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The Warsaw Voice » Law » July 30, 2008
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M&A Deals Under Scrutiny
July 30, 2008   
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Szymon Chwaliński, a lawyer from Gide Loyrette Nouel law firm, talks to Beata Gołębiewska.

The mergers and acquisitions scene is quite busy in Poland at the moment. Finalizing some transactions requires the prior consent of the Competition Authority. Does the increased number of M&A transactions affect merger proceedings in any respect?
Statistics for proceedings before the Polish Competition Authority-the President of the Office for Competition and Consumer Protection-do not indicate any major upsurge in the number of the cases being dealt with. However, there has been a change in the amount of attention paid by the Authority to investigating some transactions. Consequently, for a growing number of investors merger proceedings are not a mere formality that can be hurried through.

Which investors may be experiencing difficulties?
Financial investors (investment funds) are not very affected by the merger proceedings.

Industrial investors, however, are usually active on the same markets as the acquired companies and face much more detailed scrutiny. The Authority examines the market thoroughly before granting clearance, to find out whether there are any serious threats to competition resulting from the deal.

Why is the supervision of mergers becoming stricter?
The consolidation of certain sectors is gaining momentum. More and more home-grown and foreign based businesses are finding limits to horizontal growth. Acquisitions seem for them a more efficient way to grow. The Authority is becoming more vigilant to prevent any market player from becoming dominant on any market, even local markets.

Do investors take due account of the merger control risks?
Usually investors are aware of the competition law questions related to the transaction. However, sometimes they underestimate the informational burden related to the notification, as well as the risks of an unfavorable outcome of such proceedings-such as conditional clearance or even prohibition to proceed.
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