The European Commission's draft merger guidelines, published earlier this year, have caused speculation about a more permissive approach to consolidation. PE Hub spoke with Jennifer Storey of Clifford Chance and Michael Engel of White & Case to assess the impact on dealmaking ahead of the Commission's planned finalization in Q4 2026.

Michael Engel, White & Case, explained that while the draft guidelines do not change the underlying legal test for merger control, they modernize the Commission's framework and broaden the factors weighed during reviews. For private equity investors, this creates greater scope to demonstrate transaction benefits through scale, investment, innovation, and resilience, rather than relying solely on traditional competition arguments. Jennifer Storey of Clifford Chance noted the guidelines draw together different theories of harm from prior cases, providing a more flexible way for acquirors under scrutiny to argue their positive case.

However, Storey identified less positive developments regarding minority shareholdings and common institutional ownership, noting that even 5 percent ownership could be investigated. Despite this, she does not expect major changes, stating the vast majority of deals are already cleared without issue. The sectors most likely to feel impact are digital, pharma, and life sciences, where the draft guidelines introduce an "innovation shield," a safe harbor for acquisitions involving start-ups and R&D projects. Engel suggests this could provide a more meaningful pathway to clearance for relevant conditions, while Storey agrees the industries are impacted but does not see it hitting private equity particularly hard.

Even with concerns, both experts agree the changes represent evolution rather than a fundamental shift for PE dealmaking.