Minority Shareholdings in EU

Abstract

This Master Thesis investigates the welfare impact and applicability of the existing EU competition rules on horizontal non-controlling minority shareholding acquisitions in EU. EU and most of the member countries do not have regulation on non-controlling minority shareholding acquisitions, which emphasizes the need to investigate the scope of TFEU art. 101, 102 & EU merger control. The thesis consists of; a legal analysis, an economic analysis and an integrated analysis. Firstly, the legal analysis of the framework of the EU competition rules namely, TFEU art. 101, 102 & the EU merger control is assisted by EU case-law to find the applicability. The thesis finds that the current EU competition rules constitute legal adversities and inflexibilities for the European Commission and competition authorities across EU. Secondly, the overall purpose of the economic analysis is to investigate the consumer- and social welfare. Economic theory on price- and market structure, incentive theory, and the StructureConduct-Performance paradigm will be used to investigate the economic impact of non-controlling minority shareholding acquisitions. The thesis finds that horizontal non-controlling minority shareholding acquisitions changes firms incentive- and behavioral structure and as a result could lead a decrease in consumer- and social welfare. And finally, the integrated analysis discusses the need for regulation on non-controlling minority shareholdings in EU, and how the regulators should approach it. In the discussion of regulation, the views of prominent economists and the European Commission is held together to determine the need for future regulation on non-controlling minority shareholdings. To determine, what the possible regulation should achieve in terms of efficacy Pareto- and Kaldor-Hicks efficiency is evaluated. The White Paper developed by the European Commission on non-controlling minority shareholdings is evaluated and held together with the comparative analysis to develop recommendations for possible regulation. The recommendations developed in this thesis are based on the findings of the legal, economic and integrated analysis and aim to highlight the areas of importance the European Commission should consider, when developing regulation on noncontrolling minority shareholdings