Vincent Power analyses the European Commission Sigma-Aldrich case when a fine was imposed for providing misleading information to the Commission.

The European Commission found three distinct infringements by Sigma-Aldrich in terms of providing, deliberately or at least negligently, incorrect or misleading information in the explanatory submission describing the remedy package and in the replies to two requests for information under Article 11(2) of the EU Merger Regulation.

While the fine had no impact on the European Commission's decision to authorise the transaction, it is a significant fine and a helpful reminder to all involved in M&A deals to take care to answer regulator's questions accurately and completely.

In a case which had plenty of twists and turns, Vincent analyses the lessons for those involved in mergers and acquisitions. His analysis was first published in the International Company and Commercial Law Review (of which he is an Editorial Board member).


In any notification of a merger or acquisition to a competition agency, the primary focus of the parties to the transaction is usually on securing approval of the deal. That is routine and normal. However, it is also clear that the parties should pay very close attention to the notification process itself and to their interaction with the competition agency so as to ensure that the parties disclose everything which is relevant, and that the approval is ultimately a sound one based on the information which has been supplied.

A €7.5m fine for providing misleading information

A stark reminder of the importance of this principle is the decision on 3 May 2021 by the European Commission to impose a fine of €7.5m on Sigma-Aldrich for, in the view of the European Commission, providing misleading information during an acquisition notification process.1

Background: Notification processes generally

Notifications need to be accurate and complete. Indeed, national and international competition regimes globally require detailed and complete information. For example, art.6(3)(a) of the European Union’s Merger Control Regulation2 (EUMR) even provides that the European Commission may ultimately revoke one of its decisions where “the decision is based on incorrect information for which one of the undertakings is responsible”. In any event, even if the decision remains intact, there can be heavy fines under art.14 of the EUMR where incorrect or misleading information is supplied. But it can sometimes be difficult to see what is relevant and not relevant during the process so usually parties should err on the side of caution. Deliberately withholding material information or providing misleading information is clearly wrong but there is need for caution to check that there is nothing missing or misleading even where there is no intention to withhold information or mislead the agency. Caution should be the watchword.

Background: The European Commission clearance in the Sigma-Aldrich case

On 21 April 2015, Merck notified the European Commission of its plan to acquire Sigma-Aldrich.3

On 15 June 2015, the European Commission approved the proposed acquisition subject to the divestiture of certain Sigma-Aldrich assets.

The divestiture was designed to address some competition concerns which the European Commission identified in markets for specific laboratory chemicals.

That procedure was referred to by the European Commission as Case M.7435.4 When the European Commission started investigating alleged procedural breaches during the notification procedure, then it opened a new—Case M.81815—because the previous procedure was already closed.

Apparent procedural breach

The European Commission says that during the divestiture process, it became aware that:

“an innovation project, called iCap was closely linked to the divested business and specifically developed for products included in the divestment business. However, the project had not been disclosed to the Commission [during the notification procedure].

Not only was the project not disclosed and discussed in remedy submissions, but information about it was also withheld in replies to specific requests for information. Moreover, the Commission found indications that Sigma-Aldrich’s supply of incorrect or misleading information was intended to avoid the transfer of the relevant project to the purchaser of the divestment business.

Hence, statements provided to the Commission were incorrect or misleading and prevented the Commission from undertaking an informed assessment of the intended scope of the commitments. The Commission can make such an assessment only if it has received from the parties all the information required, particularly when it relates to research and development (R&D) projects. These are typically confidential and the Commission can only learn about their existence through truthful and correct submissions made by the companies involved in merger procedures.”6

First Statement of Objections

On 6 July 2017, the European Commission announced its allegations that both Merck and Sigma-Aldrich had both breached the procedural rules under the EUMR.7 It therefore sent a Statement of Objections to both Merck and Sigma-Aldrich. At the time, the European Commission stated publicly:

“The Commission’s preliminary conclusion is that Merck and Sigma-Aldrich failed to provide the Commission with important information about an innovation project with relevance for certain laboratory chemicals at the core of the Commission’s analysis.

Had this project been correctly disclosed to the Commission, it would have had to be included in the remedy package. This is because the innovation at stake was closely linked to the divested business and had the potential to substantially increase its sales. By not including it, the viability and competitiveness of the divested business was impaired.

Merck has in the meantime agreed to license the relevant technology to Honeywell—the buyer of the divested business. As a result, Honeywell now has the technology it should have received with the divested business. However, this happened with a delay of almost one year and only because the Commission was subsequently made aware of the issue by a third party. If the Commission were to conclude that Merck and Sigma-Aldrich intentionally or negligently supplied incorrect or misleading information, it could impose a fine of up to 1% of the companies’ annual worldwide turnover.”8

Second/supplementary statement of objection: Case dropped against Merck but continued against


In June 2020, after hearing evidence from the two companies, they dropped the objections against Merck.9 This is a useful indicator of how the European Commission is willing to change its preliminary views and drop proceedings where it receives evidence that there was no wrongdoing. The stock line in the European Commission’s press releases that “the sending of a Supplementary Statement of Objections does not prejudge the outcome of the investigation” does mean something. However, the European Commission issued a supplementary statement of objections to Sigma-Aldrich on its own.10


On 3 May 2021, the European Commission imposed of a fine of €7.5m on Sigma-Aldrich for, in the view of the European Commission, providing misleading information during an acquisition notification process.11

Analysis of the case

The decision to impose a fine is interesting on several levels.

First, the European Commission believed that there were three distinct infringements by providing, deliberately or at least negligently, incorrect or misleading information in the explanatory submission describing the remedy package and in the replies to two requests for information made pursuant to art.11(2) of the EUMR. So regard will be paid to the full circumstances of the breach. A once-off accidental unintentional breach will be treated differently to a more deliberate breach.

Secondly, the finding of an infringement and the imposition of a fine had no impact on the approval of the concentration. The merger clearance approval remains intact. That will not always be the case but that subsequent revocation of a clearance could well happen and therefore this is a further reminder to notifying parties to be careful.

Thirdly, the fine could be up to 1% of turnover. The European Commission takes into account the nature, gravity and duration of the infringement, as well as any mitigating and aggravating circumstances. In this context, the European Commission stated:

“The Commission considers that the three infringements committed by Sigma-Aldrich are of serious nature and particularly grave notably because

(i) the obligation to provide correct and non-misleading information in merger investigations is crucial to ensure the effective functioning of the EU merger control system; (ii) the incorrect or misleading information related to an innovation project that was clearly related to and important for the divestment business; and (iii) the Commission’s only way to obtain the relevant information on this innovation project was from Sigma-Aldrich, such a project being by nature secret and sensitive.

On this basis, the Commission has concluded that an overall fine of €7.5m is both proportionate and deterrent.”12

Fourthly, this case is another example of the European Commission getting tougher on procedural breaches in the merger control space. Issues such as gun-jumping13 and provision of misleading information during merger control processes14 have become centre-stage. The European Commission’s Competition Commissioner Margrethe Vestager was clear in her view:

“the effectiveness of our merger control system relies on the accuracy of the information provided by the companies involved. Accurate information is essential for the Commission to take competition decisions in full knowledge of the facts. [The] decision to fine Sigma-Aldrich shows that companies should not withhold or provide misleading information. This is vital for the assessment of a deal, especially for research and development projects, which are by nature secret and for which only the parties have access to relevant information.”15

This is not going to be the last penalty for misleading information but the scale of it clearly indicates that the European Commission is vigorous in its approach to procedural breaches in the area of merger control. It is not too long ago when a fine of such scale would have been reserved for substantive breaches of EU competition law and not procedural issues. The tide has turned.