EU Mergers

Phase I Mergers

  • M.8248 TECH DATA / AVNET'S TECHNOLOGY SOLUTIONS (23 February 2017)
  • M.8318 SAMSUNG ELECTRONICS / HARMAN INTERNATIONAL INDUSTRIES (23 February 2017)
  • M.8353 CVC / CORIALIS (17 February 2017)
  • M.8369 KKR / HITACHI KOKI (21 February 2017)

EU Competition 

Grupo Armando Álvarez awarded over €150,000 in damages claim against General Court. On 17 February 2017, the General Court awarded Spanish industrial-bag maker Aspla-Plásticos Españoles damages of €44,951.24 and €111,042.48 to its parent Grupo Armando Álvarez in an action brought by the parties seeking damages for the harm suffered as a result of the excessive length of their proceedings before the General Court. The parties initially brought an action before the General Court to seek an annulment of a decision adopted by the European Commission (Commission) in a case concerning a cartel in the industrial plastic bags sector. In November 2011, the General Court dismissed the appeal. The parties then appealed to the European Court of Justice (ECJ) who also dismissed the appeal in May 2014. The parties brought the present case to the General Court: an action for damages suffered as a result of delay by the European Courts in adjudicating their appeal against the industrial bags cartel.The General Court ruled that the review process took 20 months longer than it should have and that this caused the applicants to incur extra costs for financing a bank guarantee between 16 March 2010 and 14 January 2011. This decision follows damages awarded to two other members of the industrial plastic bags cartel, Gascogne and Kendrion NV, in similar claims in which the right to adjudication within a reasonable period, as enshrined in the Charter of Fundamental Rights of the European Union, was also breached as a result of the excessive length of the cartel appeal proceedings.

Trade

Commission extends anti-dumping duties on Chinese aluminium-foil tariffs. On 16 February 2017, following an investigation into imports of aluminium foil in the EEA, the Commission extended definitive anti-dumping duties imposed on Chinese aluminium foil to also include imports of slightly modified aluminium foil from the People’s Republic of China.

WTO rules Russian pork ban is illegal. On 23 February 2017, the Appellate Body of the World Trade Organisation (WTO) upheld a previous ruling that found Russia illegally closed its market to European pork and this embargo violated global laws. The Russian government argued the European pork was banned in 2014 due to the finding of African swine fever in wild boar in Lithuania and Poland, and that the ban was in line with the WTO’s Sanitary and Phytosanitary Agreement and the non-discrimination provisions of the 1994 General Agreement on Tariffs and Trade. However, the WTO agreed with the Commission’s claims that an EEA ban was beyond the extent necessary to protect animal life and health and, therefore, such bans were inconsistent with the Sanitary and Phytosanitary Agreement. The WTO also found that the Commission’s evidence was sufficient to “objectively demonstrate to Russia that areas within Estonia, Latvia, Lithuania and Poland” and elsewhere within the EEA were free to African swine fever and “were likely to remain so”. Russia must now lift the ban on European pork or face possible retaliatory sanctions that would target the country’s exports to the EEA.

State Aid

Commission approves further prolongations of Portuguese guarantee schemes. On 17 February 2017, the Commission authorised the prolongation of the Portuguese Guarantee Scheme on European Investment Bank (EIB) lending and also approved an extension for the guarantee scheme for credit institutions in Portugal, until 30 June 2017, finding the extension of both of the State aid measures “well targeted, proportionate and limited in time and scope” and, therefore, in line with the Commission’s 2013 guidelines on State aid to banks. Each prolongation is also based on a review of the developments in financial markets and the particular scheme's effectiveness. The Portuguese guarantee scheme on EIB lending was originally approved in June 2013 and covers State guarantees to banks that guarantee EIB loans granted to companies in Portugal. The extension of the State aid will allow the continuation of funding provided by the EIB to the real economy and prevent the disruption of the credit granted by the EIB through the banks participating in the scheme. The Portuguese guarantee scheme for credit institutions was originally approved in October 2008 and has also been prolonged several times, as the Commission authorises guarantee schemes on banks’ liabilities for successive periods of six months to be able to monitor developments and adjust conditions accordingly. The Commission has, therefore, concluded that both of the guarantee schemes represent an appropriate means of “remedying a serious disturbance in the Portuguese economy” and so are compatible with Article 107(3)(b) of the Treaty on the Functioning of the European Union.

UK Competition

CMA publishes decision on National Fostering Agency / Acorn merger. On 20 February 2017, the Competition and Markets Authority (CMA) published its decision to consider in detail whether it will accepted the undertakings given by SSCP Spring Topco Limited (acting through its subsidiary SSCP Spring Bidco Limited), a holding company of the National Fostering Agency Group (NFA) on the completed acquisition of the Acorn Care and Education Group (Acorn). The CMA’s Phase 1 investigation found that the completed acquisition may give rise to a realistic prospect of a substantial lessening of competition and now the CMA must consider whether it will accept the divestments offered by NFA, or instead refer the acquisition to a Phase 2 investigation. The CMA’s initial investigation found that NFA, an UK independent fostering placement service provider, and Acorn, which also matches vulnerable children with foster carers in the UK, are two of the largest independent foster agencies in the UK. The CMA found the evidence provided by NFA and Acorn claiming that they were not close competitors was insufficient. The CMA’s investigation established that the parties overlap in the supply of fostering placement services to local authorities in the UK and, in particular, the CMA identified three local authority framework agreement areas that gave rise to competition concerns; Wales, Norfolk, and the framework agreement area covering Luton, central Bedfordshire, and Bedford. In these areas the CMA found the merged company’s position is strong, barriers to entry or expansion are high, and remaining fringe firms would not impose a sufficient constraint. The CMA, therefore, considered that local authorities may face challenges ensuring value for money in framework tenders, and found that countervailing buyer power was insufficient to offset this concern. On 13 February 2017, the CMA confirmed that divestment undertakings have been offered by the merged entity in relation to the three areas that have been identified by the CMA, and that there are “reasonable grounds for believing that the undertakings offered by the parties, or a modified version of them” addresses the CMA’s competition concerns and thus “might be accepted by the CMA”. The CMA has until 10 April 2017 to decide whether to accept the undertakings.