Merger Control - Divestiture Commitments31/07/03 / cata_european-union-news

On 2 May 2003 the Commission published Model Text for Divestiture Commitments and Model Text of Trustee Mandates, both text being supplemented by Best Practices Guidelines. These texts are designed to be of assistance to notifying undertakings submitting commitments to the Commission under EC Merger Regulation ("ECMR") with a view to obtaining clearance of a merger that would otherwise lead to the creation or the strengthening of a dominant position impeding competition. Both texts, prepared in line with experience gained from the application of the Commission’s notice on remedies acceptable under the ECMR of 2001, aim to increase the transparency, effectiveness and consistency of negotiations with the Commission and implementation of divestiture commitments.

The Model Text for Divestiture Commitments deals with clear description of commitments to divest, the divested business, the divestiture procedure and periods and obligations of the parties to a merger ("Parties"). Further, provisions on related commitments comprising preservation of viability, marketability and competitiveness of divested business, hold-separate obligations of the Parties, protection of competitively sensitive information, non-solicitation and performance of due diligence by prospective purchaser are included. Finally, requirements to be met by the prospective purchaser, the approval process, conditions for appointment of Monitoring and Divestiture Trustees as well as their duties and obligations are set out. It also contains a review clause that allows the Commission to extend the periods specified in the commitments or to modify the undertakings in the commitments.

The other model text represents a standard mandate contract to be concluded between the divesting party and the Monitoring and Divestiture Trustee(s). It governs mainly rights and obligations of the Trustee(s), duties of the divesting Party towards the Trustee(s), provides the conditions of its termination and cases of Commission’s involvement. Also Trustee related provisions on conflict of interest, remuneration, indemnity and confidentiality are to be incorporated in the mandate.

The Models Texts are not legally binding upon Parties. Where appropriate, they may be applied also in cases involving commitments other than divestiture commitments.