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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Ish who wrote (14933)	12/28/2001 8:01:02 AM
From: maceng2	Read Replies (1) \| Respond to of 281500

Good morning Ish, If you are planning any big business deals in Europe next year here is a handy guide from the FT to avoid the worst pitfalls -g- news.ft.com Ten steps to getting a big deal through Brussels The European Commission is no walkover - just ask Jack Welch. But a few simple tricks can work wonders, says Francesco Guerrera The festive period is here again and chief executives, like ordinary people, will be thinking about their new year's resolutions. Increasing profits, cutting costs and keeping their job will be high on many lists but this year company chiefs should include a new item: make sure that mergers and acquisitions are not blocked by the European Commission's antitrust regulators. If you think the Byzantine machinations of the Brussels bureaucracy are far too arcane to feature on a busy executive's "to do" list, a quick call to Jack Welch, Goran Grosskopf or Henri Lachmann would make you think again. The former boss of the US industrial giant General Electric and the current heads of the Swedish packaging group Tetra-Laval and the French electrical company Schneider know all too well the powers of Mario Monti, the European competition commissioner, who has blocked important acquisitions by their companies in recent months. But for other chief executives involved in mergers, help is at hand. By following the FT Guide to Having Your Merger Approved in Brussels, they will have all the tools they need to avoid joining Mr Monti's collection of corporate scalps: 1. Never tell the Commission: "You can't possibly have a problem with this merger, so we're just waiting for a speedy approval." Brussels officials tend to consider such assuredness as cocky. Having an unshakeable belief in one's arguments is the job of Brussels officials, not yours, and they will do their damnedest to make you eat your words. It is better to take a "shrinking violet" approach, to listen carefully and say you want to meet their concerns. Never use the phrase "rubber-stamping". 2. If the deal is in trouble, do not get senior politicians to call Mr Monti. Mr Monti is more likely to stand up in Brussels' Grande Place and give a rendition of My Way than to yield to political pressure. Just ask Mr Lachmann, who prevailed on Jacques Chirac, the French president, and Laurent Fabius, the finance minister, to call the Commission to chat about Schneider's merger with rival Legrand. Result: the deal was blocked six days later. 3. Never call him "Mario". As Mr Welch found out, Mr Monti is charming and polite but not keen on US-style informalities. During the negotiations on GE's takeover of Honeywell, the commissioner declined repeated requests by the GE chief to be on first-name terms, promising to call him Jack only at the end of the probe. When the fatal name was uttered, Mr Welch knew the game was up. 4. In your dealings with the Commission, use key jargon phrases such as "low barriers to entry", "countervailing buying power" and "transparent pricing". These expressions may appear to be obscure lawyer-speak but they will go a long way to persuade the Commission that your company is one of the good guys just trying to earn an honest living in a tough, competitive market. It is a good idea to avoid words such as "dominance", "monopoly" and "high prices". 5. Do not say: "This deal was cleared by the US regulators in two weeks. What are you waiting for?" After a dispute over GE/Honeywell, the relationship between Brussels and Washington is strained, to say the least. Treat your dealings with Brussels as the beginning of a romantic relationship: the Commission wants to be loved for what it is and cannot stand comparisons with the high-powered American you used to date before. 6. Respect deadlines. Brussels is stricter than most theatres: latecomers will not be admitted, especially when it comes to discussing disposals to get the merger cleared. Miss the deadline of the end of the third month of the Commission's four-month probe - the last point at which proposals for disposals can be submitted - and you will have to deal with an irritated, rushed regulator with a perfectly good reason to block your deal. 7. Keep your discussions with officials brief and to the point. Tales of chief executives who rambled on for hours about their deal, their company, their family and schoolfriends are recalled often, but never fondly, by Mr Monti's people. There is nothing like boredom to get a bright mind thinking about the bad effects of a merger on competition. 8. Profess undying love for consumers. If there is one thing the Brussels competition buffs love more than deadlines, it is consumers. Their job is to make sure the public is not ripped off by nasty would-be monopolists. Any multicoloured graphs showing how your merger will reduce prices for ordinary people will be gratefully received. 9. Be nice to your competitors before a merger. They could be your worst enemies during a Brussels investigation. As GE found out, well connected rivals can blow a hole in your merger by whispering interesting information in the Commission's ear. 10. "See you in court" is not the best way to respond to a blocked deal. You may see the Commission there - but it is far more likely that your successor will. The European Court of Justice works on a geological timescale when it comes to reviewing merger decisions. When the court decision does come, your one-time merger partner will probably have been swallowed up by one of your rivals or have gone bust. And remember, just like diets, fitness classes and compulsory military service, competition is what you make of it, so try to make it fun.