Merging deals and other agreements of the largest businesses in 2016 had affected the competition development in twelve different industries and nearly one billion euros large segment of Latvia’s national economy, Competition Council reports.
The largest merging deals of 2016, both in regards to the number of involved businesses, the total number of cases and the total level of financial influence, had impacted non-specialized retail store network in Latvia the most. Other segments include wholesale trade, agricultural, tobacco and dairy industry, explains CC communications specialist Paula Vilsone.
The report on the situation on different markets mentions that consolidation of national producers would enhance exporting capabilities in a long-term perspective. CC also states that merging deals have had no major impacts on the structure of different markets or the state of competition, nor have those deals resulted in the formation of dominating parties on any of the impacted markets.
Analysing merging trends last year, CC noticed a moderate increase of foreign investments, which helped enhance the competitiveness of different sectors on an international level, as well as develop stability of different businesses.
CC allows that merging may continue on different levels and among different businesses. This could bring different benefits to competition – wider variety of goods and more innovative solution. CC also predicts that the search for different solutions to provide businesses with more freedom to use the digital environment will continue.
At the same time, experts say it is possible to conclude about a gradual convergence of local and regional markets, which means wider consumption options and innovative solutions in many different fields of business. It will also help create stronger competition, forcing businesses to not only adapt to the changing commercial environment and dynamic competition, but also offer new solutions to satisfy demands of consumers.
Permission from the Competition Council for merging deals is necessary if total turnover of parties involved in the merging process was no less than EUR 30 million in the previous financial year in Latvia and if total turnover of at least two parties involved in the merging process in Latvia was no lower than EUR 1.5 million in the previous financial year.
Merging operations that contribute to the development of the manufacture of goods or their realization and are intended to benefit the consumer are not applied with restrictions. Merging agreements are not allowed to apply restrictions that are not necessary for the accomplishment of said goals. They are also not allowed to liquidate competition within a specific market part. All merging plans have to be reported to CC. This institution then assesses the situation and makes the decision to either allow or forbid the deal to progress.