MERGERS - COORDINATED EFFECTS

Mergers - Coordinated Effects



Mergers - Coordinated Effects

Introduction

This paper intends to talk about the significance of mergers from the perspective of coordinated effects. Mergers remain one of the most important and most discussed issues in recent times due to the uncertain economic and financial situations. Various economic downturns and repetitive financial distresses have caused the different companies to get involved in the mergers. There are different types of mergers which companies tend to get in. This particular paper will focus on the coordinated effects related to the mergers. Merger control is referred to the process of reviewing or rethinking about the mergers and acquisitions decisions made under competition law of antitrust. The companies working under the laws of European Union are mostly covered under such laws. The intent of such competitive laws is to make the companies run in the most appropriate manner and to ensure the positive economic returns.

The case selected for the purpose of discussion within this paper is “Sony BMG Merger” The case of Sony-BMG merger explains certain important aspects related to mergers and also related to the rules, regulations and sanctions imposed by European Union over the mergers to make sure the transparency within the transactions. The purpose of this paper is to make the reader aware about the underlying aspects of mergers with respect to the coordinated effects in today's time. The paper will be beneficial for all the business students and professionals in order to understand the basic requirements and underlying considerations that must be made while deciding upon the mergers and acquisitions. Prevention of the anti competitive consequences within the concentrations of merger control regime is assumed to be the basic purpose. There are various tests which are done to determine the basic intent of the mergers. For instance, the assessment of concentration impeding the effective competition is greatly used in European Union. Similarly, within United States and United Kingdom, the concentration levels are assessed on the basis of being substantially less competitive.

Discussion

The type of Intervention

The underlying principles and theories of the merger control regime remains quite similar all around the business world. The modern merger control are assumed to be of an ex ante nature. This ex ante nature is the review of authorities for the purpose of carrying out the assessment of the transactions related to mergers being implemented. Various concentration theories are usually related to the higher prices and output resulting in certain losses for the consumers. The antitrust authorities are all intended to face up various challenges in relation with the application of economic theories remaining within the legal boundaries prescribed by the authorities for the merger transactions. The economic theories are meant to be carefully chosen before deciding over the mergers (Lexecon, 2009 Pp. 1359-1383).

Almost sixty above nations have been appreciating the controls related to mergers and acquisitions as advanced by the European Commission and Federal Trade Commission of United States. Reviewing mergers is assumed to provide extended advantages to the overall economy ...