On 6 July 2017, the European Commission sent three separate statements of objections ("SO") to companies alleging procedural breaches of the EU Merger Regulation.
Provision of misleading information
The first SO concerns the Merck/Sigma-Aldrich transaction, which was conditionally cleared by the Commission on 15 June 2015 on the basis that the parties divest certain laboratory chemical assets of Sigma-Aldrich. The Commission alleges that Sigma-Aldrich did not provide the Commission with important information about an innovation project closely linked to the divested assets, which the Commission considers, had it been aware of its existence, should have been included in the remedy package as it may have substantially increased the divested assets sales.
The second SO concerns the GE/LM Wind transaction. GE originally notified its acquisition of LM Wind on 11 January 2017 but later withdrew the notification on 2 February 2017. The transaction was later re-notified on 13 February 2017 and cleared on 20 March 2017. The Commission alleges that critical information concerning GE's research and development activities and the development of a specific product were omitted from the original notification such that it could not properly assess GE's position on the onshore and offshore wind turbine markets. Further, the Commission alleges that the missing information also hindered its ability to assess a parallel transaction in the same sector: Siemens' acquisition of Gamesa.
If the Commission later concludes that Merck or GE intentionally or negligently supplied incorrect or misleading information, it may impose a fine of up to 1% of their respective annual worldwide turnover. Recently, the Commission fined Facebook €110 million for providing incorrect or misleading information during the Commission's 2014 investigation of Facebook's acquisition of WhatsApp (see VBB on Competition Law, Volume 2017, No. 5, available at www.vbb.com).
Failure to file – or completion prior to clearance
The third SO concerns the Canon/Toshiba Medical Systems transaction, which was unconditionally cleared by the Commission on 19 September 2016. The Commission alleges that a two-step "warehousing" structure relying on an interim buyer essentially allowed Canon to acquire Toshiba Medical Systems. In the first step, the interim buyer acquired 95% of the share capital of Toshiba Medical Systems for €800, whereas Canon paid €5.28 billion for the remaining 5% and certain share options over the interim buyer's stake. In the second step, following the Commission's approval of the merger, the share options were to become exercisable by Canon, which would thus allow it to acquire 100% of the shares of Toshiba Medical Systems. According to the clearance decision, Canon would only have been able to exercise the share options once it obtained all the necessary antitrust clearances.
If the Commission concludes that Canon implemented its acquisition of Toshiba Medical Systems prior to notification, it could impose a fine of up to 10% of Canon's annual worldwide turnover. Previously, the Commission imposed, in two separate cases, €20 million fines on Electrabel and Marine Harvest for failing to notify their transactions prior to obtaining merger clearance. In both cases, the parties closed the deal long before notifying the Commission. Recently, the Commission also alleged that Altice completed its acquisition of PT Portugal prior to clearance (see VBB on Competition Law, Volume 2017, No. 7, available at www.vbb.com). The three cases are only at a preliminary stage and the Commission's final decision on the alleged procedural violations will not invalidate the merger approval in any case.
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