EU Mergers

Phase I Mergers

  • M.8287 NORDIC CAPITAL / INTRUM JUSTITIA (12 June 2017)
  • M.8360 IMERYS / KERNEOS (19 June 2017)
  • M.8433 ZALANDO / BESTSELLER UNITED / JV (16 June 2017)
  • M.8461 CHRYSAOR (HARBOUR ENERGY GROUP) / TARGET ASSETS (15 June 2017)
  • M.8474 HNA / CWT (15 June 2017)
  • M.8473 INEOS / DONG E&P (21 June 2017)
  • M.8476 OAKTREE / VITANAS (14 June 2017)
  • M.8479 ADVENT INTERNATIONAL / BAIN CAPITAL INVESTORS / RATEPAY (19 June 2017)
  • M.8489 CINVEN / EUROVITA (15 June 2017)
  • M.8490 BLACKSTONE / CPPIB / ASCEND LEARNING (20 June 2017)
  • M.8494 ARDIAN FRANCE / LASALLE INVESTMENT MANAGEMENT / EUROPA (9 June 2017)
  • M.8497 SIBUR / TECHNIPFMC / LINDE / JV (19 June 2017)
  • M.8502 SOFTBANK / BHARTI / HON HAI / SB ENERGY (15 June 2017)
  • M.8506 MACQUARIE GROUP / CARGILL PETROLEUM BUSINESS ASSETS (15 June 2017) 

EU Competition

Commission opens formal investigations into Nike, Sanrio, and Universal Studios. On 14 June 2017, the European Commission (Commission) opened three separate antitrust investigations into Nike, Sanrio, and Universal Studios due to concerns that certain licensing and distribution practices illegally restrict traders from selling licensed merchandise cross-border and online within the EU Single Market. The investigations concern the licensing and distribution of merchandising products including clothes, shoes, phone accessories, bags, and toys on which an image or text has been applied. The licensee may only use such images and text if it has executed a licensing agreement with the licensor. The three companies in question license the rights for some of the world’s most well-known brands, for example, Nike is the licensor of rights of certain Barcelona Football Club merchandise, Sanrio is the licensor of rights for Hello Kitty and Universal Studios is the licensor of rights for Minions from the film Despicable Me. In its investigation, the Commission will consider whether Nike, Sanrio, and Universal Studios may have breached EU competition rules (in particular Article 101 of the Treaty on the Functioning of the European Union (TFEU)) in their role as licensors by restricting the licensees ability to sell the merchandise cross-border and online.

Commission fines lighting system producers for participation in a cartel. On 21 June 2017, the Commission fined Automotive Lighting and Hella a total of €26.744 million for their participation in a cartel relating to lighting systems. A third light system producer, Valeo, also participated in the cartel but received full immunity under the 2006 Leniency Notice for revealing the existence of the cartel. The cartel concerned the supply of spare parts such as headlamps and daytime running lights to manufacturers of passenger and commercial vehicles. The Commission found that the three companies coordinated the prices and other trading conditions for the supply of the vehicle lighting systems across the European Economic Area (EEA) for over three years. The companies admitted to being involved in the cartel and agreed to settle the case. The fines imposed on Automotive Lighting and Hella therefore include a reduction to reflect their cooperation with the investigation.

Commission conditionally approves acquisition by Evonik of Huber Silica. On 22 June 2017, the Commission announced its decision to approve the proposed acquisition of Huber Silica by Evonik, subject to conditions. The parties overlap in the manufacture of specialty chemicals, including precipitated silica which is a chemical used in tyres, toothpaste, defoamers, paints, and coatings. The Commission found that the transaction raised competition concerns in the markets for precipitated silica for toothpaste and defoamer applications and for hydrophobic precipitated silica due to the parties relatively high combined market share in these areas. The parties have therefore agreed to divest some of their activities in relation to precipitated silica, namely Evonik’s precipitated silica business for dental applications in Europe, the Middle East and Africa, Huber Silica's precipitated silica business for defoamer applications in the EEA, and Huber Silica's hydrophobic precipitated silica business in the EEA. The Commission concluded that these commitments addressed its competition concerns.

State Aid

Commission approves French and German aid for Airbus X6 helicopter. On 19 June 2017, the Commission approved €377 million of French and German support to develop the innovative Airbus X6 heavy helicopter under EU state aid rules. The twin-engine X6 helicopter will have a higher range of action and improved fuel efficiency compared to the current generation of helicopters. The aim of the project is to simplify access to platforms in the high seas and facilitate search and rescue and humanitarian missions. The Commission concluded that the support for this project will significantly contribute to research and innovation in the EU without unduly distorting competition and therefore approved it under EU state aid rules.      

Commission approves Danish support for conversion of a thermal power unit. On 21 June 2017, the Commission approved Danish investment aid of DKK 422 million (approximately €57 million) to DONG Energy Thermal Power A/S under EU state aid rules. The aid is for the conversion of an existing thermal power unit from coal to a high efficiency unit using biomass in Kalundborg. The new unit will supply renewable electricity to the grid, renewable district heating to Kalundborg Forsyning and renewable process steam to the industry. Furthermore, it will contribute to the long-term goal of a fossil-fuel-free Denmark by 2050. The Commission concluded that the aid with help the EU progress towards its environmental and energy targets and, because the aid concerns the replacement of an existing unit, it would not lead to undue distortion of competition in the electricity market.      

Commission approves support for Croatian railway company HZ Cargo. On 21 June 2017, the Commission approved Croatian aid of HRK 975 million (approximately €129.5 million) to the state-owned rail freight operator HZ Cargo under EU state aid rules. HZ Cargo were under financial difficulties so Croatia decided to cancel HZ Cargo’s debt held by the State by way of converting it to equity. The Commission found that this constituted state aid as it relieved HZ Cargo of its repayment obligation. However, the Commission concluded that the aid was compatible with EU state aid rules as the cancelled debt was incurred before Croatia’s accession to the EU in July 2013. The aid was also necessary to rectify HZ Cargo’s financial difficulties and did not prevent any competition in the market.      

Commission approves prolongation of Croatia’s bank resolution scheme. On 23 June 2017, the Commission approved the prolongation of a bank resolution scheme in Croatia. The scheme was first authorised in 2016 and can be used by small banks with total assets below €1.5 billion if the competent national authority found them to be in distress. The Commission concluded that the prolongation of the scheme was in line with state aid rules.  

UK Competition

CMA accepts undertakings given by David Lloyd. On 13 June 2017, the Competition and Markets Authority (CMA) accepted undertaking in lieu of referring the anticipated acquisition by David Lloyd Clubs Limited (David Lloyd) of 16 gyms from Virgin Active Limited (Virgin Active) to a Phase 2 investigation. In its initial investigation, the CMA considered that the merger may give rise to a realistic prospect of a substantial lessening of competition in the supply of gyms in the areas surrounding Virgin Active Brighton and Virgin Active Clearview in Brentwood. The CMA therefore decided to refer the merger to an in-depth Phase 2 investigation unless undertakings were offered in lieu. In order to address the CMA’s competition concerns, David Lloyd has agreed not to acquire Virgin Active Brighton and Virgin Active Clearview. The CMA found that these undertakings were appropriate to remedy, mitigate or prevent any substantial lessening of competition and therefore accepted them in lieu of referring the merger to a Phase 2 investigation.      

CMA publishes full text of its decision on Fayat’s acquisition of Dynapac Compaction Equipment. On 13 June 2017, the CMA published the full text of its decision in relation to the anticipated acquisition by Fayat SAS (Fayat) of Dynapac Compaction Equipment AB (Dynapac). The CMA found that the parties overlap in the supply of road construction equipment, in particular in the supply of asphalt and soil compaction rollers and pavers. The CMA therefore assessed the impact of the merger in relation to the supply of light asphalt compaction rollers in the UK, the supply of heavy asphalt compaction rollers in the UK, the supply of soil compaction rollers in the UK, and the supply of pavers in the UK. In doing so, the CMA found that the parties combined share of supply was limited and that the increment brought about by the merger was small. Moreover, the CMA found that Fayat and Dynapac are not each other’s closest competitors and that other competitors would sufficiently constrain the parties post-merger. The CMA concluded that the merger would not give rise to a realistic prospect of a substantial lessening of competition and therefore decided not refer the anticipated acquisition for a more detailed analysis under section 33(1) of the Enterprise Act 2002.      

CMA publishes full non-confidential decision in relation to phenytoin case. On 15 June 2017, the CMA published the full non-confidential version of its decision following an investigation into the pricing of phenytoin sodium capsules in the UK. In its decision, the CMA found pharmaceutical companies, Pfizer Limited and Pfizer Inc. (Pfizer) and Flynn Pharma Limited and Flynn Pharma (Holdings) Limited (Flynn) had breached Chapter 2 of the Competition Act 1998 by charging excessive and unfair prices for the anti-epileptic drug. The CMA found that both Pfizer and Flynn held dominant positions in their respective markets and that each abused their dominant position by charging unfair prices. This resulted in the National Health Service (NHS) being overcharged by tens of millions of pounds. The CMA therefore fined Pfizer £84.2 million and Flynn £5.2 million. Both companies were also directed to reduce their prices.     

CMA publishes full infringement decision in relation to light fittings investigation. On 20 June 2017, the CMA published the full non-confidential version of its decision finding The National Lighting Company Limited and its subsidiaries Saxby Lighting Limited (Saxby), Endon Lighting Limited (Endon) and Poole Lighting Limited (Poole) to have breached Chapter 1 of the Competition Act 1998 and/or Article 101 of the TFEU. The CMA found that the companies had participated in agreements with resellers and imposed a minimum price on online sellers, who then had to retail goods at, or above, this price. The CMA fined the companies a total of £2.7 million and this included an extra penalty due to their failure to respond to an earlier warning letter from the CMA. However, the companies also benefitted from a reduction in the fine as they applied for and were granted leniency and entered into settlement with the CMA.