GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth, David-Julien dos Santos Goncalves and Kaan Gürer, Linklaters
Conglomerate Mergers Conglomerate mergers are generally less likely to raise competition concerns than horizontal mergers because they do not entail the loss of direct competi - tion between the merging firms. However, competi - tion concerns may arise if the parties are active in economically related markets; ie, their products are complementary or close to substitution. Typically, this requires that at least one of the parties already has a sufficiently strong market position in one of the rel - evant markets. As with vertical mergers, in the case of collective dom - inance, the FCO will assess whether the conglomerate merger facilitates co-ordination between the dominant companies. 4.5 Economic Efficiencies The FCO will consider the countervailing benefits of a transaction. A concentration that would significantly impede effective competition may not be prohibited if the parties prove that the concentration will also have pro-competitive effects that outweigh the significant impediment to effective competition. 4.6 Non-Competition Issues The FCO does not consider factors other than com - petition issues in its decisions. The situation is different with regard to the procedure for obtaining a ministerial authorisation ( Ministerer- laubnis ) from the Federal Minister for Economic Affairs and Energy. The Minister can overrule the FCO on the basis of social or political considerations (if the con - centration’s benefits for the economy as a whole out - weigh the disadvantages for competition); however, this is rare in practice. Public interest factors that have been accepted in the past are – eg, safeguarding the technical know-how of companies that are in financial or industrial difficulties, the potential for reductions of subsidies, the long-term security of energy sup - ply, research in the health sector, the protection of employees through collective agreements and opera - tional co-determination and, most recently, know-how and potential for innovation for energy turnaround and sustainability.
For foreign direct investment and foreign subsidies rules see 9. Foreign Direct Investment/Subsidies Review . 4.7 Special Consideration for Joint Ventures In principle, joint ventures may be subject to a two - fold assessment, under both the merger control provi - sions and the antitrust rules. Under the merger control regime, the SIEC test also applies to joint ventures. The antitrust rules will additionally come into play in the case of co-operative effects, which particularly applies if the parent companies remain active in the joint venture’s fields of activity, or if they are com - peting in upstream or downstream markets. Only the extent to which the concentration, as such, creates anti-competitive concerns has to be assessed exclu - sively within the merger control process, which takes priority over the antitrust rules. Contrary to the EU merger control regime, merger clearance does not automatically entail an exemption for ancillary restraints. Moreover, the deadlines that are applicable with regard to the merger control pro - cedure do not apply to proceedings relating to Section 1 of the GCA/Article 101 of the Treaty on the Function - ing of the European Union (TFEU). Therefore, the FCO usually gives priority to the merger control review of the joint venture. In addition, it aims to analyse the joint venture under the antitrust rules and to form at least an opinion on potential infringements and pos - sible exemptions in the course of the merger control proceedings. However, it is also not unusual for the FCO to postpone this assessment until a later stage, usually after the merger control process. Should the FCO conclude that co-operation in the joint venture violates Section 1 or the GCA/Article 101 of the TFEU and that the conditions for an exemption are not fulfilled, the FCO may issue a prohibition decision, pursuant to Section 32 of the GCA. This is possible even after merger control clearance. Divergent deci - sions with regard to merger control and antitrust pro - ceedings have, in fact, already occurred in practice. Following the introduction of the SIEC test, there have been discussions about whether such a twofold assessment is still possible. Clearance of a joint ven -
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