EU Mergers

Phase I Mergers

  • M.8218 EGERIA INDUSTRIALS / CLONDALKIN (30 November 2016)
  • M.8225 GEOPOST / CORFIN 14 / BRT (24 November 2016)
  • M.8249  SHV / DELI HOME AND GARDEN (25 November 2016)
  • M.8264 MICHELIN / LIMAGRAIN / EXOTIC SYSTEMS (28 November 2016)


WTO rules Boeing tax incentive is illegal. On 28 November 2016, the World Trade Organisation (WTO) issued a panel report that found the US state of Washington acted illegally and breached international trade rules when granting aid to US aircraft maker Boeing in the form of conditional tax incentives for the Boeing 777X. The ruling supports part of a complaint made by the European Commission (Commission), which itself was found in breach of international trade rules by the WTO for the support the UK, France and Germany previously provided to Airbus. The WTO found that the 2013 US decision to extend tax breaks for Boeing until 2040 discriminated against foreign suppliers of wings, as the tax breaks were conditional on Boeing’s use of domestically produced wings. EU Trade Commissioner Cecilia Malmström said that the WTO ruling "is an important victory for the EU and its aircraft industry. The panel has found that the additional massive subsidies of USD 5.7 billion provided by Washington State to Boeing are strictly illegal. We expect the US to respect the rules, uphold fair competition, and withdraw these subsidies without any delay".

State Aid

Commission approves amendments to Finnish regional aid map. On 25 November 2016, the Commission announced that it had approved amendments to Finland’s plans to grant State aid between 2014 and 2020, noting that it was in line with the 2014 Guidelines the Commission has previously published. The Guidelines allow Member States to have mid-term reviews of their approved regional aid maps, and enables them to amend the list of supported areas and/or maximum levels of aid (also referred to as intensities of aid). The map defines the Finnish regions that are eligible for regional investment aid under State aid rules and establishes the aid intensities that can be granted. The Guidelines allow Member States to take into account recent changes in the social and economic circumstances of individual regions and amend their State aid plans accordingly.

Commission clears Czech renewable energy scheme. On 28 November 2016, the Commission approved the Czech Republic’s support scheme in favour of all types of installations producing renewable energy built in the Czech Republic between 1 January 2006 – 31 December 2012. The scheme will have a total budget of CZK 836.5 billion over its lifetime (around €30.95 billion) and will be financed by a surcharge levied on electricity consumers and contributions from the State budget. The 2001 and 2008 Commission environmental guidelines allow Member States to provide support for renewable energy generation. The Commission noted, in compliance with the afore-mentioned guidelines, the State aid offered by Czech Republic under this scheme takes the form of preferential prices (feed-in tariffs) and premiums on top of the market price (green bonuses). The renewable energy scheme also incorporates a review mechanism which ensures that installations are not overcompensated and the State aid is limited to the minimum necessary to achieve the scheme's objectives. This, along with the Czech Republic’s commitment of investing an additional €20 million in interconnection projects, led to Commission to conclude that the potential distortions of competition brought about by the public financing are limited. The Commission further noted that this scheme would assist the Czech Republic in achieving its 2020 renewable energy targets.

Commission approves UK supplementary electricity capacity auction. On 5 December 2016, the Commission approved the UK’s plans to hold a supplementary electricity capacity auction. The auction intends to “bridge the gap” until the approved Great Britain Capacity Market comes into force at the end of 2018. The Great Britain Capacity Market is a British government supported scheme that aims to ensure that sufficient electricity supply is available to cover consumption at peak times. Since the scheme was approved in 2014, the Commission noted that market conditions have changed considerably in the UK (in particular, wholesale prices have significantly decreased) and this supplementary auction will allow the scheme to come into force a year earlier than planned, to assist the capacity providers that risk closing as a result of the change in the market conditions and ensure that the UK retains sufficiently reliable capacity. The supplementary auction has been approved under the same conditions as those approved for the Great Britain Capacity Market. Both schemes will provide power plants and demand response operators with remuneration, in addition to what the power plants and demand response operators obtain from selling electricity on the market. The Commission noted that the potential distortion of competition arising from this State aid has been reduced “to the minimum” as the UK has put in place measures to accelerate competition, such as encouraging new build generating capacity and schemes to attract “as many demand response operators as possible” to the supplementary capacity auction.

Member States provide backing for free WiFi in public areas. On 5 December 2016, the Commission announced that Member States have provided their backing for the Commission’s WiFi4EU initiative. The initiative allows any local authority within the European Union to apply for a voucher and offer free WiFi connections to any citizen. The vouchers will be allocated on a first-come, first-served basis and also will aim to keep a geographically balanced distribution. The Commission has also implemented a “simple and non-bureaucratic process” for public authorities wishing to offer WiFi in areas where a similar public or private offer does not yet exist. On 14 September 2016, President Juncker said in his State of the Union Address: “Everyone benefiting from connectivity means that it should not matter where you live or how much you earn. So we propose today to equip every European village and every city with free wireless internet access around the main centres of public life by 2020.” Total funding of €120 million is available in the 2017-2019 period for this public voucher scheme, which the Commission estimates has the potential to deliver connectivity to 6000-8000 public spaces, generating 40 to 50 million Wi-Fi connections per day. WiFi4EU will be funded by the Connecting Europe Facility instrument.

Commission clears extended activities of Portuguese Development Bank. On 28 November 2016, the Commission approved an extension to the activities of the Portuguese Development Bank Instituição Financeira de Desenvolvimento (IFD). The creation of the IFD, funded by the Portuguese state and European Structural and Investment Funds (ESIF), was approved by the Commission in October 2014. The IFD manages holding or specialised funds and provides SMEs with access to funding on a co-investment basis with private investors. It also manages and channels ESIF allocated to Portugal for the 2014-2020 financing period, as well as reimbursements from ESIF-funded programmes. As part of the Commission’s initial approval, Portugal committed to notify any further capital injection into the IFD or any expansion of the IFD’s activities to the Commission for State aid scrutiny. The Commission’s decision in the present case enables the IFD to expand its activities to providing general support of SMEs. The Commission notes that this is in line with the General Block Exemption Regulation, which allows public authorities to implement a broad spectrum of SME support activities without having to notify it to the Commission for prior authorisation. The IFD has also been given permission to implement measures approved under the Commission's Guidelines on state aid for risk financing. Finally, the approval also allows the IFD to participate in various financial instruments, such as the European Fund for Strategic Investments, COSME, Horizon 2020 and the SME Initiative.

UK Competition

CMA approves Survitec’s purchase of Wilhelmsen marine business. On 2 December 2016, the CMA cleared the completed acquisition of the marine safety business of Wilhelmsen Maritime Services A/S by Survitec Group Ltd (Survitec). Survitec manufactures marine evacuation systems, life rafts, life jackets, immersion suits and inflatable boats, and the marine safety business of Wilhelmsen Maritime Services A/S (Wilhelmsen) provides commercial life rafts for rental and exchange and safety equipment such as firefighting equipment and inert gas systems. The Competition and Markets Authority (CMA) noted that the merger could lead to “a substantial lessening of competition” in the supply of leased commercial life rafts, with only one other “significant supplier” offering these products in the UK. However, the CMA has decided to exercise its discretion not to refer the merger for a Phase 2 investigation under the Enterprise Act 2002 due to “the market concerned being of insufficient size to warrant the costs of such an investigation”.