EU Mergers

Phase I Mergers

  • M.8453 NESTLE / BPW (16 October 2017)
  • M.8523 BD / BARD (18 October 2017)
  • M.8601 GREENERGY / INVER (16 October 2017)
  • M.8623 BOREALIS / OTPP / SSE / MAPLE (18 October 2017)
  • M.8646 PLATINUM / PATTONAIR (17 October 2017)

EU Competition

Agria Polska appeal against General Court’s dismissal published. On 16 October 2017, details of an appeal by Agria Polska against a General Court judgment dismissing its appeal against the European Commission’s (Commission) rejection of a complaint concerning parallel imports of plant protection products were published in the Official Journal. The action relates to alleged anti-competitive practices in the plant protection product market. Agria Polska’s claims have been rejected by the Polish competition authority, the Commission, and the General Court. Agria Polska is now claiming that the General Court disregarded errors made by the Commission in its assessment of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) when it dismissed the claim, among other things. 

EU Mergers

Commission instigates Phase II investigation into Celanese, Blackstone merger. On 17 October 2017, the Commission announced that it is initiating a Phase II investigation into the proposed acquisition by Blackstone Group LP (Blackstone) of Celanese Corporation (Celanese) (M.8547). The Commission is concerned that the transaction will reduce competition in the market for acetate tow, a chemical used in the manufacture of cigarette filters. The Commission’s concerns stem from its views that the market has high barriers to entry, and that the transaction may enable tacit anti-competitive behaviour. 

State Aid

Arca appeals against Commission refusal to provide documents published. On 16 October 2017, details of two Arca Capital Bohemia (Arca) appeals against Commission decisions refusing access to documents relating to state aid proceedings were published in the Official Journal. In March 2017, the Commission refused Arca access to documents in two state aid actions and Arca is now bringing an action before the General Court to seek the annulment of the Commission’s decisions. In particular, Arca claims that the Commission misapplied exceptions in Article 4(2) of Regulation 1049/2001 and disregarded the public interest in furnishing parties with information in state aid cases.

Commission publishes Sardinian airport state aid decision. On 18 October 2017, the Commission published its decision of 29 July 2016 on state aid paid by Sardinian airports to various airlines for so-called public service obligations in the Official Journal. The Commission decided that aid paid by two of the five airports to airlines including Ryanair, easyJet, and Wizzair constituted unlawful state aid and that it must be recovered from the relevant beneficiaries.

Commission notice on state aid recovery interest and reference rates published in the Official Journal. On 14 October 2017, a Commission notice was published in the Official Journal detailing state aid recovery interest rates and reference/discount rates which will be applicable from 1 November 2017.

UK Competition

CMA updates timetable in pharmaceutical pricing investigation. On 16 October 2017, the Competition and Markets Authority (CMA) amended its timetable in its investigation into suspected unfair pricing of certain pharmaceutical products by Concordia International RX (Concordia) in contravention of Chapter II of the Competition Act 1998 and Article 102 TFEU. The investigation was launched on 25 October 2016 into Concordia’s suspected unfair pricing practices, in particular the charging of excessive prices to customers including the NHS. The CMA has extended the period for gathering evidence from September 2017 to November 2017.

CMA releases decision in National House-Building Council review. On 18 October 2017, the CMA published its final decision in the review of the National House-Building Council’s (NHBC) undertakings given in December 1995. The undertakings relate to structural warranties, a type of insurance that protects against potential defects in new buildings. Following an investigation, the CMA is now seeking to review new undertakings which are more focused on encouraging effective competition than those given in 1995, primarily because the NHBC’s market share in the market continues to be high. The CMA is now consulting on proposed undertakings which would oblige the NHBC to clearly display on its website that builders can buy structural warranties from a variety of providers. The CMA is inviting comments until 1 November 2017.

CMA ceases mobility scooter investigation. On 19 October 2017, the CMA released a closure statement in relation to its investigation into suspected breaches of Chapter I of the Competition Act 1998 in the online supply of mobility scooters. The investigation into TGA Mobility Limited and 2DS & TGA Holdings Limited (together TGA) commenced in April 2017 in relation to practices preventing retailers from advertising branded TGA mobility scooters online or advertising them online below specified prices. To address the CMA’s concerns, TGA has ended those practices and implemented competition law training. As a result, the CMA has closed its investigation on administrative priority grounds.

UK Mergers

CMA accepts undertakings in lieu in relation to the acquisition by Origin UK of Bunn Fertiliser. On 16 October 2017, the CMA announced that it has accepted undertakings in lieu of reference for Origin UK Operations Limited’s (Origin UK) completed acquisition of Bunn Fertiliser Limited’s (Bunn Fertiliser) assets. In particular, due to the CMA’s concerns of a reduction of competition in Scotland, Origin UK will sell Bunn Fertiliser’s Montrose business to Glasson Grain Limited.

CMA publishes final report on merger between Cygnet Health Care and Cambian. On 16 October 2017, the CMA published its final report into the merger between Cygnet Health Care Limited (Cygnet) and the Cambian Adult Services division of Cambian Group plc (Cambian) following an in-depth Phase II investigation. Cygnet and Cambian overlap in the supply of hospital-based inpatient mental health rehabilitation services to customers including local authorities and the NHS. The CMA found that the transaction may be expected to result in a substantial lessening in competition in the rehabilitation market for male patients in the East Midlands. By way of remedies, the CMA considers that a divestment of facilities where overlaps exist will prevent the adverse effects and is seeking undertakings from Cygnet and Cambian to this end.

CMA reviews Rough gas storage undertakings given by Centrica. On 17 October 2017, the CMA released a decision statement to consider undertakings given by Centrica Storage Limited (CSL) and Centrica plc (Centrica) following its acquisition of the Rough gas storage facility from Dynegy in 2002. Rough is a North Sea gas field used to store gas in summer and deliver it in winter. Centrica’s purchase was subject to undertakings to keep CSL separate from and not to discriminate in favour of Centrica. Centrica announced in June 2017 that it intends to close Rough due to its physical deterioration and is therefore requesting the undertakings be removed.

CMA announces decision to refer Electro Rent’s acquisition of Microlease to Phase II investigation. On 19 October 2017, the CMA announced that it is commencing a Phase II investigation into Electro Rent Corporation’s (Electro Rent) completed acquisition of Test Equipment Asset Management and Microlease Inc. (Microlease). Both Electro Rent and Microlease rent, lease, and sell testing and measurement equipment used in industries including aerospace, telecommunications, and utilities. The CMA’s Phase I investigation revealed that the parties are the main competitors in the market and, while there may be some competitive constraint following the transaction, customers are concerned that they may be unable to find credible rental alternatives. The statutory timetable for a Phase II investigation is 24 weeks.

BEIS publishes Green Paper on proposed changes to merger control in light of national security. On 17 October 2017, the Department for Business, Energy & Industrial Strategy (BEIS) published a Green Paper laying out its review of the Enterprise Act 2002 and its powers in connection with national security and foreign investment. For dual and military use and parts of the advanced technology sectors, the Green Paper suggests reducing the turnover threshold from £70 million to £1 million and removing the 25% share of supply requirement. Long term, mandatory notification and expanded “call-in” powers may be applied to transactions in other sensitive sectors. The consultation invites comment by 14 November 2017.