EU Mergers

Phase I Mergers

  • M.8061 IMS HEALTH / QUINTILES (12 August 2016)
  • M.8089 RANDSTAD / AUSY (18 August 2016)
  • M.8111 ARDIAN / CRÉDIT AGRICOLE ASSURANCES / INDIGO INFRA (16 August 2016)
  • M.8112 JAPAN TUNNEL SYSTEMS CORPORATION / MITSUBISHI HEAVY INDUSTRIES / JV (18 August 2016)
  • M.8139 ONEX / PAINE & PARTNERS / WIRECO (16 August 2016)

Trade

Russian import duties found to violate WTO rules. On 12 August 2016, the European Commission announced that a World Trade Organisation (WTO) panel had found Russia to be in violation of WTO rules due to import duties it has implemented on paper, refrigerators and palm oil, which are in excess of those it agreed on joining the WTO. In particular, Russia has been applying duties of 15% or 10% on certain paper products, instead of the 5% it agreed to apply when joining the WTO.

UK Competition

CMA updates timetable for sports equipment sector investigation. On 15 August 2016, the Competition and Markets Authority (CMA) updated the timetable for its current investigation into suspected anti-competitive practices in the sports equipment sector in breach of Chapter I of the Competition Act 1998 (CA) and Article 101 of the Treaty on the Functioning of the European Union (TFEU). The updated timetable follows the CMA’s recent announcement that it had issued a Statement of Objections to Ping Europe Limited (Ping) setting out its concerns in relation to a ban implemented by Ping to prevent its golf clubs being sold online by retailers. The CMA has yet to make any conclusions and expects to be in receipt of written and oral representations on the Statement of Objections by September/October 2016.

CMA publishes decision on Acadia Healthcare / Priory Group merger. On 15 August 2016, the CMA published the non-confidential version of its decision to consider undertakings offered by Acadia Healthcare Company, Inc. (Acadia) in respect of its acquisition of Priory Group No. 1 Limited (Priory), in lieu of a Phase II investigation. Acadia and Priory are both active in markets for the supply of inpatient and outpatient mental healthcare and social care services to local authorities and to NHS organisations for children, adolescents and adults suffering from mental health conditions in the UK. The CMA has found that 21 overlaps across five mental healthcare services provided by both companies to NHS organisations and local authorities in England and Wales could lead to a substantial lessening of competition. In order to address these concerns, Acadia has offered to sell either Priory or Acadia hospitals in the affected areas to an up-front buyer, to be approved by the CMA. The CMA now has until 23 September 2016 to consider the undertakings offered by Acadia.

CMA publishes decision on Sainsbury’s / Home Retail Group merger. On 16 August 2016, the CMA published the non-confidential version of its decision to approve the acquisition of Home Retail Group Plc (HRG) by J Sainsbury Plc (Sainsbury’s). Sainsbury’s and HRG (which owns Argos) were found to overlap in their retail supply of a number of non-food products in stores and online across the UK, but were found not to overlap in the retail supply of groceries, which accounts for the majority of Sainsbury’s sales. The parties, among other things, were both found to overlap in the supply of: toys; homewares; white goods; small domestic electrical appliances; DIY and gardening equipment; furniture; and personal loans. The CMA however, does not believe that these overlaps will result in a substantial lessening of competition in the supply of the overlapping products as there is a lack of significant competition between Sainsbury’s and HRG and there will remain significant competition from other competitors post-merger.

Initial Enforcement Order issued in respect of Diebold / Wincor Nixdorf merger. On 16 August 2016, the CMA published an Initial Enforcement Order (IEO) issued to Diebold, Inc. and Diebold International Limited (together, Diebold) in respect of Diebold’s acquisition of Wincor Nixdorf AG. The IEO prevents any pre-emptive action being taken to integrate the businesses pending the outcome of the CMA’s investigation.

CMA provisionally finds ICE / Trayport merger to give rise to competition concerns. On 16 August 2016, the CMA announced its provisional concerns in relation to the acquisition of Trayport by Intercontinental Exchange, Inc. (ICE). ICE operates exchanges and clearinghouses for European Utilities trading and has proprietary software which provides a trading platform for energy commodity and utility derivatives. Trayport also has software for the trading of energy commodity and utility derivatives. Given that traders, brokers, exchanges and clearinghouses that compete with ICE all depend on the Trayport platform for energy trading, the CMA is concerned that ICE could use its ownership of Trayport’s platform to close out competition in respect of the European utilities trades market. The CMA also believes the merger might result in a loss of competition between ICE and its rivals to launch new products, find innovative trading solutions and enter markets with new offerings. The CMA has also published a notice of possible remedies and is inviting comments by 30 August 2016.

CMA announces light fittings sector investigation. On 17 August 2016, the CMA announced that it has opened an investigation into suspected anticompetitive practices in the light fittings sector in breach of Chapter I CA and/or Article 101 TFEU. The CMA estimates it will be in a position to make a decision as to whether to proceed with its investigation by November 2016.

CMA publishes decision on McKesson / Bupa merger. On 17 August 2016, the CMA published the non-confidential version of its decision to approve the acquisition of Bupa Home Healthcare Limited and Bupa Home Healthcare Group Limited (together, Bupa) by McKesson Corporation (McKesson). McKesson and Bupa were found to overlap in the supply of low-tech clinical home care services. The merger was not however considered by the CMA to result in a substantial lessening of competition in the relevant market as: (a) the merged entity would have a modest share of supply (by patient volumes) of low-tech clinical homecare services; (b) McKesson and Bupa are not particularly close competitors (they had not bid against each other in this market); and (c) there would be sufficient constraint post-merger from other competitors.  In terms of whether there were any vertical effects on competition, the CMA found that AHH pharmaceuticals (a member of the McKesson group), which supplies some of the drugs required by some clinical homecare service providers to fulfil patient orders under clinical homecare contracts, would be unable to foreclose the market with respect to these contracts.

VTech / LeapFrog merger to be referred to Phase II investigation unless acceptable undertakings offered. On 18 August 2016, the CMA announced that it would be referring the acquisition of LeapFrog Enterprises Inc. (LeapFrog) by VTech Holdings Ltd (VTech) to a Phase II investigation unless acceptable undertakings in lieu of reference are offered. VTech and LeapFrog are two of the three largest suppliers of toddler electronic learning toys and child laptops/tablets in the UK. VTech now has until 25 August 2016 to offer undertakings to resolve the CMA’s concerns.