There Is Always a First Time: The European Commission Applies the Failing Firm Defence to an Unprofitable Division in NYNAS/Shell/Harburg Refinery
4 Pages Posted: 2 Jan 2015
Date Written: December 30, 2014
In the NYNAS/Shell/Harburg Refinery case the European Commission has approved a merger operation by applying for the first time the failing firm defence to an unprofitable division of an otherwise healthy firm. The Commission found that the merger would improve the competitiveness of capacity-constrained NYNAS by allowing the latter to buy the productive assets it needed to supply the EU demand. Absent the merger, such assets would exit the market, leaving the available production capacity below the EU demand level. The Commission also found that the merger would generate relevant economic efficiencies. For these reasons, the Commission concluded that the notified merger would have a positive impact on competition, resulting in lower prices than those expected in case of prohibition of the transaction.
Keywords: EU merger control, failing firm defence, merger efficiencies
JEL Classification: K21, G34
Suggested Citation: Suggested Citation