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Peru: Is merger control the future?

A couple of months ago, the debate on the control of mergers and acquisitions sparked into life again

Anahi Com
A couple of months ago, the debate on the control of mergers and acquisitions sparked into life again. Since the late 1990s, with the enactment of the regulations for certain activities in the electricity sector, there has been debate over whether it is appropriate to enact merger control regulations.

Merger control implies analysing transactions under applicable antitrust and competition laws. The major concerns around merger control relate to whether it limits effective competition, and creates or increases the dominant position of a player.

There are many challenges to regulating the ideal economic concentration. The first hurdle would be trying to determine situations which might require control. Therefore, regulations would need to set guidelines on what could be deemed as a merger. In foreign frameworks (and our local law applicable to certain companies in the electric sector), the control is not limited to mergers but to situations such as minority acquisitions or asset acquisitions, where there could be an attempt against a competitive environment.

Whether it is a pre-control or a post-closing control is also an issue to bear in mind. In South America, we have examples of both types of control and review, and lawyers in jurisdictions that have enacted such regulations struggle with their application. The agencies in charge of merger control are never completely free of political interests, which sometimes cause the proceedings to take longer than expected.

Before adopting the many types of concentration regulations that could be designed, we should look at whether the Peruvian market is mature enough to bear such controls, and whether the agency in charge is capable of performing such control.

Anahi Com

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