Concentration of Undertakings

A critical evaluation of competitors’ merger is the third pillar of protection of competition. Business mergers are commonplace on the economic scene. The larger players buy out the small ones in order to gain a more influential market position. Antimonopoly authorities therefore look at the largest mergers that stand out in various markets. If there is a prospect of a distortion of competition in the wake of a proposed merger, the participants are asked to give appropriate commitments. Only then is the merger approved. In isolated cases, the proposed merger may be prohibited.

The Office also dealt with cases, when the competitors, whose concentration had not been cleared, applied again for the concentration approval. If there were changes on the market in the meantime, companies have the chance to succeed with their new proposal. The Office thus e.g. approved the concentration of two largest  companies on the market with bakery products in the Czech Republic in the beginning of 2006, despite the fact that this concentration was previously prohibited. In the new administrative procedure it has been taken into account the fact that by the concentration created subject will not be, unlike its rivals, from the view of the access to raw materials self-sufficient, and it will have to get these materials by deliveries. The reason is that during the year 2005 one of the merging subjects sold the property share in the area of mill products. Even though the subject with the leading position has been created, the market shares of other bakery producers do not show a considerable distance. The purpose of the protection of competition in the area of mergers is not to thwart business plans but to intervene only when the proposed concentration is capable to distort the competition in the market..

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