Proposed new EU merger guidelines for a shifting global order

On 30 April 2026, the European Commission published its revised draft merger guidelines (Draft Guidelines). The Draft Guidelines will replace both the existing 2004 horizontal merger guidelines and the 2008 non-horizontal merger guidelines.

The Draft Guidelines reflect (almost) 20 years of decisional practice since the European Commission last published guidelines on merger control, and coincide with a broader EU policy context of promoting competitiveness, resilience and growth. In addition, the Draft Guidelines acknowledge the new geopolitical context and consider internal political priorities. As a result, industrial scale and global competitiveness are now more important factors to be taken into account in merger assessments.

The Draft Guidelines state that merger control is a tool that "supports the EU's broader policy objectives, including the competitiveness and resilience of the internal market" and acknowledge that the "assessment of mergers should […] give adequate weight to scale, innovation, investment and resilience as pro-competitive factors that can benefit from a degree of consolidation".

What you need to know

• While the legal test for assessing mergers remains unchanged, the Draft Guidelines reflect the European Commission's previous decisional practice and expand upon a broader range of factors relevant to the competitive assessment.
• The Draft Guidelines have broadened and updated existing theories of harm, as well as adding new theories which (largely) reflect the European Commission's approach in recent decisions (e.g. the loss of investment, expansion and innovation competition).
• The Draft Guidelines recognise that scale-enhancing mergers may be pro-competitive (e.g. where they enable companies to grow either within the EU or to a sufficient scale to challenge global competitors).
• The existing analytical framework for assessing "efficiencies" remains the same but the Draft Guidelines put a greater emphasis on efficiencies. The merging parties can also put forward a “theory of benefit” to support the merger.
• A new concept of an "innovation shield" offers a safe harbour in certain circumstances where the transaction involves a "small innovative company" (e.g. a start-up).
• The Draft Guidelines clarify, for the first time, when national authorities can intervene in European Commission-controlled merger reviews.
• In practice, the Draft Guidelines may provide merging parties with an opportunity to more proactively claim efficiencies and deploy arguments that the transaction supports broader EU policy objectives. However, mergers will still be subject to strict scrutiny and dealmakers may need to address the new theories of harm set out in the Draft Guidelines.

Political backdrop to the Draft Guidelines

On 30 April 2026, the European Commission published the Draft Guidelines for consultation. This is the first time the European Commission has updated its merger guidelines in close to 20 years. Once finalised, the Draft Guidelines will supersede the existing guidelines covering horizontal and non-horizontal mergers (published in 2004 and 2008, respectively), consolidating them into a single document, in recognition of the fact that many mergers can have both horizontal and non-horizontal effects.

The Draft Guidelines reflect the European Commission's decisional practice over the last 20 years and follow calls (notably in the Draghi report (2024)) for European merger control to facilitate mergers which allow EU companies to scale-up to compete in global markets and to give more weight to factors such as innovation. Teresa Ribera (Executive Vice-President for Clean, Just and Competitive Transition) commented that the Draft Guidelines have been updated "for a more complex world, making them a sharper instrument to support Europe's competitiveness and long-lasting prosperity" and highlighted that the guidelines provide for a "more dynamic and forward-looking framework", calling out non-price parameters of competition ("innovation, investment, resilience").

Emphasising the importance of the single market, the Draft Guidelines also provide specific guidance, for the first time, on how Member States may exercise their prerogative under Article 21 of the EU Merger Regulation (EUMR) to block or impose conditions on mergers with an EU-dimension or mergers that have been referred to the European Commission, without interfering with the European Commission's jurisdiction or breaching EU law and principles.

Throughout the process of preparing the Draft Guidelines, there were calls to enable the creation of "European champions" (i.e. large European companies which can compete on a global scale), even where that may result in higher prices for EU consumers. However, Commissioner Ribera rejects the notion that EU merger control should be relaxed to enable the creation of European champions, commenting that the European Commission "need[s] to be more supportive of companies scaling up in global markets, while at the same time allowing European businesses and consumers to reap all the benefits of effective competition". To this end, the Draft Guidelines seek to "incorporate into the analysis the internal and external realities in which EU firms operate" (e.g. the fact that EU companies' R&D budgets may not compare to global rivals who receive state support or that supply-chain vulnerabilities could be leveraged by third countries).

The key novelties in the Draft Guidelines

While the Draft Guidelines largely formalise established EU merger doctrine and the European Commission’s previous decisional practice, they also set out a more dynamic, innovation-centred approach which explicitly recognises long-term benefits or efficiencies (through the concepts of the "innovation shield" and “theory of benefit”). In particular, the European Commission clarifies that efficiencies may extend beyond short-term cost savings to include longer-term and non-cost benefits, including sustainability, resilience, and innovation.

A safe harbour for innovation: the "innovation shield"

The Draft Guidelines introduce an "innovation shield" which provides a safe harbour for transactions involving a "small innovative company", meaning that the European Commission will "in principle" not find a significant impediment to effective competition (SIEC) in relation to these transactions. The innovation shield will apply where one party is a small innovative company (e.g. a start-up or an R&D project with dynamic competitive potential) provided that there are no horizontal or vertical overlaps or, where there is an overlap, certain market share thresholds are not exceeded and there is sufficient post-merger competition in relation to innovation.

The innovation shield gives acquirers of innovative targets a concrete checklist that they can apply at the deal-screening stage to gauge whether the European Commission is likely to have concerns about the transaction. Until now, parties have had to navigate uncertainty as to how the European Commission weighs innovation concerns on a case-by-case basis.

Building an efficiency case: theory of benefit

For the first time, the Draft Guidelines give the merging parties a structured pathway to present a "theory of benefit" alongside the European Commission's theory of harm, which suggests that there may be a greater willingness on the part of the European Commission to take efficiency considerations into account.

The Draft Guidelines draw a distinction between direct efficiencies (which typically derive from immediate cost savings, quality improvements, or the combination of complementary assets) and a new category of dynamic efficiencies (which confer the ability to increase incentives to invest or innovate). The Draft Guidelines provide a non-exhaustive list of synergies that may give rise to dynamic efficiencies, including:

• complementary R&D assets or know-how that lower the per-unit cost of innovation;
• scale or scope economies that make each new research project cheaper;
• securing access to critical inputs that enable or accelerate investment;
• providing access to finance for targets that cannot fund promising projects independently;
• enabling the merged entity to deploy scarce research talent and infrastructure more effectively across its portfolio.

The Draft Guidelines also treat resilience and sustainability as recognised categories of efficiency: for example, efficiencies may include strengthening security of supply, reducing exposure to supply chain shocks, cutting the environmental footprint of production, or developing more sustainable products. The European Commission adopts a broad view of consumer benefit: it recognises not only traditional "use value" but also "non-use value" (e.g. a consumer's concern for the environment) and "collective benefits" (wider societal gains such as lower carbon emissions), provided the harmed and benefiting consumer groups substantially overlap.

The three cumulative conditions that efficiencies must satisfy (verifiability, merger specificity and consumer benefit) are unchanged from the existing framework. What the Draft Guidelines add is a more structured framework for how the European Commission will assess efficiencies and weigh-up demonstrated benefits against competitive harm. This framework now accommodates situations not addressed in the 2004 guidelines; for instance, where the harm is a price increase but the benefit is improved innovation, or where benefits take longer to materialise than the harm, or where the benefits flow to a broader group of consumers than those directly affected by the merger.

The “theory of benefit” has the potential to change the dynamic of pre-notification discussions. The Draft Guidelines explicitly recognise dynamic efficiencies and give parties more to work with, and the European Commission's express invitation to engage on efficiencies during pre-notification creates a procedural opening that did not previously exist. Parties should therefore consider building their efficiency case early and ensure it features in deal rationale from the outset. That said, the evidential bar remains high. As before, parties must demonstrate that efficiency claims are verifiable, merger-specific and beneficial to consumers (i.e. the same approach as applied previously, which resulted in few mergers cleared on efficiency grounds).

Measures to protect legitimate interests

For the first time, the Draft Guidelines clarify when and how Member States can intervene in mergers that fall under the exclusive jurisdiction of the European Commission, providing detailed guidance on Article 21 EUMR and the protection of “legitimate interests". This is against a backdrop of an increasing number of national interventions (particularly via foreign direct investment screening) that have delayed or blocked European Commission-approved mergers, and it signals that the European Commission intends to act to prevent fragmentation of the internal market.

EU merger control follows a “one-stop-shop” principle: mergers with an EU dimension are assessed solely by the European Commission under a single set of rules, avoiding multiple national reviews and reducing administrative burden (see our EU Merger Control Quickguide). However, Article 21 of the EUMR allows Member States to intervene in EU mergers in exceptional circumstances, and subject to certain conditions, to protect public security, media plurality, or prudential (financial stability) rules without prior European Commission approval. The Draft Guidelines make it clear that these interests are interpreted narrowly and do not cover economic protectionism.

The Draft Guidelines emphasise that EU Member States should not normally view each other as public security threats, which sets a high evidentiary threshold for treating intra-EU acquisitions as security risks. On the other hand, measures protecting public security under the EU FDI Regulation (when aligned with the European Commission) are presumed to be compatible with Article 21 EUMR. This creates a safe harbour for coordinated EU-level screening, while unilateral national measures outside this framework do not benefit from the presumption.

Same test, wider lens: the SIEC standard meets a modern economy

The legal test under the EUMR remains the same: a concentration is compatible with the internal market provided it does not result in an SIEC.

However, the Draft Guidelines expand and modernise the analytical framework through which the competitive analysis will be conducted. In particular, they adopt a more dynamic and forward-looking approach, placing greater emphasis on competition in innovation, and longer-term market developments. In addition, the Draft Guidelines set out broader and updated theories of harm, as well as adding new theories which (largely) reflect the European Commission's approach in recent decisions (e.g. theories of harm focused on entrenchment and the loss of competition in investment and innovation).

The table below sets out the main areas of change across the Draft Guidelines (in addition to those discussed above).

Next steps

The Draft Guidelines are open for public consultation until 26 June 2026. Interested stakeholders can submit comments via the European Commission's consultation page. The final text is expected in Q4 2026.

Other Authors: Hayden Dunnett, Fiona Garside, Dimitra Karakioulaki, Sarah Schaible.