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

38 Pages Posted: 9 Oct 2012  

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

Multiple version iconThere are 3 versions of this paper

Date Written: December 5, 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.

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 (December 5, 2011). 29th International Conference of the French Finance Association (AFFI) 2012. Available at SSRN: https://ssrn.com/abstract=2083645 or http://dx.doi.org/10.2139/ssrn.2083645

Nihat Aktas

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Eric De Bodt (Contact Author)

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

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

Avenue Willy Brandt
Lille, 59777
France

Richard W. 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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