Controlling mergers and acquisitions to foster growth, protect competition

Mergers and acquisitions (M&A) have long served as a mechanism for corporate growth, restructuring and adaptation to changing market conditions. These transactions tend to move in periodic cycles, often reflecting broader economic trends, regulatory environments and strategic priorities within industries.
For example, the current M&A landscape is being shaped by several key factors. Central banks in major economies – including the US Federal Reserve, the European Central Bank and the Bank of England – implemented interest rate cuts in 2024, with some introducing further reductions in 2025.
Additional cuts are anticipated, albeit at varying paces, lowering borrowing costs and making debt-financed deals more attractive, particularly in capital-intensive sectors. Yet, while some sectors and regions have seen a positive momentum in global M&A and investment activity, others have slowed under the weight of economic uncertainty and geopolitical tensions.
Historically, periods of accelerated globalisation have accelerated cross-border M&A activity. The early 2000s saw numerous enterprises pursuing expansion through acquisitions, creating truly global corporations. A prime example is BP’s 1998 merger with Amoco, which transformed the British oil company into a major player in the US market. In recent years, BP has continued to use M&A strategically, including to develop its presence in the low-carbon energy sector.
However, M&A activity is not immune to economic downturns. The 2007-2008 financial crisis illustrated how rapidly changing market conditions reshape corporate strategies. During this period, many firms responded by divesting non-core assets to reduce debt and strengthen liquidity, while others pursued opportunistic acquisitions of distressed assets. The acquisition of Lehman Brothers’ US investment banking operations by Barclays in 2008 stands as a notable example of M&A activity.
Companies pursue M&A for various reasons. Market expansion is a prime motivator, allowing firms to quickly establish presence in new geographic regions or product segments.
M&A also serves as an efficient means to acquire new technologies or specialised expertise, particularly in knowledge-intensive industries. Operational efficiencies and cost synergies frequently drive consolidation within mature industries, while diversification through acquisition can help companies mitigate risks in volatile markets.
All full-function joint ventures must be notified, irrespective of the turnover thresholds
While the motives for M&A are well understood, the broader implications of these transactions have sparked considerable debate. To understand the full picture, it is necessary to weigh their potential benefits against the risks they may pose to market competition and consumer welfare.
For much of the 20th century, M&A were widely viewed as beneficial to the economy. The logic was straightforward in that if a buyer is willing to pay more for a company than its current value, it likely means the buyer thinks he can run it more efficiently, for example by cutting unnecessary costs or boosting investment and output. M&A activity was seen as a path to better resource allocation, and until the 1990s, many countries had few rules in place to control such transactions.
This positive stance towards M&A was further reflected in the EU with the introduction of the EU Merger Regulation that came into force in 1990. It was aimed to have a more streamlined, EU-wide system for reviewing large cross-border deals by reducing legal complexity and uncertainty.
However, over time, the consensus began to shift. The once widely accepted assumption that M&A naturally leads to greater efficiency and economic value started to be questioned. Former European Commissioner Mario Monti famously said: “While it seems clear that some mergers do create value and lead to efficiencies, many others – some believe more than half of all mergers – fail to deliver and indeed destroy value.”
This growing scepticism has sparked ongoing debate. Critics argue that some M&A are driven not by efficiency, but by motives such as achieving greater market power. When this happens, the consequences can be harmful, such as higher prices, lower output, reduced innovation and, in the long run, ultimately harm consumer welfare.
But besides protecting consumers, the purpose of merger control is also to preserve fair competition, create a level playing field and foster the conditions needed for sustainable economic growth.
Recognising these risks, many countries have since introduced merger control regimes. Malta, for example, implemented its merger control legislation in 2003 through the Control of Concentrations Regulations.
These rules ensure that proposed concentrations that could significantly reduce competition are carefully reviewed and, if necessary, blocked or modified.
Assessment of concentrations on local market
A proposed transaction must be notified to the MCCAA’s Office for Competition if it qualifies as a concentration and meets the turnover thresholds in the regulations. In addition, the office considers that the way the law is drafted, all full-function joint ventures must be notified, irrespective of whether the turnover thresholds are met.
Most concentrations are assessed under the simplified procedure, with decisions issued within four weeks. Standard Phase I assessments are completed in six weeks, which may be extended if commitments are offered, while Phase II cases must be decided within four months.
If parties offer commitments during Phase II, no later than three months after it starts, they may request the four-month deadline be suspended for up to one additional month to allow proper consideration of these commitments.
For further details, consult the guidance notes on mergers and acquisitions on the MCCAA website.

Melchior Vella is director general of the MCCAA’s Office for Competition.

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