COMPETITION • EUROPEAN LAW • MERGERS
There is joint control where the parent companies are required to agree upon the strategic decisions of the controlled undertaking regardless of whether the share in the capital of the joint venture is equally or unequally allocated. The acquisition of a minority stake may give its operator a decisive influence within a joint venture and therefore joint control upon it, where the unequal capital stake is offset by mechanisms such as preferred subscription rights in case of capital increase or appointment of members of the board of directors of the joint undertaking.
According to the Commission’s Consolidated Jurisdictional Notice, joint control of an undertaking may result from parity in voting rights or representation in decision-making bodies, the existence of veto rights, in particular where they go beyond the normal protection of the minority shareholders’ interests, or the joint exercise of voting rights, in particular where the parent companies are required to cooperate on strategic decisions. The existence of joint control over the target company may also derive from decision-making procedures existing within that target.
