European regulators are expected to approve Google's proposed acquisition of online ad firm DoubleClick in February despite circulation of a threat assessment report, according to a research note released Thursday by Stifel Nicolaus.
Google was given the go-ahead by U.S. regulators late last year, but it's still waiting for approval from the European Union.
Staff members in the competition department of the European Commission have prepared a draft "Statement of Objection" that assesses how the takeover could pose threats to competition. "It is a necessary, but not sufficient, step in the EC merger review process," the analyst note says.
European Commissioner Neelie Kroes apparently has not decided whether to present the "Statement of Objection" to Google, or whether to clear the merger, according to the investment banking and research firm.
While Kroes has a reputation for being tough on mergers, the EC rarely blocks a merger, the note says. EU statistics show that of the 128 mergers in the past decade that received Phase II expanded scrutiny, only 12 were blocked, and 63 were approved with conditions.
"We continue to believe the EC will likely not block the merger," the analyst note concludes. "We see the risk, rather, as whether it imposes conditions that could make business tougher for Google."
An EC spokesman provided this statement on the analyst note: "We never comment on the state of play of our merger investigations. I can simply confirm that a decision to approve or veto the deal will be taken by the Commission no later than 2nd April."
A Google spokesman in Europe says the company hopes the EC will approve the deal.
"This is still an ongoing investigation but we do not believe the transaction raises any competition concerns," the Google statement says. "Google and DoubleClick are not competitors; current competition among firms in the marketplace is vigorous; and publishers and advertisers can easily move across providers of online services."