EU Mergers

Phase I Mergers

  • M.8388 ARES / BAUPOST / NOVA EVENTIS (12 May 2017)
  • M.8410 ZEN-NOH / LDC / AMAGGI / JV (16 May 2017)
  • M.8411 SAFRAN GROUP / CHINA EASTERN AIR HOLDING / JV (18 May 2017)
  • M.8415 ENNOCONN / S&T (12 May 2017)
  • M.8421 WESTROCK / MPS (18 May 2017)
  • M.8431 OMERS / AIMCO / VUE / DALIAN WANDA GROUP / UCI ITALIA / JV (18 May 2017)
  • M.8443 TPG / OAKTREE / IONA ENERGY (17 May 2017)
  • M.8447 EDF / CDC / MITSUBISHI CORPORATION / NGM (17 May 2017)

EU Competition 

General Court dismisses Agria Polska’s appeal in relation to parallel imports of plant protection products. On 16 May 2017, the General Court dismissed the appeal of Agria Polska, Agria Chemicals Poland, Star Agro Analyse und Handels GmbH and Agria Beteiligungsgesellschaft mbH in relation to their complaint concerning parallel imports of plant protection products. In 2010, the applicants brought an action alleging that various manufacturers and distributors of plant protection products had engaged in practices which infringed competition law. Such practices took the form of agreements and concerted practices, including filing false and misleading statements with Polish and Austrian authorities in order to eliminate the applicants from the market. The applicants originally brought this complaint to the Polish national authorities, however, they declined to hear the complaint due to the one year limitation period in Polish law. The applicants therefore made the complaint to the European Commission (Commission). The Commission informed the applicants that it intended to dismiss the complaint first, due to the limited likelihood of establishing an infringement of Article 101 or Article 102 of the Treaty on the Functioning of the European Union (TFEU), second, due to the fact that the resources needed for an investigation would be disproportionate, and third, because the national authorities were better placed to deal with the issues raised. In their appeal to the General Court, the applicants sought an annulment of the Commission’s decision. However, the General Court found that the Commission had not committed a manifest error in finding that the likelihood of there being an infringement to be low, and so dismissed the action in its entirety.

Commission fines Facebook €110 million for providing misleading information. On 18 May 2017, the Commission announced that it has fined Facebook €110 million for providing misleading information in relation to its acquisition of WhatsApp. In both its merger notification and in its response to an information request, Facebook claimed it was unable to establish reliable automated matching between the user accounts of the two companies. However, the Commission found that the technical possibility of matching Facebook users’ IDs with WhatsApp users’ IDs had existed in 2014 and that staff were aware of this possibility. The Commission concluded that Facebook had submitted incorrect or misleading information to the Commission and that this infringement was serious because it prevented the Commission from having all the information relevant to its assessment of the transaction. The Commission did, however, take into account Facebook’s cooperation with the investigation in setting the level of the fine.

State Aid

Commission widens scope of General Block Exemption Regulation. On 17 May 2017, the Commission approved new state aid rules which will widen the scope of the General Block Exemption Regulation. The General Block Exemption Regulation enables Member States to implement a range of state aid measures without needing prior approval from the Commission. The Commission has now extended this to exempt, for the first time, support measures for ports and airports. The objective of this is to facilitate public investment for growth and job creation whilst still preserving competition. The amended Regulation also includes new simplifications in other areas such as culture projects and multi-purpose sports arenas.

Commission conditionally approves state aid for French gas-fired power plant. On 15 May 2017, the Commission announced that it has conditionally approved the aid granted to the French company, Compagnie Electrique de Bretagne (CEB) for the construction of a gas-fired power plant in Brittany. The Commission found that France had demonstrated how the measure was both necessary and appropriate in order to address their energy needs and that the amount of aid was proportionate. However, the Commission had concerns that the measure may harm competition due to the significant market share held by CEB. Therefore, the Commission decided to make the approval conditional on CEB not selling output from the power plant through long-term contracts to any undertaking with over a 40% share of the French electricity-generation capacity market.

Commission concludes Portugal’s extension of hydro-power concessions does not involve state aid. On 15 May 2017, the Commission concluded that the extension of hydro-power concessions granted to Electricidade de Portugal SA (EDP) does not involve state aid. The measure in question has the effect of maintaining 27 hydro-power plants under the control of EDP, which together account for 27% of Portugal’s generation capacity. The measure were not originally notified to the Commission for state aid approval. However, following a number of complaints, the Commission opened a formal investigation into the measure. The main concerns raised focused on the price paid by EDP for the extension of the concessions and the market impact of this. During the investigation, the Commission verified that the compensation paid by EDP was in line with market conditions and concluded that the extension of the hydro-power concessions did not involve state aid.

Commission approves fifth prolongation of Irish credit union restructuring scheme. On 17 May 2017, the Commission found that the prolongation of the Irish scheme aimed at restructuring credit unions until 31 October 2017 was in line with EU state aid rules. The scheme was first approved in 2014 and has been prolonged four times already. The objective of the scheme is to support the stability and long-term viability of credit unions and the credit union sector in Ireland. The Commission concluded that the measure ensures that the beneficiaries become viable in the long-term through restructuring and that they contribute to the cost of restructuring. Furthermore, the Commission found that the impact on competition was limited due to the fact that the credit unions are small and only do business with members.

UK Competition 

CMA publishes full text of its decision on GWI’s acquisition of Pentalver Transport. On 15 May 2017, the Competition and Markets Authority (CMA) published the full text of its decision in relation to the anticipated acquisition by GWI UK Acquisition Company Limited (GWI) of Pentalver Transport Limited (Pentalver). The parties overlap in the transport of deep sea containers within Great Britain with GWI primarily transporting containers by rail and Pentalver by road. The CMA assessed the merger based on the routes on which the parties compete and in relation to the parties’ ability to use their position to foreclose competitors in the supply of container transport. However, the CMA found that the parties combined share of supply of container transport is not a cause for concern by itself. Moreover, the increment in the parties’ share of supply was small and alternative suppliers exist if the parties were to increase prices or reduce their quality of service. The CMA also found that the parties would not be able to foreclose their competitors in the supply of container transport. Therefore, the CMA concluded that the anticipated merger did not give rise to a realistic prospect of a substantial lessening of competition and will not be referred for a more detailed assessment under section 33(1) of the Enterprise Act 2002.

CMA refers merger between Cardtronics and DirectCash Payments to a Phase 2 investigation. On 15 May 2017, the CMA announced its decision to refer the completed acquisition by Cardtronics plc of DirectCash Payments Inc. to an in-depth Phase 2 investigation. Both parties are independent deployers supplying cashpoints to site owners and, following its initial investigation, the CMA found that there was insufficient competition from rival ATMs in certain local areas. The CMA gave the parties until 10 May 2017 to offer undertakings in lieu of referring the merger to a Phase 2 investigation, however, the parties failed to offer any such undertakings. Therefore, the completed merger has now been referred for an in-depth investigation.

Commission publishes full text of its decision on Hain Frozen Foods’ acquisition of The Yorkshire Provender. On 16 May 2017, the CMA published the full text of its decision in relation to Hain Frozen Foods UK Limited’s (Hain) anticipated acquisition of The Yorkshire Provender Limited (Yorkshire Provender). The parties overlap in the supply of chilled soup to retail customers and in the supply of chilled soup to food service customers in the UK. The CMA found that the parties’ share of supply is modest with only a small increment in each of the two product markets in which they overlap. Moreover, the parties were not particularly close competitors and no third parties raised any competition concerns. The CMA therefore concluded that the merger did not give rise to a realistic prospect of a substantial lessening of competition and did not refer the merger under section 33(1) of the Enterprise Act 2002.

CMA refers Just Eat and Hungryhouse merger to a Phase 2 investigation. On 19 May 2017, the CMA announced its decision to refer the anticipated acquisition by Just Eat plc of Hungryhouse Holdings Limited to an in-depth Phase 2 investigation. Both parties supply online takeaway services and the CMA found them to be close competitors due to the similarity of their services and the broad geographical coverage of both. Therefore, on 10 May 2017, the CMA announced that it would refer the merger to a Phase 2 investigation unless undertakings were offered in lieu. The parties failed to offer any such undertakings and the CMA has now referred the merger to a Phase 2 investigation.