French Competition Authority Applies For The First Time The "failing Firm" Exception To Authorize A Merger Without Commitment Despite Competition Concerns

The French Competition Authority has authorized the takeover of Conforama by But (Mobilux) which are both companies active in the furniture sector. Its decision is not subject to any commitments despite the competitive risks, in applying the "failing firm" exception.

The "failing firm" exception allows a competitor to take over a company that would disappear in the short term if the transaction were not completed, even if the transaction harms competition.

This is the first time the French Competition Authority has used this exception.

• The three competitive risks identified

The Authority considered that the three following risks could result from this transaction, and the acquirer did not demonstrate that the negative effects could be offset by efficiency gains: