EU Mergers

Phase I Mergers

  • M.8382 VINCI / DUFRY / LFP (5 July 2017)
  • M.8437 STADLER RAIL / ÖBB-TS / STADLER LINZ JV (3 May 2017)
  • M.8439 WÄRTSILÄ / CSSC / JV (30 June 2017)
  • M.8449 PEUGEOT   / OPEL (5 July 2017)
  • M.8470 DAAM / INFRAVIA / FIH / AI (6 July 2017)
  • M.8482 ABB / B&R (3 July 2017)
  • M.8484 GASUNIE / VOPAK / OILTANKING / JV (6 July 2017)
  • M.8485 HITACHI GROUP / HONDA / JV (30 June 2017)
  • M.8491 PGA GROUP / GROUPE BERNARD / CDPR (5 July 2017)
  • M.8505 NN GROUP / ATP / HOTEL (30 June 2017)
  • M.8508 ENGIE / CDC / SOLAIRECORSICA 1-2-3 (4 July 2017)
  • M.8515 CPPIB / BPEA / NORD ANGLIA EDUCATION (30 June 2017)
  • M.8519 SANTANDER / SAM (3 July 2017)

EU Competition

Court of Justice dismisses Toshiba’s appeal in switchgear cartel. On 6 July 2017, the European Court of Justice (ECJ) dismissed the appeal by Toshiba Corp. (Toshiba) in relation to the European Commission’s (Commission) decision which re-imposed fines on Toshiba for their participation in a single and continuous infringement relating to the gas insulated switchgear sector between April 1988 and May 2004. The original fine, imposed on Toshiba in 2007, was recalculated after the General Court found the Commission had infringed the principle of equal treatment in calculating the fine. The Commission fixed Toshiba’s new fine at €61.44 million, €4.65 million of which was to be paid jointly and severally with Mitsubishi Electric Corp. who jointly owned TM T&D Corp., through which Toshiba carried out its gas insulated switchgear business. Toshiba brought an action against the new decision, but the General Court upheld the fine. In their appeal to the ECJ, Toshiba raised three grounds of appeal alleging first, a breach of its right of defence in that a new statement of objections was not issued before the adoption of the decision; second, an infringement of the principle of equal treatment in relation to the starting amount of the fine; and third, an infringement of the principle of equal treatment in relation to Toshiba’s level of culpability. Each of these grounds were rejected by the ECJ and the appeal was dismissed. The fine imposed on Toshiba is therefore final. 

State Aid

Commission approves prolongation of Greek guarantee scheme. On 3 July 2017, the Commission approved the prolongation of the Greek bank guarantee scheme under EU state aid rules. The guarantee scheme was initially approved in November 2008 and is available for banks with no capital shortfall. The Commission found the liquidity situation of Greek banks is gradually improving, but challenges still remain. Moreover, the Commission found that the prolonged measure was targeted, proportionate, and limited in scope. The Commission therefore concluded that the prolongation of the scheme was in line with EU state aid rules and authorised it to be extended until 30 November 2017. The Commission are authorising bank guarantee schemes such as this for periods of five to six months in order to monitor developments and adjust conditions accordingly.

Commission approves precautionary recapitalisation of Italian bank. On 4 July 2017, the Commission approved the amount of €5.4 billion to support a precautionary recapitalisation of Monte dei Paschi di Siena (MPS) under EU state aid rules. This follows the agreement in principle reached between Commissioner Vestager and Pier Carlo Padoan, Italy's Minister of Economy and Finance, on 1 June 2017 in relation to the restructuring plan of MPS. There were two conditions to this agreement, first that the European Central Bank confirms MPS is solvent and meets capital requirements; and second, that Italy obtains a formal commitment from private investors to purchase the bank’s non-performing loan portfolio. Both these commitments have been fulfilled. Under Italy’s plans, junior bondholders and shareholders have contributed €4.3 billion, MPS has raised private capital amounting to €0.5 billion, and the State will inject the remaining capital of €5.4 billion in return for shares in MPS. This plan ensures that there are sufficient private means to cover current and likely losses of MPS should capital conditions worsen. Since the precautionary recapitalisation involves the use of taxpayer money, public funds can only be injected if the bank is profitable in the long-term, therefore, MPS will undergo an in-depth restructuring to ensure future viability. MPS’s restructuring plan provides for a five-year restructuring period, and includes directing its business model towards retail customers and small and medium-sized enterprises, strengthening its efficiency, improving its credit risk management, and disposing of a €26.1 billion non-performing loan portfolio to a privately-funded special vehicle.

Commission approves prolongation of Polish bank guarantee scheme. On 5 July 2017, the Commission approved the prolongation of the Polish bank guarantee scheme under EU state aid rules. The scheme in question provides for State guarantees in favour of certain solvent credit institutions in Poland. The scheme was first approved in September 2009 and has been prolonged several times, on this occasion until 30 November 2017. The Commission concluded that the prolongation of the scheme was targeted, proportionate, and limited in time and scope.

Commission approves prolongation of Irish credit union scheme. On 5 July 2017, the Commission approved the prolongation of an Irish credit resolution scheme under EU state aid rules. The aim of the scheme is to safeguard financial stability when credit unions become unable to meet regulatory requirements, by allowing Ireland to provide aid for transferring the assets and liabilities of the failing credit union to an acquirer. The aid is limited to the minimum necessary for an orderly winding-up and ensures no buyer gains an undue economic advantage through the acquisition of underpriced assets and liabilities. The Commission initially approved the aid in December 2011. The scheme has been prolonged several times and has now been prolonged until 30 November 2017.

UK Competition

CMA publishes its final decision on remittal of ICE and Trayport merger. On 7 July 2017, the Competition and Markets Authority (CMA) issued its final decision on the issues remitted back to it by the Competition Appeal Tribunal (CAT) in relation to the completed acquisition by Intercontinental Exchange, Inc. (ICE) of Trayport, Inc. and GFI TP Ltd (Trayport). In October 2016, the CMA found that the merger would result in a substantial lessening of competition in the supply of trade execution services to energy traders and trade clearing services to energy traders in the European Economic Area (EEA). The CMA concluded that the only effective remedy would be the complete divestment of Trayport by ICE, which would include unwinding an agreement entered into by the parties in May 2016 (the New Agreement). The CMA therefore issued a direction which prevented ICE and Trayport from implementing the New Agreement on the basis that it would conflict with its final report and affect the CMA’s ability to implement its findings. The parties challenged the direction, and in its judgment the CAT remitted the question of whether it was reasonable and practical to require the parties to terminate the New Agreement back to the CMA for reconsideration. The CMA has now found that the loss of competition identified in the original merger investigation would not be comprehensively remedied if the New Agreement remained in place. The CMA therefore concluded that termination of the New Agreement was necessary.