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

38 Pages Posted: 9 Oct 2012

See all articles by Nihat Aktas

Nihat Aktas

WHU - Otto Beisheim School of Management

Eric de Bodt

NHH-Caltech

Marieke Delanghe

Univ. Lille Nord de France - SKEMA Business School

Richard Roll

California Institute of Technology

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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 W., 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)

NHH-Caltech ( email )

18B AVENUE BECHET
Kraainem, 1950
Belgium
+32 475 24 01 69 (Phone)

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

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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