EU Mergers

Phase I Mergers

  • M.8882 KENNEDY WILSON / AXA / JV (7 June 2018)
  • M.8884 ALTOR FUNDS / TRIOPLAST INDUSTRIER (4 June 2018)
  • M.8887 PLATINUM EQUITY / LIFESCAN (5 June 2018)
  • M.8906 GOODYEAR / BRIDGESTONE / TIREHUB (5 June 2018)
  • M.8918 AEA INVESTORS / BCI / SPRINGS (4 June 2018)
  • M.8921 ONEX / VISTA / SEVERIN TOPCO (7 June 2018)
  • M.8924 HG CAPITAL / TA ASSOCIATES / ACCESS (6 June 2018)
  • M.8935 GOLDMAN SACHS / ANTIN INFRASTRUCTURE PARTNERS / CITYFIBRE INFRASTRUCTURE HOLDINGS (8 June 2018)

Qualcomm appeals against Commission decision in relation to abuse of dominance. On 4 June 2018, the Official Journal of the European Union (OJEU) published details of Qualcomm’s appeal brought on 6 April 2018 against a European Commission (Commission) decision. The Commission previously fined Qualcomm €997 million after finding that Qualcomm abused its dominant position in the market for 4G Long-Term Evolution baseband chipsets. Qualcomm is now appealing the Commission’s decision on the grounds that the Commission made manifest procedural errors, failed to state its reasons and distorted the evidence provided in Qualcomm’s defence. 

ECJ dismisses action for damages relation to pre-stressing steel cartel. On 7 June 2018, the European Court of Justice (ECJ) dismissed an action for damages brought by Ori Martin S.A. (Ori Martin) against a General Court decision. The General Court previously rejected Ori Martin’s appeal against an earlier Commission decision which fined Ori Martin for participating in a cartel for the supply of pre-stressing steel. The ECJ found that although the General Court distorted the substance of Ori Martin’s sole claim for damages at first instance, the General Court’s judgment was well founded for other legal reasons. The General Court’s judgment was therefore upheld by the ECJ and Ori Martin’s action was accordingly dismissed. 

Commission confirms unannounced inspections in styrene monomer sector. On 8 June 2018, the Commission issued a press release confirming that on 5 June 2018, its officials carried out unannounced inspections at the premises of companies operating within the styrene monomer purchasing sector. This inspection was carried out in several Member States. The Commission is concerned that the inspected companies may have violated EU competition rules. Styrene monomer is a chemical product used as a base material for several chemical products such as plastics, resins, and latexes. Unannounced inspections are a preliminary step in the Commission’s investigation into suspected anti-competitive practices but the fact that such inspections have been carried out on companies does not mean that the companies are guilty of anti-competitive behaviour. 

State Aid

Commission proposes amendment to Council Regulation 2015/1588 on the application of Article 107 and 108 TFEU. On 6 June 2018, the Commission published its proposed amendment to the EU’s state aid Enabling Regulation (Council Regulation (EU) 2015/1588) on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU). The proposal aims to improve the interplay of EU funding programme with state aid rules. It will enable the Commission to make targeted changes to the current state aid rules so that national money, including those from the European Structural and Investment Fund, can be managed at national level, and centrally managed EU funds can be combined seamlessly without distorting competition in the EU’s single market. The Commission is proposing to include two new categories in the Enabling Regulation: “Member State’s financing channelled through or supported by EU financial instruments” and “Aid for European Territorial Cooperation”. These new categories will enable the Commission to adopt block exemptions in order to ensure that the effect on competition and trade between Member States is limited. The proposal has no implications for the EU’s budget.

UK Competition

CMA publishes guidance on director disqualification orders in competition cases. On 4 June 2018, the Competition and Markets Authority (CMA) published an amended temporary guidance on director disqualification orders in competition cases. This guidance was originally published by the Office of Fair Trading (OFT) in 2010 and has not been amended since. This guidance provides current information on the CMA’s general approach to director disqualification but it is important to note that the CMA is still revising its final guidance and will consult on broader changes in due course. The CMA’s change in approach is reflected in the deletion of paragraph 4.10 of the OFT’s original guidance. This means that the CMA will not apply for a competition disqualification order if the infringement decision is subject to an appeal, or where the deadline for bringing an appeal has not yet passed.

CMA publishes draft guidance on changes to the jurisdictional thresholds for UK mergers. On 4 June 2018, the CMA published its draft guidance on the changes to the jurisdictional thresholds for UK mergers that have been effected by the amendment of the Enterprise Act 2002 (EA). Specifically, the Enterprise Act 2002 (Turnover Test) Amendment Order 2018 and the Enterprise Act (Share of Supply Test) Amendment Order 2018 comes into force on 11 June 2018. This document aims to provide guidance for merging parties and legal advisers on the circumstances in which merging parties will need to notify the CMA of their transactions. This guidance should be read in conjunction with the Department for Business, Energy and Industrial Strategy’s guidance, which offers further explanation on the type of enterprises which will be considered “relevant enterprises” and are therefore, affected by the amendment to the EA.  

CAT annuls CMA’s findings of abuse of dominance in Pfizer/Flynn’s supply of antiepilepsy drug. On 7 June 2018, the Competition Appeal Tribunal (CAT) published its judgment in relation to the appeal by Pfizer Inc., Pfizer Limited (together, Pfizer) and Flynn Pharma Limited and Flynn Pharma (Holdings) Limited (together, Flynn) against a Commission decision finding that the parties had abused their dominant position in relation to the supply of phenytoin sodium capsules, a drug used to treat epilepsy. The Commission previously found that Pfizer and Flynn were charging unfair and excessive prices for the anti-epilepsy drug and fined the companies a total of almost £90 million. The CAT held that while the CMA was correct in finding that both companies held a dominant position, there was no abuse of dominance. The CMA was incorrect in its application of the legal test for determining unfair pricing and failed to consider the situation of other comparable products in the market. The CAT has taken a provisional view to remit the decision in relation to the abuse of dominance back to the CMA for further consideration but will invite written submissions from Pfizer and Flynn before coming to a final decision on remittal.

UK Mergers

CMA publishes letter from the House of Commons seeking protection of jobs in relation to the Sainsbury’s/ASDA merger. On 29 May 2018, the CMA published a letter from Rt. Hon. Robert Halfon MP addressed to David Currie of the CMA. The letter states that assurances have been given to employees that their jobs will not be lost following the merger of Sainsbury’s and ASDA. However, the letter seeks a further guarantee from the CMA that jobs will be protected long into the future, including throughout the merger process. 

CMA publishes final report on 21st Century Fox/Sky merger. On 5 June 2018, the CMA published its final report in relation to 21st Century Fox’s proposed acquisition of Sky plc’s (Sky) remaining shares. The report confirms that the CMA has found that the proposed acquisition may be expected to operate against the public interest, taking into account the need for there to be sufficient plurality of persons with control of media enterprises serving UK audiences. The CMA concluded the report with possible remedies to address the adverse effects of this proposed acquisition and recommended the divestiture of Sky News to The Walt Disney Company or another suitable purchaser.  

Department for Digital, Culture, Media and Sport publishes letter confirming that it will not intervene in the merger of Comcast Corporation and Sky. On 5 June 2018, the Department for Digital, Culture, Media and Sport (DCMS) published a letter from the Secretary of State confirming that it will not issue a European Intervention Notice (EIN) in relation to the merger of Comcast Corporation and Sky plc. The Secretary of State invited comment from interested parties before arriving at his final decision and received no further representations. It is therefore confirmed that the Secretary of State will not issue an EIN under section 67 of the EA.