Merger Control Updates: Increase in Thresholds and Asset Swaps
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Reform: An Expected Increase in Merger Notification Thresholds
2025 has been a record year for the French Competition Authority for merger control activity: 328 transactions were reviewed and approved, 6% of which were subject to commitments. In a context of budgetary constraints, the reform raising notification thresholds has been eagerly anticipated. This forms one of the key elements of the Economic Simplification Bill adopted by French Parliament on April 14 and 15. Article 8 provides for an increase in the notification thresholds applicable to concentrations reviewed by the French Competition Authority.
While expected, this reform is accompanied by parallel discussions within the Authority on the possible introduction of a “call-in” power, which would allow it to review transactions falling below the thresholds. While this may seem paradoxical, it actually reflects the Authority’s effort to adapt to market realities. In fact, sub-threshold transactions are not necessarily the least harmful to competition, as recently illustrated by the Doctolib/MonDocteur case (FCA Decision No. 25-D-06 of November 6, 2025). Several European neighbours have also adopted similar dual approaches, notably Germany, which has introduced various types of thresholds, including thresholds based on transaction value and the significance of the target’s activities in Germany.
New Thresholds for Merger Control
The law provides that a concentration is subject to ex ante review when the following cumulative conditions are met:
- The total worldwide turnover (excluding taxes) of the undertakings concerned exceeds €250 million (instead of €150 million);
- The turnover generated in France by at least two undertakings exceeds €80 million (instead of €50 million);
- Council Regulation (EC) No. 139/2004 of January 20, 2004 on the control of concentrations between undertakings does not apply.
For the retail sector, the thresholds applicable to concentrations not covered by the EU Regulation are now:
- Total worldwide turnover (excluding taxes) of all parties exceeds €100 million (instead of €75 million);
- Total turnover (excluding taxes) generated in France in the retail sector by at least two undertakings exceeds €20 million (instead of €15 million).
However, the thresholds applicable to overseas French departments and territories remain unchanged to ensure heightened vigilance regarding concentration risks in those areas.
Although Article 8 provides that the new thresholds under Article L.430-2 of the French Commercial Code will apply from the first day of the fourth month following publication of the bill, the exact date of entry into force is not yet known due to the current referral to the Constitutional Council.
Objectives of the Reform
Unchanged since 2004, the thresholds had become outdated in light of economic developments, including cumulative inflation of nearly 40% and nominal GDP growth of 65% between 2004 and 2023, leading to an increase in the average turnover of companies operating in France.
This situation resulted in a significant rise in notifications submitted to the French Competition Authority, which required increasing resources to review transactions that often posed no competition concerns.
According to the French Competition Authority, 20% to 30% of currently notified transactions will no longer be notified under the new thresholds. This reduction should ease the administrative burden on companies, particularly SMEs, while allowing the Authority to focus its resources on more problematic transactions, including predatory acquisitions and cases referred for examination by the European Commission.
Absence of a Qualitative Criterion
The law is somewhat surprising as it is limited to raising turnover thresholds without introducing any qualitative criteria, despite such criteria being discussed during the public consultation launched by the French Competition Authority in January 2025 on the review of below-threshold transactions.
The FCA is still seeking an alternative solution to reliance on Article 22 of Regulation 139/2004 to capture such transactions, following the Illumina/Grail judgment of the Court of Justice of the European Union on September 3, 2024, which put an end to the European Commission’s broad interpretation. The Court held that Article 22 was not intended to allow Member States with national merger control regimes to refer transactions falling below their own thresholds to the Commission. While the Commission was found not to have jurisdiction in such cases, the Court emphasized that it is for EU and national legislators to amend their rules to enable control of mergers likely to significantly affect competition.
In this context, the French Competition Authority indicated in April 2025 that it is continuing to consider introducing a call-in power based on a combination of quantitative and qualitative criteria, particularly aimed at capturing predatory acquisitions in innovative sectors. It also announced its intention to publish guidelines should such a mechanism be adopted.
German law illustrates a hybrid system based on quantitative and qualitative criteria. On the one hand, it sets traditional turnover-based thresholds: notification is required where combined global turnover exceeds €500 million, with at least one undertaking generating more than €50 million in Germany and another more than €17.5 million. On the other hand, an alternative threshold based on transaction value applies where the first two thresholds are met but not the third. In such cases, the transaction is reviewable if its value exceeds €400 million and the target has significant activities in Germany. This system allows the Bundeskartellamt to review acquisitions of innovative companies with low turnover, albeit at the cost of complexity, which has required detailed guidelines. Many practitioners therefore consider that such a system would not be desirable in France.
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The French reform, currently limited to raising turnover thresholds, does not at this stage provide for any mechanism equivalent to the German system. It may therefore represent only a first step, particularly in light of the Authority’s ongoing discussions on a potential call-in power (FCA press release of April 16, 2025).
The CJEU Puts an End to the RWE/E.ON Saga: A Complex Asset Swap Does Not Constitute a Single Concentration
In two judgments delivered on March 19, 2026, the Court of Justice of the European Union confirmed that a complex asset swap structured as three transactions between RWE and E.ON does not constitute a ‘single concentration’ within the meaning of Article 3 of Regulation No. 139/2004. However, it recalled that such transactions may fall within the scope of anticompetitive agreements and be subject to separate proceedings.
A Complex Asset Swap
The German companies RWE and E.ON operate across the entire energy supply chain, including generation, transmission, and distribution.
In 2018, they carried out a complex asset swap structured in three separate transactions:
- RWE’s acquisition of certain generation assets from E.ON;
- E.ON’s acquisition of distribution and retail activities, as well as certain assets, from RWE’s subsidiary innogy;
- RWE’s acquisition of a 16.67% stake in E.ON.
In 2019, the first two transactions were authorized by the European Commission (cases M.8871 and M.8870), while the third was approved by the Bundeskartellamt (case B8-28/19).
Eleven German municipal authorities challenged the Commission’s decisions before the General Court of the European Union.
By judgments of May 17, 2023 and December 20, 2023, the General Court dismissed the actions against the approval of the first and second transactions.
Nine of the eleven authorities then appealed to the Court of Justice.
By judgments of June 26, 2025, the Court upheld the Commission’s approval of the first transaction (RWE’s acquisition of E.ON’s generation assets).
Criteria for a ‘Single Concentration’
By judgments of March 26, 2026, the Court dismissed the appeals concerning the second transaction (E.ON’s acquisition of innogy’s distribution and retail activities and certain generation assets).
The applicants argued that the three transactions formed a single concentration that should have been assessed jointly by the European Commission.
The Court rejected this argument, stating that the three transactions, taken together, cannot be classified as a ‘single concentration’. They do not constitute a series of interdependent transactions aimed at conferring control over one or more target undertakings to the same acquiring entity or entities.
Similarly, the French Competition Authority considers that asset transfers constitute a single concentration only if control is acquired by the same undertaking(s) (Merger Control Guidelines, §§82–83).
For example, in a decision in the rendering sector, the French Competition Authority found that reciprocal transfers of business assets constituted five separate concentrations, as control was not ultimately acquired by the same undertaking(s) (Decision No. 24-D-05 of May 2, 2024, §122).
Application of Article 101 TFEU
The applicants argued that Article 101 TFEU should apply to the three transactions, which they viewed as an agreement to divide German electricity and gas markets. They claimed that Regulation No. 139/2004 could not limit the scope of the Treaty’s prohibition on cartels and relied on the Towercast judgment to assert the primacy of Articles 101 and 102 TFEU.
The Court rejected this argument, recalling that once a concentration is notified, its review falls under Regulation No. 139/2004, which provides preventive control in light of Articles 101 and 102 TFEU. The Towercast judgment was deemed irrelevant, as it concerned a below-threshold transaction.
The Court added that if the applicants suspect an anticompetitive agreement between RWE and E.ON, they may file a separate complaint leading to an investigation under Regulation No. 1/2003.
However, the assessment of evidence relating to a potential cartel does not fall within merger control under Regulation No. 139/2004, nor within judicial review of the Commission’s clearance decision.
- Assessment of the Minority Shareholding
The applicants argued that the Commission should have included the third transaction (RWE’s minority shareholding in E.ON) in its merger assessment.
The Court confirmed that the Commission was not required to examine a transaction that had not been notified to it and had been approved by the Bundeskartellamt.
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In conclusion, although the case was complex, the outcome is relatively conventional: interdependent transactions can only be classified as a single concentration if they result in control being exercised by the same undertaking(s). Nevertheless, such transactions remain subject to competition law and may still be assessed under Article 101 TFEU.