RIP the MTF. For those not versed in EU acronyms, this translates as may the Mergers Task Force (MTF), now effectively disbanded, rest in peace.
Now you might be thinking, “What do I care about a bunch of Eurocrats?” But just ask French electrical company Schneider and Scandinavian giant Tetra Laval, which both had mergers improperly turned down by the MFT. Ask any of your major clients who may one day conceivably want to do a merger.
In fact, ask Peter McHugh, chief executive of MyTravel. The holiday company, formerly known as Airtours, is in dire financial trouble, but if its deal to acquire rival First Choice had gone through in 1999, things might well be different.
McHugh has other things on his mind though: last week, he unveiled round two of Slaughter and May v the European Commission (EC).
Last time, when the Court of First Instance (CFI) overturned the regulator’s decision to block Airtours’ merger, it was principles at stake. This time, it’s money.
Slaughters, which advised the company on the original merger, may well get its revenge. It has instructed Spycatcher veteran David Pannick QC of Blackstone Chambers. Pannick is one of the top 10 billers in the UK, so you know MyTravel means business.
The EU’s judicial system is not a speedy beast and the MTF may be consigned to the scrapheap of history before Pannick hits the courtroom.
So what will replace the MTF? From 2004, you’ll go to one of four sectoral units, depending on your client’s business. MTF staff will be subsumed into those units, which will cover all cartels, state aid and merger cases in their sector.
Notwithstanding the criticisms of the CFI, the MTF was viewed as the praetorian guard of the Competition Commission. One view is that its staff were professional, good at sticking to timetables and generally good with lawyers – now they’ll be mixed in with the hoi polloi who work on cartels and state aid cases.
But the move by Competition Commissioner Mario Monti to scrap the MTF does not come as a complete surprise. It seems that the EC sounded out law firms and corporates some months ago, so big business may not be the real loser. The real loser is probably the MTF head Gotz Drauz, who is apparently waiting to be moved onto state aids, but is looking increasingly like a political scapegoat. So, RIP the man who gave us GE-Honeywell.