EU Almunia:Proposed Deutsche Borse, NYSE Merger Requires Sophisticated Scrutiny
08 Settembre 2011 - 3:29PM
Dow Jones News
The transformation of financial markets by new technologies
requires more sophisticated analysis to preserve competition,
European Union Competition Commissioner Joaquin Almunia said
Thursday.
The proposed merger between Deutsche Borse (DB1.XE) and NYSE
Euronext (NYX) is testimony to this, as it would give the merged
company the leading position in derivatives trading in Europe, said
Almunia in prepared remarks to the Fordham Competition Conference
in New York.
"We are looking at this transaction under several angles,
including the potential loss of head-to-head competition between
the parties, the risk of lower innovation in products and
technology, and the impact of the transaction in related markets
such as clearing," he said.
Changes in the financial sector will also keep the EU focused on
how mergers affect the competitive environment of market data,
indexes, trading technology, access to collateral, as well as
clearing and settlement.
As examples, Almunia noted the recent antitrust investigations
of Markit, the leading provider of financial information in the
credit default swap market, and ICE Clear Europe, a clearing
house.
"These cases show that, since the spectacular growth in size and
complexity of financial services, oversight of the financial sector
must extend beyond traders and commercial or investment banks to
include infrastructure owners, intermediaries, and information
services providers," he said.
Almunia also said it is necessary to look closely into the
potential mergers of hard disk drive companies and other
information and communication technology, because of the high
growth potential of these markets. For instance, the planned
acquisition of Samsung Electronics Co.'s (005930.SE) hard-disk
operations by Seagate Technology Inc. (STX) and Western Digital
Corp.'s (WDC) bid to buy Hitachi Ltd.'s (HTD) disk drive unit are
now both in phase two of EU investigations.
"Our initial investigations told us that both deals could raise
concerns," he said. "If both mergers were approved, there would be
only three or perhaps two players per product market."
He said international competition authorities need to work more
closely together, given the global nature of business today, adding
that cooperation will likely intensify with agencies in emerging
economies too.
"I would like to remind the lawyers in this hall and their
colleagues elsewhere that playing one authority against the other
does not pay. At the end of the day, it will only complicate the
review for everyone," said Almunia.
However, he said populist arguments for screening foreign
investment into the EU, including mergers and acquisitions, is "a
really weak basis for policy-making."
-By Riva Froymovich, Dow Jones Newswires; +32 2 741 1489;
riva.froymovich@dowjones.com
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