Right now, the European Union is proposing significant changes to its merger regulations as it seeks to strengthen its competitive position in the global economy.
The draft guidelines, currently under public consultation, call for adequate weight to be given to “scale, innovation, investment and resilience as pro-competitive factors that can benefit from a degree of consolidation.”
It is an addition that could open new opportunities for European businesses, with the commission noting that changed geopolitical and trade context have made industrial scale and global competitiveness increasingly important.
The So What
BCG analysis suggests the significance of the proposed changes could be substantial.
- Over the past decade, M&A transactions with an aggregate value of at least €70 billion have been eventually prohibited by the Commission, and many more were withdrawn during merger proceedings, or didn’t even try.
- If those deals were brought forward, it would represent a meaningful uplift in deal activity—potentially adding more than €10 billion in annual deal value that was previously held back by regulatory uncertainty.
EU merger control rules apply to all mergers no matter where in the world the merging companies have their headquarters or activities.
Jens Kengelbach, BCG's global leader for mergers and acquisitions (M&A) sees the proposed reform as an important moment for European industrial strategy.
"What the previous framework struggled to accommodate was the idea that scale itself can be pro-competitive; that larger European players, with a stronger cost base and greater capacity to invest, are better placed to compete globally and to sustain the kind of innovation that benefits everyone. That argument can now be made more effectively," he says.
The need for reform is visible in some of Europe's most strategically important industries.
In telecommunications, energy, steel, defense, and industrial supply chains, for example, fragmentation has persisted in Europe while global competitors have consolidated and grown stronger.
In September 2024, former European Central Bank president Mario Draghi delivered a landmark report to the Commission that set out the scale of Europe's competitiveness challenge. Draghi warned that Europe could no longer rely on the conditions that had driven its past prosperity and called for structural reform across the board.
Draghi’s assessment resonated. For example, BCG's European Competitiveness Barometer, published in January 2026, captured the broader mood of nearly 850 business leaders and 6,400 citizens. Around 95% of business leaders surveyed believe Europe must protect its commercial interests more assertively in global trade and almost two-thirds of both groups want more European integration, not less.
"For many years, it was technically possible to make an efficiency argument for a merger, but the hurdles were so high that few companies attempted it seriously,” explains Dominik Degen, global team leader for Transactions & Integrations at BCG Vantage.
“The new guidelines create a clearer, more structured pathway for making that case: articulating the scale benefits, supply-chain resilience, sustainability gains, and innovation arguments. Companies that understand this shift—and prepare a credible “theory of benefit” from the earliest deal-planning stages—will be in a meaningfully stronger position."
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Now What
With the European Commission aiming to finalize the new regulations by year-end, companies should begin factoring the proposed changes into their M&A planning.
Act now, don't wait for certainty. The Commission says it plans to finalize its review process in Q4 2026. But the direction appears set, and as the preparation time for larger transactions is typically 9-12 months, companies could start preparatory work now while the details are finalized. The correct posture is active readiness: building deal capability, developing the strategic rationale for potential transactions, and tracking the regulatory process to ensure decisive moves when the moment comes.
Revisit transactions that were previously ruled out. The most immediate strategic question the proposed new guidelines raise is whether consolidation moves previously considered too risky, now become viable. Companies can review their M&A opportunities with fresh eyes, assessing which combinations the proposed framework might accommodate that the old one would not.
Build the efficiency benefits case ahead of time. The shift in regulatory logic means that scale benefits, supply-chain resilience, and innovation arguments are no longer secondary considerations—they are central to how deals will be assessed alongside the need to protect consumers. Companies planning significant transactions should consider constructing these arguments now, well before a specific deal is on the table. Those that arrive at the regulator with a well-prepared, evidence-based efficiency case will likely have a material advantage.
Prepare for new scrutiny, not just new opportunities. Map planned transactions against both the new 'theory of benefit' categories and the new 'theories of harm'. A deal that benefits from the resilience argument may simultaneously be exposed to ecosystem or diagonal merger concerns.
