EU Mergers

Phase I Mergers

  • M.8084 BAYER / MONSANTO (30 April 2018)
  • M.8652 ACCURIDE / MEFRO WHEELS (30 April 2018)
  • M.8658 UTC / ROCKWELL COLLINS (4 May 2018)
  • M.8766 LKQ/ STAHLGRUBER(4 May 2018)

EU Competition  

Commission confirms unannounced inspections in the metal packaging sector. On 3 May 2018, the European Commission (Commission) issued a press release confirming that on 24 April 2018 its officials carried out unannounced inspections in several Member States at the premises of companies operating in the metal packaging sector. The Commission is concerned that the companies in this sector may have breached EU competition rules that prohibit cartels and restrictive business practices. The Commission officials were accompanied by counterparts from the relevant national competition authorities on their inspection. The Commission explained that unannounced inspections are a preliminary step into suspected anti-competitive practices but this does not mean that the companies inspected are guilty of anti-competitive behaviour. 

Commission publishes full text decision on retail food packaging cartel. On 3 May 2018, the Commission published its decision dated 24 June 2015, which found 41 legal entities in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) for participating in five separate cartels supplying polystyrene plastic trays and one cartel supplying polypropylene plastic trays used for retail packaging of fresh foods. For each cartel, the illegal practices consisted of taking part in multilateral or bilateral meetings in order to maintain high prices, pass on the rising costs of raw materials in a coordinated manner and to preserve the status quo in relation to historically allocated clients and markets. The Commission imposed fines totalling €115,865,000 on the parties, with the exception of the immunity applicant.

State Aid 

Commission approves seventh prolongation of Irish credit union restructuring scheme.  On 30 April 2018, the Commission announced that the prolongation of the Irish scheme targeted at restructuring credit unions was in line with EU state aid rules and the 2013 Banking Communication. The scheme aims to ensure the stability and long-term viability of credit unions and the credit union sector in Ireland. The Commission found that the impact of such measures on competition was limited as credit unions are small and only conduct business with members. The scheme was initially authorised by the Commission in October 2014. 

UK Competition 

CMA publishes annual concurrency report. On 30 April 2018, the Competition and Markets Authority (CMA) published its latest annual report on the concurrency regime. Concurrency refers to the notion that both the CMA and sector regulators have powers to enforce prohibitions against anti-competitive agreements and abuses of a dominant position in the regulated sectors as well as carry out market studies and refer markets to the CMA for a detailed investigation. The concurrency regime was developed by the government to ensure effective use of competition powers in the regulated sectors. The report notes that almost every regulator has now launched at least one investigation under the Competition Act (CA) 1998, and that regulators and the CMA have developed strong relationships. The report also lists a few highlights, including an increase in the number of new cases and the launch of the Payment System Regulator’s first ever CA 1998 case.

UK Mergers 

CMA issues press release statement on the proposed Sainsbury’s/ASDA merger. On 30 April 2018, the CMA issued a press release stating that the proposed merger between Sainsbury’s and ASDA was likely to be subject to review by the CMA. The CMA in its statement explained that it is typical for the companies to engage in pre-notification discussions with the CMA prior to a formal investigation. The CMA also noted that the companies were able to request a fast track referral of case to a Phase 2 investigation, which may result in a merger being cleared, prohibited, or allowed to proceed subject to remedies by either one or both parties to the merger.

Business, Energy and Industrial Strategy Committee and Environment, Food and Rural Affairs Committee publishes joint letter sent to the CMA in relation to Sainsbury’s/ASDA merger. On 3 May 2018, the Business, Energy and Industrial Strategy (BEIS) Committee and Environment, Food and Rural Affairs (EFRA) Committee of the House of Commons announced that it has issued a joint letter to the CMA in relation to the proposed merger between Sainsbury’s and ASDA. The letter indicates BEIS’ and EFRA’s concerns on the impact the merger will have on the grocery supply chain. In particular, the market dominance that would result from the proposed merger. The BEIS and EFRA are interested in the timing, length, and scope of the CMA investigation as well as the criteria that will be used to determine whether the merger will create a monopoly in the local market.  

Secretary of State issues Public Interest Intervention Notice to Trinity Mirror and Northern & Shell Media Group. On 1 May 2018, Secretary of State for Digital, Culture, Media and Sport, Matt Hancock issued a written statement to the House of Commons confirming that he has issued a Public Interest Intervention Notice (PIIN) to Trinity Mirror plc and Northern & Shell Media Group Limited in relation to their merger. The PIIN was issued on the grounds of public interest. The Secretary of State was concerned about the potential impact the transfer of newspapers would have on editorial decision making and the need for sufficient plurality of views. The PIIN requires Ofcom to report back to the Secretary of State on the media public interest considerations and requires the CMA to report back on any competition issues by 31 May 2018. These findings will then be taken into account by the Secretary of State, in deciding whether or not to refer the merger for a more detailed investigation. 

CMA issues notice of extension of inquiry period for Phase 2 investigation of Vanilla Group/Washstation merger. On 1 May 2018, the CMA published a notice of extension of inquiry period of the Phase 2 investigation of the completed acquisition of Washstation Limited by Vanilla Group Limited (VG). This notice is issued under section 39(4) of the Enterprise Act 2002. The CMA was due to publish a report on this Phase 2 investigation by 30 September 2018. However, the CMA has noted that JLA New EquityCo Limited (JLA), the parent of VG has failed to provide the relevant documents and information within the deadline issued by the CMA. Therefore, the inquiry period is extended until JLA complies with the CMA’s previous notice to deliver the relevant documents and information or until the CMA decides to cancel this extension.

CMA issues final report on 21st Century Fox/Sky merger to Secretary of State. On 1 May 2018, the CMA announced that it has sent its final report on 21st Century Fox/Sky merger to the Secretary of State for Digital, Culture, Media and Sport, Matt Hancock. The Secretary of State has acknowledged receipt of this report in his written statement to the House of Commons and noted that he has 30 working days to make a final decision on whether the merger operates or may be expected to operate against public interest.  

CMA publishes revocation order in relation to the acquisition by Medtronic plc of certain assets of Animas Corporation. On 2 May 2018, the CMA published a revocation order under section 72(4)(b) of the Enterprise Act 2002. The CMA previously made an initial enforcement order in relation to the completed acquisition by Medtronic plc of certain assets of Animas Corporation. This enforcement order was then varied to include Johnson & Johnson and Johnson & Johnson Medical Limited as an addressee. Based on the evidence the CMA has now received, the CMA considers it appropriate to revoke the initial enforcement order. The CMA will, however, still be continuing its assessment of the merger and has not reached a decision on whether the merger will result in a substantial lessening of competition in the market. 

CMA issues initial enforcement order on Restore plc. On 4 May 2018, the CMA issued an initial enforcement order under section 72(2) of the Enterprise Act 2002 (EA) in relation to the acquisition by Restore plc (Restore) of certain businesses of TNT UK Limited. The CMA wishes to ensure that no integration action is taken pending final determination of any reference that is made by the CMA. 

CMA issues initial enforcement order on Sims Group. On 4 May 2018, the CMA issued an initial enforcement order in relation to the completed acquisition by Sims Group UK Holdings Limited of Morley Waste traders Limited, Lord & Midgley Limited, and Kaystan Holdings Limited. This order prevents pre-emptive action that may prejudice the reference or any action taken by the CMA under Part 3 of the EA.  

Speeches & Publications 

Commission publishes speech by Margrethe Vestager on a fair deal for consumers in Belgium. On 4 May 2018, the Commission published a speech given by its Commissioner, Margrethe Vestager in celebration of 25 years of competition law in Belgium. The Commissioner in her speech, gave recognition to the partnership between the Belgium Competition Authority and the Commission and noted the importance of teamwork. She also discussed the allegations that AB InBev were restricting parallel imports on its beer, the role of state aid rules in supporting the EU’s investments in climate change, and small businesses and explained that competition rules should be the “scaffolding that helps to build a stronger, fairer economy.”