EU Mergers

Phase I Mergers

  • M.8472 NIPPON YUSEN KABUSHIKI KAISHA / MITSUI OSK LINES / KAWASAKI KISEN KAISHA / JV (28 June 2017)
  • M.8467 BNP PARIBAS / COMMERZ FINANZ (29 June 2017)
  • M.8483 BAIN CAPITAL INVESTORS / CINVEN CAPITAL MANAGEMENT / STADA ARZNEIMITTEL (29 June 2017)
  • M.8499 GOLDMAN SACHS / CALDIC (23 June 2017)
  • M.8510 ROBERT TÖNNIES / CLEMENS TÖNNIES / ZUR MÜHLEN GROUP AND ASSET GROUP (27 June 2017)
  • M.8525 APAX PARTNERS / SAFETYKLEEN (28 June 2017)

EU Competition 

Commission approves Italian aid for market exit of BPVI and Veneto Banca. On 25 June 2017, the Commission approved, under EU state aid rules, Italian measures which facilitate the liquidation of of Banca Popolare di Vicenza (BPVI) and Veneto Banca under Italian insolvency law. This follows the European Central Bank’s announcement that BPVI and Veneto Banca were failing or likely to fail, and the Single Resolution Board’s announcement that resolution action was not warranted in either case. In such circumstances, national insolvency rules apply and the national authorities wind up the institution. EU state aid rules apply in such a situation if the relevant Member State considers public support is necessary to mitigate the effects of the bank’s market exit. The aid being granted by the Italian state enables the sale of parts of the two banks' activities to Intesa Sanpaolo and consists of cash injections of approximately €4.785 billion, and state guarantees of a maximum €12 billion. The Commission considered the aid necessary to avoid an economic disturbance in the Veneto region as a result of the liquidation and concluded the measure was in line with EU state aid rules.

Commission approves French support for airport express rail line. On 26 June 2017, the Commission approved French support for the construction of a direct express railway line between the Parisian train station Gare de l'Est and the Paris-Charles-de-Gaulle airport. The project will cost an estimated €1.32 billion and operations to build the 32 kilometre line are expected the start in 2023. The aid will be given in the form of a tax-free grant, to be financed by a levy imposed from 2024 on all passengers using the line. In assessing the measure, the Commission found that the project will improve the coordination of different modes of transport, that the aid was necessary and proportionate for the implementation of the project, and that the selection of the operator of the passenger transport services that will use the line will be through a transparent and non-discriminatory tender. The Commission therefore concluded the support was in line with EU state aid rules.

State Aid

Commission approves Italian aid for market exit of BPVI and Veneto Banca. On 25 June 2017, the Commission approved, under EU state aid rules, Italian measures which facilitate the liquidation of of Banca Popolare di Vicenza (BPVI) and Veneto Banca under Italian insolvency law. This follows the European Central Bank’s announcement that BPVI and Veneto Banca were failing or likely to fail, and the Single Resolution Board’s announcement that resolution action was not warranted in either case. In such circumstances, national insolvency rules apply and the national authorities wind up the institution. EU state aid rules apply in such a situation if the relevant Member State considers public support is necessary to mitigate the effects of the bank’s market exit. The aid being granted by the Italian state enables the sale of parts of the two banks' activities to Intesa Sanpaolo and consists of cash injections of approximately €4.785 billion, and state guarantees of a maximum €12 billion. The Commission considered the aid necessary to avoid an economic disturbance in the Veneto region as a result of the liquidation and concluded the measure was in line with EU state aid rules.

Commission approves French support for airport express rail line. On 26 June 2017, the Commission approved French support for the construction of a direct express railway line between the Parisian train station Gare de l'Est and the Paris-Charles-de-Gaulle airport. The project will cost an estimated €1.32 billion and operations to build the 32 kilometre line are expected the start in 2023. The aid will be given in the form of a tax-free grant, to be financed by a levy imposed from 2024 on all passengers using the line. In assessing the measure, the Commission found that the project will improve the coordination of different modes of transport, that the aid was necessary and proportionate for the implementation of the project, and that the selection of the operator of the passenger transport services that will use the line will be through a transparent and non-discriminatory tender. The Commission therefore concluded the support was in line with EU state aid rules. 

Commission approves Swedish scheme to reduce taxation on employee share options. On 26 June 2017, the Commission approved a Swedish scheme to reduce taxation on employee share options under EU state aid rules. The support scheme will amount to SEK 160 million (approximately €16.35 million) spread over 10 years. The aid will be granted through a reduction in the taxation of employee share options, in particular, employers will pay lower social security contributions and employees will benefit from income tax relief when exercising their share options. This measure will reduce the overall employment costs for young and small companies and allow them to recruit and retain employees, without unduly distorting competition. In turn, this will enable such companies to contribute further to economic growth and innovation. The Commission concluded that the measure was in line with EU state aid rules.

Commission approves sale of Italian bridge bank to BPER. On 29 June 2017, the Commission approved the sale of Italian bridge bank Nuova Carife to BPER Banca under EU state aid rules. The bridge bank was one of four created in 2015 when the Bank of Italy decided to put into resolution four smaller banks. The other three bridge banks were sold to UBI Banca and this sale was approved by the Commission earlier this year. The purchase by BPER depended on its remaining non-performing loans being sold to a third party on market terms and the Italian resolution fund injected additional capital of €295 million into the bridge bank and granted a set of guarantees in relation to this. The Commission found that the sale of the bridge bank was open and competitive and that the Italian authorities selected the best available bid. Furthermore, the business plan of BPER foresees the full integration of the activities of the loss-making bank and it will consequently disappear from the market thus addressing any undue distortion of competition. The Commission therefore concluded that the measure was in line with EU state aid rules.

UK Competition

CMA issues final determination in Northern Ireland gas distribution appeal. On 26 June 2017, the Competition and Markets Authority (CMA) issued its final determination in an appeal by Firmus Energy (Distribution) Ltd (FE) against the Northern Ireland Utility Regulator’s (UR) price control decision in relation to gas distribution. FE has a licence for a gas distribution network in 10 towns across Northern Ireland and the appeal related to the price control imposed on FE by UR for the period from January 2017 to December 2022. In its determination, the CMA has allowed the appeal on one ground, namely the incentive to connect new customers to the gas network. The CMA also allowed the appeal in part on another ground concerning FE’s operational expenditure. FE’s other two grounds of appeal were quashed by the CMA. The incentive has now been remitted back to UR for reconsideration.    

CMA decides not to refer IBA and Mallinckrodt merger to a Phase 2 investigation. On 26 June 2017, the CMA announced its decision not to refer the completed acquisition by GLO Dutch Bidco of Mallinckrodt Netherlands Holdings BV and Mallinckrodt Nuclear Medicine LLC to a Phase 2 investigation. Both parties supply single photon emission computed tomography (SPECT) radiopharmaceuticals in the UK which are used to diagnose disease in tissues and organs. In its initial investigation, the CMA found that in one SPECT product category the number of suppliers would reduce from three to two. Whilst this could substantially lessen competition, the size of the relevant market is below £5 million. The CMA therefore found there was no reason to conduct an in-depth investigation, and so decided to apply its statutory discretion not to refer the merger to a Phase 2 investigation.      

CMA publishes results of its stakeholder survey. On 26 June 2017, the CMA published the results of its stakeholder survey which was conducted to measure perceptions of the CMA’s performance for 2016/17. The survey took place between November 2016 and January 2017, during which a total of 329 telephone interviews with various CMA Stakeholders (including businesses, government departments, trade associations, and professional advisors) were completed. The results show that overall satisfaction has remained stable since 2009 with an improvement across some areas. However, there were certain areas in which improvement is still needed, for example, some stakeholders expressed a need for improved communication with more of an emphasis on plain English and others were dissatisfied with the application of “one size fits all” solutions. Furthermore, the survey showed that the CMA is perhaps viewed more as a theoretical body and therefore efforts should be made to better communicate its role. The recommendations arising from the survey include putting more emphasis on understanding the realities of each different sector, recruiting people with real world experience in the relevant sector, and adopting a more tailored approach. 

BREXIT

Commission sets out position paper on Ongoing Union Judicial and Administrative Procedures. On 28 June 2017, the Commission published its position paper entitled “Essential Principles on Ongoing Union Judicial and Administrative Procedures.” In this paper, the Commission suggests first that the Withdrawal Agreement should not deprive the European Court of Justice (ECJ) of its competence to adjudicate in proceedings involving the UK which are ongoing on the withdrawal date, and second that arrangements should be made to ensure Union institutions, bodies, offices, and agencies retain their competence to conduct administrative procedures which are pending on the withdrawal date. This means that cases involving the UK which arose before Brexit could still be pursued by EU authorities after the UK’s withdrawal, and the authorities would still have the power to start or open investigations that arose before withdrawal. These principles are to be presented to the UK in the context of negotiations under Article 50.