EU Mergers

Phase I Mergers

  • M.8982 IVANHOE CAMBRIDGE / PSPIB / JV (30 August 2018)
  • M.8986 EIH / KRONE-MUR / PRIMAVIA (28 August 2018)
  • M.8990 PIAG / MTIB / ABATEC (28 August 2018)
  • M.9027 FOSUN INTERNATIONAL / FFT (28 August 2018)
  • M.9078 IVANHOE CAMBRIDGE / PSPIB / VGMV LP JV (30 August 2018

State Aid

Commission approves extension of Danish resolution scheme for small banks. On 31 August 2018, the European Commission (Commission) published its approval under EU state aid rules, of the extension of a Danish resolution scheme for small banks with total assets below €3 billion. This scheme is available to banks that are found to be in distress by the competent national authorities and is intended to facilitate the winding up of a small bank where required. The Commission initially authorised this scheme in September 2010 and it was prolonged several times, including most recently in August 2017. The Commission found that this scheme is in line with the 2013 Banking Communication and EU banking rules. This scheme is now authorised by the Commission to run until August 2019. 

Commission authorises extension of Italian guarantee scheme for non-performing loans.On 31 August 2018, the Commission approved the prolongation of an Italian guarantee scheme to facilitate the securitisation of non-performing loans. The scheme allows for Italian banks meeting certain conditions to request a state guarantee on the lower-risk senior notes issued by private securitisation vehicles which assist them in financing the sale of their non-performing loan portfolios. The Commission noted that this scheme is an important component of Italy’s strategy to tackle banks’ asset quality problems and that under this scheme, the state guarantees on the senior notes will continue to be remunerated at market terms according to the risk taken. As such, the Commission has granted authorisation for this scheme to run until 7 March 2019. 

Commission issues approval for prolongation of Polish credit union liquidation scheme. On 31 August 2018, the Commission authorised the eighth prolongation of the Polish credit union liquidation scheme. The scheme is available for credit unions that are member-owned entities and provide loans, savings accounts and payment services only to their membership. The Commission concluded that this scheme is in line with EU state aid rules and the 2013 Banking Communication because it is well-targeted, proportionate, and limited in time and scope. The current approval given by the Commission is granted until 15 July 2019. 

UK Mergers

CMA publishes issues statement in relation to its Phase 2 investigation on the acquisition of Clearscore by Experian. On 28 August 2018, the Competition and Markets Authority (CMA) published an issues statement as part of the CMA’s referral of the proposed acquisition of Credit Laser Holdings Limited (Clearscore) by Experian Limited for an in-depth Phase 2 investigation. The issues statement sets out the main issues likely to be considered by the CMA in reaching its decision on whether the proposed transaction results in a substantial lessening of competition. These issues include a consideration of the markets in which the parties overlap, the potential effects of the transaction in the competitive situation absent the transaction, the application of various theories of harm to the transaction, and any countervailing factors that may mitigate any substantial lessening of competition that has been identified by the CMA in its assessment. This issues statement, however, does not preclude the CMA from taking into account any additional issues that may be identified during this Phase 2 investigation. 

CMA publishes decision of its Phase 1 investigation into the completed acquisition of Morley Waste by Sims. On 29 August 2018, the CMA published its full text decision in relation to Sims Group UK Limited’s (Sims) acquisition of Morley Waste Traders Limited, Lord Midgley Limited, and Kaystan Holdings Limited (together, Morley Waste). Both parties overlap in the recycling of scrap metal in the UK at all levels of the supply chain and in the purchase of unprocessed scrap metal which are then sold on to customers as processed scrap metal. The CMA found that in relation to the purchase of scrap metal in the Hull region, several competitors within the region provide an effective competitive constraint on both Sims and Morley Waste in the purchase of unprocessed and processed scrap metal within the Hull region. Similarly, in relation to the purchase of a shredder feed within a 150km radius of Morley Waste Reservoir Road site, the CMA noted that several credible competitors would also constrain the parties after the merger has taken place. As for the supply of ferrous and non-ferrous processed scrap metal in the UK, the CMA also found that both Sims and Morley Waste’s combined share of supply was low. Therefore, the CMA concluded that the merger would not create a realistic prospect of a substantial lessening of competition in the scrap metal recycling and purchase market and that there was no need to refer the merger to a further Phase 2 investigation. 

CMA issues provisional clearance for merger between SSE Retail and Npower. On 30 August 2018, the CMA published a summary of its provisional findings in relation to the merger between SSE Retail and Npower Group Limited (Npower). Both companies are active in the retail supply of electricity and gas to domestic UK customers. In the CMA’s provisional findings, the CMA found that there was limited customer switching between SSE Retail and Npower and that the reduction in the number of energy firms from six to five would not affect how the merged entity would benchmark its price levels. The CMA also noted that neither SSE Retail nor Npower has a price leadership role and that the factors determining large energy firms’ standard variable tariff (SVT) prices would not be affected by this merger. As such, the CMA has provisionally concluded that the merger would not result in a substantial lessening of competition in the supply of electricity and gas to UK consumers. The CMA has also issued a notice of its provisional findings on this merger and has invited interested parties to comment on its provisional findings. Comments should be provided to the Inquiry Group by 5pm on 20 September 2018.

CMA refers Motor Fuel Group’s acquisition of MRH for Phase 2 investigation. On 31 August 2018, the CMA issued a press release announcing that it will refer Motor Fuel Group’s (MFG) acquisition of MRH for an in-depth Phase 2 investigation unless MFG is able to address the CMA’s competition concerns. Both MFG and MRH run petrol stations across the UK.  Following a Phase 1 investigation, the CMA has found that MFG and MRH are close competitors in 29 locations, and that the merged entity in such locations could result in an increase in prices for local motorists. The CMA has given MFG until 7 September 2018 to address these competition concerns. Otherwise, the CMA will proceed with referring this transaction for a Phase 2 investigation.