The European Court of Justice has ruled that only “full-function” joint ventures will be subject to EU merger control, a clarification to the law that has been widely welcomed.
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The creation of a joint venture (JV) between two or more companies, using a company that was previously controlled only by one parent, is not subject to EU Merger Regulation (EUMR) where the resulting entity is not an independent player on the market, the European Court of Justice (ECJ) has ruled.
In Austria Asphalt v Bundeskartellanwalt, the ECJ held that the formation of a JV can only be subject to the EU Merger Regulation (EUMR) if it is a “full-function” JV—that is, it is active on the market as an independent entity, having enough assets, staff and financial resources to carry its business independently of its parent.
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