On 26 October 2017, the General Court ('GC') dismissed the appeal by Marine Harvest of the European Commission's ('Commission') decision, which resulted in a fine of €20 million for infringing the standstill requirements under the European Union's Merger Regulation (the 'EUMR'").
Marine Harvest, an EU-wide salmon farmer and processor, acquired its rival Morpol in three stages:
- it acquired a 48.5 per cent shareholding in December 2012;
- it then purchased 38.6 per cent of the remaining shares in March 2013, as part of a mandatory public bid; and
- the acquisition of the remaining shares was completed in November 2013.
However, the Commission was not formally notified about the takeover until August 2013. In July 2014, the Commission concluded that Marine Harvest had failed to notify the acquisition and had implemented the acquisition without prior notification in breach of the EUMR and imposed a total fine of €20 million.
In its judgment, the GC has confirmed that the Commission correctly found that the acquisition of a 48.5 per cent stake in December 2012 conferred upon Marine Harvest de facto sole control over Morpol since it held a clear majority at the shareholders’ meetings as a result of the dispersion of the remaining shares and previous attendance patterns.
Importantly, the GC held that the exception from the standstill obligation under Article 7(2) of the EUMR was not applicable. According to that provision, the standstill obligation does not apply to a public bid or to a series of transactions in securities by which control is acquired "from various sellers".
In particular, the GC rejected arguments claiming that the December 2012 acquisition and the subsequent public offer constitute a "single concentration". It made clear that this concept does not cover a situation where sole control of a single target is acquired by means of a single private purchase from one seller, even where it is followed by a mandatory public offer.
The judgment also confirms the Commission's approach in finding that Marine Harvest's breaches of the filing and standstill obligations constituted two separate infringements, justifying two distinct fines in a single decision.
The judgment comes at a time of increased enforcement globally of the notification and standstill obligations by national and supranational competition authorities and further emphasises the importance of notifying transactions carried out in stages before there has been an acquisition of control.
With thanks to Jessica Bracker of Ashurst for her contribution
All articles in the November edition of the Competition newsletter
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Liberty Global / Ziggo merger clearance decision annulled
Marine Harvest's acquisition of Morpol confirmed as 'gun jumping' by General Court
Show's over - CMA accepts commitments to protect fair competition
Wallpaper cartelists hung out to dry as court increases their fine on appeal
