BusinessCorporate FinanceEurope pushes to clear M&A obstacles

Europe pushes to clear M&A obstacles

European Commission considers proposals to speed up cross-border deals in financial services

The European Commission is pushing for new reforms that will make it easier
for financial services companies to close cross-border mergers and acquisition
deals.

Under present rules authorities can block deals in the sector by simply
asserting that the ‘sound and prudent management’ of a target company is at
risk.

After requests from 25 EU governments, however, the EC is now planning to
revise its procedures and make it more difficult for regulators to block
cross-border financial services deals.

The new rules will introduce a more specific set of criteria for determining
when the management of a target company is actually at risk. These criteria will
include the experience and reputation of the acquirer, the financial soundness
of the buyer, compliance with EU directives and the risk of money laundering and
terrorism.

The assessment period for a deal will also be cut from three months to 30
days to speed up deals, and authorities would only be able to ‘stop the clock
under’ under strict conditions.

Charlie McCreevy, commissioner for the internal market and services, said the
new rules would ‘leave no room for political interference or protectionism’. He
added that if Europe was serious about improving growth and enabling its
financial services group to compete globally there had to be reform.

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