The Competition Authority has failed to approve the proposed concentration between Sunoko and Hellenic Sugar.

During the procedure, Sunoko submitted two proposals with a view to facilitating a conditional clearance by the authority of its intended acquisition of Hellenic Sugar. However, the authority rejected both proposals and prohibited the notified transaction on January 19 2012 after four months of market investigations.

Although the investigation proceedings continued, the authority returned the €50,000 Phase II filing fee, stating that because no clearance had been issued, no fee would be charged for issuing the decision prohibiting the transaction.

This decision is particularly important as the proposals demonstrated the depth of investigations conducted by the authority and provided an insight into the rationale on which the authority based its decision to prohibit the transaction.

The first proposal, dated January 4 2012, included:

  • structural measures (the obligation to sell a plant to a non-affiliated party within three years with the possibility of a one-year extension); and
  • behavioural measures (Sunoko would set the sugar prices in Serbia in accordance with one of two proposed methods).

The second proposal, dated January 17 2012, included:

  • structural measures (Sunoko would sell one of its plants – the sale would be executed by way of a sale trust within a one-year period, with the possibility of a one-year extension); and
  • behavioural measures (domestic and export prices would be aligned within two years and Sunoko would provide quarterly reports).

It appears that the authority clearly indicated that the notified transaction may not be cleared unless drastic steps were taken to improve the competitive situation. As no agreement was reached, the authority issued the decision prohibiting the transaction.

It remains to be seen how this case will further develop before the courts.

For further information on this topic please contact Srdjana Petronijević or Danijel Stevanović at Moravčević Vojnović i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email ([email protected] or [email protected]).