EU General Court orders fresh review of Liberty Global/Ziggo merger

November 10, 2017

The EU lower court has overturned a 2014 merger clearance by the European Commission (EC) following an appeal by a third party.

Overturning the clearance does not mean that the deal is now prohibited. Instead, the case goes back to the EC, and the parties have to re-notify. At best this is time-consuming for them; at worst the EC review could lead to adverse findings. Hypothetically, at least, the EC could prohibit the deal, or impose further conditions on it.

The EU General Court annulled1 the approval of the Liberty Global/Ziggo transaction for the EC’s failure to explain adequately the view taken by it that premium pay-TV sports channels should be excluded from its analysis. KPN, a third party, had raised concerns which the EC failed to address. The annulment is one of only four examples of a clearance decision being overturned, and shows the importance attached to protecting third parties. 

This protection for third parties, however, may come at the expense of uncertainty for the deal parties. The greater caution which the EC must show inevitably leads to proliferation of information requests, and longer reviews. A recent clearance decision ran to 915 pages, with approval issued almost 15 months after the deal was first announced.

Although the EU merger regulation sets strict deadlines for the formal investigation of mergers, real review schedules have grown ever-longer over the years. Preparations for filing should begin in earnest at the earliest possible stage; and long stop dates for closing should allow plenty of leeway.

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