

1200 East California Blvd
Mail Code: 228-77
Pasadena, CA 91125
United States
626-395-3890 (Phone)
310-836-3532 (Fax)

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