EU Mergers

Phase I Mergers

  • M.8270 EDF / CDC / RTE (24 March 2017)
  • M.8273 STANDARD / BRAAS MONIER (27 March 2017)
  • M.8341 LONE STAR FUND / XELLA INTERNATIONAL (29 March 2017)
  • M.8359 AMUNDI / CREDIT AGRICOLE / PIONEER INVESTMENTS (24 March 2017)
  • M.8370 AMUNDI IMMOBILIER / MALAKOFF MEDERIC / TAS KAPSTADTRING 2 (29 March 2017)
  • M.8397 PARTNERS GROUP / CERBA HEALTHCARE (30 March 2017)
  • M.8400 ENGIE GROUP / SOPER / BPCE GROUP / LCS4 ET LCS DU CENTRE (27 March 2017)
  • M.8419SEGRO / PSPIB / SELP / TARGET ASSETS (29 March 2017)

EU Competition 

Commission conditionally approves Dow and DuPont merger. On 27 March 2017, the European Commission (Commission) conditionally approved the proposed merger between the two US chemical companies, Dow and DuPont, subject to conditions. Following a Phase II investigation, the Commission was concerned that the merger would significantly reduce competition in a number of existing markets for pesticides, such as the market for herbicides, insecticides and fungicides, and significantly reduce competition for certain petrochemical products. The Commission was also concerned that the merger would reduce innovation for safer and better products in the pest control industry as only five players are active globally in research and development. To address these concerns, the parties will divest parts of DuPont’s existing global pesticide business including its research and development organisation and divest relevant assets in Dow’s petrochemical business to preserve competition for certain petrochemical products.

General Court dismisses Deutsche Telecom's appeal. On 28 March 2017, the General Court dismissed the appeal by Deutsche Telecom AG against the Commission’s decision to refuse it access to documents in the Commission’s administrative case file concerning an investigation into a suspected breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission had opened an investigation into the practices of certain telecommunications companies which were potentially restricting competition within the internet connectivity services markets. The investigation closed in 2014. Deutsche Telecom subsequently requested access to the documents on the Commission’s file. The Commission rejected this request and refused to give access to its internal documents and documents exchanged with third parties under Article 4(2) of Regulation No 1049/2001 which relates to the protection of commercial interests of the undertakings concerned. The General Court ruled the Commission had acted appropriately in refusing Deutsche Telecom access to the documents and therefore dismissed their appeal.

Commission blocks merger between Deutsche Börse and London Stock Exchange. On 29 March 2017, the Commission announced that it has blocked the proposed merger between Deutsche Börse AG (DBAG) and London Stock Exchange Group (LSEG). The merger would have combined the activities of the two largest European stock exchange operators. Both DBAG and LSEG own stock exchanges in Germany, Italy, and the UK along with several of the largest clearing houses in Europe. The Commission concluded that the proposed merger would significantly reduce competition in the markets for clearing fixed income instruments in Europe by creating a de facto monopoly in clearing fixed income instruments. According to the Commission, this monopoly would have an effect on the downstream markets for settlement, custody and collateral management as well. The parties failed to offer the required remedies to address the Commission’s concerns. As a result, the Commission decided to prohibit the merger.

State Aid

Commission approves €12 million Italian aid scheme for new airline route. On 27 March 2017, the Commission announced that it has approved the Italian aid scheme designed to provide aid to airlines in order to launch new routes to the Italian region of Calabria. The scheme will allow the Calabria regional government to subsidise up to half of the airport charges paid by airlines for the operation of routes to destinations not currently connected to the region of Calabria for a period of up to three years. The Commission concluded that the scheme will improve connections to the region of Calabria without unduly distorting competition and therefore found that the scheme was in line with EU state aid rules. 

Commission approves Danish support for offshore wind farm. On 28 March 2017, the Commission announced that it has approved Danish support for the 600 MW Kriegers Flak offshore wind farm under EU state aid rules. The Commission concluded that the project will help reduce carbon dioxide emissions and increase the share of renewable energy produced in Denmark in line with EU energy and climate goals, without unduly distorting competition.     

Commission approves Latvian short-term export credit insurance scheme. On 30 March 2017, the Commission announced that it has cleared the Latvian short-term export credit insurance scheme in finding that the scheme was in line with EU state aid rules. The Commission concluded that the insurance cover provided by the scheme to exporters in Latvia is unavailable in the private market. They also found that there was a lack of insurance coverage for small and medium-sized companies with a small export turnover and for single export transactions. The scheme has been authorised until 31 December 2022. 

UK Competition

CMA issues two infringement decisions in furniture products cartel case. On 27 March 2017, the Competition and Markets Authority (CMA) issued two decisions finding three suppliers of furniture parts had infringed Chapter 1 of the Competition Act 1998 and Article 101 of the TFEU. In the first decision, the CMA found two suppliers of drawer wraps, namely BHK (UK) Ltd. and Thomas Armstrong (Timber) Ltd., had infringed competition law between 2006 and 2008 by engaging in an illegal cartel agreement to share the market and co-ordinate commercial behaviour through bid-rigging and by exchanging confidential information. The CMA therefore fined the suppliers a total of £1,509,000. The second decision found two suppliers of drawer fronts, namely Thomas Armstrong (Timber) Ltd. and Hoffman Thornwood Ltd., had infringed competition law between 2006 and 2008 and again in 2011 by engaging in an illegal cartel agreement to share the market and co-ordinate commercial behaviour through bid-rigging and by exchanging confidential information. The CMA therefore imposed a penalty of £1,309,000 on the two parties.     

CMA publishes decision on conduct in the modelling sector. On 27 March 2017, the CMA published the full text of its decision finding five modelling agencies had breached Chapter 1 of the Competition Act 1998 and Article 101 of the TFEU between April 2013 and March 2015. The agencies were found to have taken part in a single, continuous infringement and/or concerted practice which had the object of preventing, distorting, or restricting competition in the supply of modelling services in the UK. The five agencies involved were FM Models, Models 1, Premier, Storm, and Viva and the objective behind such contacts was to coordinate their commercial and pricing behaviour. The total fine amounted to £1,533,500.      

CMA publishes decision on galvanised steel tanks cartel. On 29 March 2017, the CMA published the full text of its decision finding galvanised steel tank suppliers breached Chapter 1 of the Competition Act 1998 and Article 101 of the TFEU. The CMA found that four suppliers, namely, Franklin Hodge Industries Limited and its parent Carter Thermal Industries Limited (FHI), Galglass Limited and its parents Kernoff Limited and Irish Industrial Tanks Limited (Galglass), KW Supplies Limited (KW Supplies) and CST Industries (UK) Limited and its parent CST Industries Inc. (CST), had participated in an illegal cartel in the galvanised steel tanks market between 2005 and 2012 by colluding to share the market, fix prices and rig bids. CST received full immunity under the CMA’s leniency policy whilst the other three companies were fined a total of over £2.6 million. The CMA additionally found that FHI, Galglass and KW Supplies, who had all participated in the main cartel, had also exchanged information about current and future prices with another supplier who was not part of the cartel in 2012, namely Balmoral Tanks Limited and its parent Balmoral Group Holdings Limited (Balmoral). The CMA imposed a fine of £130,000 on Balmoral, but the three suppliers did not receive any additional fine for this infringement. 

Brexit

UK Government triggers Article 50. On 29 March 2017, the government formally notified the European Council of the UK’s intention to withdraw from the EU under Article 50 of the Treaty on European Union (TEU). Following the notification, the European Parliament Conference of Presidents, endorsed a draft motion for a Resolution to wind up the debate on negotiations with the UK. The draft motion sets out the conditions for the final approval by the European Parliament of the withdrawal agreement with the UK, stressing, in particular, the importance of ensuring fair treatment of citizens in the remaining 27 EU Member States and the need for reciprocity between UK citizens living in the EU and EU citizens living in the UK. The vote on the draft Resolution will be held on 5 April 2017.      

UK Government publishes the Great Repeal Bill White Paper. On 30 March 2017, the UK Government published the Great Repeal Bill White Paper. This White Paper sets out the government’s proposals for ensuring the proper and continued functioning of the legal system following the UK’s exit from the EU. The White Paper sets out how the UK Government intends, by way of the Great Repeal Bill, to deliver as smooth as possible exit from the EU by first, repealing the European Communities Act 1972; second, by converting EU law to domestic law at the point of departure; and third, by correcting any EU law that would not function properly as it is when converted to UK law. The purpose of the Bill is to ensure the same laws apply after the UK leaves the EU and the UK Parliament will then be in a position to decide which laws to keep, change or repeal.