Mario Monti, Europe’s bad boy antitrust czar who famously fought with Jack Welch, has been getting his wings clipped by none other than his own European Union.
Europe’s top appeals court has overruled Monti, the European Competition Commissioner, three times in four months – allowing mergers that he had hoped to block to go forward instead.
“These decisions are very good and pro-economic growth,” said Larry Kudlow, CEO of Kudlow & Co. “It takes away the big protectionist barriers in the European Union.
Monti admitted it was a “tough week for the commission’s merger control policy and obviously for me. I will endeavor to do my utmost to ensure that this does not happen again.”
It’s a big change for Monti, who was at the top of his game when he refused to allow Jack Welch’s General Electric to buy Honeywell in a proposed $47 billion deal.
That deal had already been approved by U.S. regulators, but was blocked by the EU – causing howls of outraged protest on this side of the Atlantic.
The EU seems to have heard the cries. A European court yesterday overruled Monti’s veto of a proposed $1.6 billion merger between Tetra Laval, one of Europe’s biggest packaging companies, and Sidel, which makes two-thirds of the plastic Coca-Cola bottles in the world.
Earlier this week, it rejected his veto of the proposed merger between Schneider Electric and Legrand, two electric equipment makers.
Back in June, Monti was handed his first defeat when the courts allowed MyTravel Group and First Choice Holidays to merger over his objections.
“It’s a slap at Monti,” Kudlow said. “We think Europe will now become a more hospitable place for global capital, so over longer-term periods, you’ll see plenty of cross-border acquisitions.”
Reacting to the recent string of losses, Monti said he will propose updated merger rules by the end of the year.
“The need for us to become more persuasive in economic analysis, as well as to be even better equipped from the point of view of the safeguard of the rights of the parties, are improvements badly needed,” Monti said.
Because of criticism dating back to the GE/Honeywell deal, which was squashed in 2001, the EU is re-examining how it regulates proposed mergers. But Monti said he would not be overhauling the entire system.
“Defeats at court aren’t a reason to overthrow the system,” he said. “You strengthen your authority if you can continue to be firm in refusing all political and business pressure while admitting errors and improving your economic analysis.”
Critics disagree and are expecting a major reorganization of the Commission’s practices and policies.
“Monti has to make substantial changes in procedures,” John Temple Lang, an antitrust lawyer who quit the Commission in 2000 to join New York law firm Cleary, Gottlieb, Steen & Hamilton, told Bloomberg.
3-deal Monti
Since July 2001, when European Union bigwig Mario Monti refused to allow GE’s $47 billion acquisition of Honeywell, sentiment in the EU has shifted. Monti has been overruled three times by an EU appeals court allowing the following mergers to move forward:
* In June, courts allowed MyTravel Group and First Choice Holidays to merge, squelching Monti’s objections.
* Earlier this week, the appeals court rejected Monti’s veto of the proposed merger between two electric equipment makers.
* Yesterday, the court overruled Monti’s veto of a proposed $1.6 billion merger between one of Europe’s biggest packaging companies and the maker of two-thirds of the plastic Coca-Cola bottles in the world.