The Political Interface of Financialisation and the Regulation of Mergers and Acquisitions in the EU

Abstract

Prior to the outbreak of the current global economic and financial crisis, the sheer number and volume of mergers and acquisitions set historically unprecedented records. A vast share of these transactions were undertaken by short-term oriented financial market actors, including private equity houses, hedge funds and other institutional investors. The article explains the adoption and ensuing adaptations of the supranational merger control at the level of the European Union (EU) on the basis of a critical political economy perspective. It argues that ever since its inception, EU merger control regulation primarily served to facilitate economic concentration, which was reinforced by a permissive stance of the European Commission. Alongside processes of financialisation and increased corporate reliance on financial market capitalisation, EU merger control underwent a substantive reform and additional adaptations, which in important ways sustained financial sector induced mergers.