Reckon: Comment on Minister's Brisa/AEO merger decision


Brief paper (2 pages in Portuguese, PDF) commenting on the decision (14 pages in Portuguese, PDF) by the Portuguese Economics and Innovation Minister to allow the merger of the motorway operators Brisa and Auto-Estrada do Oeste (AEO) on the grounds of national interest. The two operators had appealed to the Minister after the Autoridade da Concorrência (AdC) had prohibited the merger on competition grounds (AdC press release, 4 pages in Portuguese, PDF). The Minister reversed AdC's decision as it found that the merger will stimulate Brisa's R&D efforts and improve Brisa's ability to compete internationally; both effects were regarded as being in the interest of the national economy and considered to outweigh any undesirable competition effects the merger might have.

In the paper, Pedro Fernandes argues that there are gaps in the reasoning put forward by the Minister. No evidence is put forward to back the link between the size of Brisa's operations within Portugal and its ability to innovate or its ability to compete internationally. Nor does the decision put forward an analysis to test whether allowing the merger is proportionate to the objective of improving Brisa's performance. The paper also notes some shortcomings in the decision's analysis of the effects of the merger on competition.

For further information or advice please contact Pedro Fernandes.

Filed under Merger control, Reckon LLP.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

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