Mergers, Acquisitions and the Completion of the Internal Market

Abstract

The completion of the European Internal Market has stimulated considerable interest in the corporate strategies that will be developed by corporations to cope with the demands and opportunities presented by the emerging European economy. Since the publication of the White Paper on completing the Internal Market (Commission of the European Communities [CEC] 1985), the Commission² has been enthusiastic about the role of external strategies such as joint venture and merger in stimulating and reinforcing the effective operation of the completed market. Elsewhere (Chapter 10 of this volume) we have argued that the Commission’s view that 1992 will directly stimulate industrial activity such as joint venture is misplaced. In this chapter we consider the parallel question of merger in the context of 1992, and conclude that there is serious cause for concern that the acceleration of the rate of cross-frontier merger activity may be to the detriment of the completed market and may reduce both competition and efficiency.

Originally published in K. S. Hughes (ed.) European Competitiveness, 1993, pp. 161–80. Reprinted here by kind permission of the publisher, Cambridge University Press.