EU - The European Commission has imposed a fine of €20 million on Norwegian salmon farmer and processor Marine Harvest for acquiring its rival Morpol, without having received prior authorisation under the EU Merger Regulation. However, Marine Harvest believes it has acted in accordance to EU rules and is likely to take the case to the EU courts.
The Commission concluded that Marine Harvest should have been aware of its obligations to notify and await clearance from the Commission before proceeding with the acquisition.
Under the EU Merger Regulation, mergers and acquisitions with an EU dimension (in particular because they meet certain turnover thresholds) must be notified to and authorised by the Commission before they are implemented.
This so-called "standstill obligation" is a cornerstone of the EU merger control system, as it allows the Commission to identify whether the concentration raises competition concerns and, if the companies do not submit commitments that address them, to prohibit the transaction and prevent it from taking place. This prior scrutiny is a key safeguard that protects direct customers and final consumers from the harm that anticompetitive mergers could create – through higher prices, lower product quality, or fewer incentives to innovate.
By acquiring a 48.5 per cent stake in Morpol on 18 December 2012, Marine Harvest had acquired de facto sole control over Morpol. Indeed, the Commission's investigation found that following this transaction Marine Harvest enjoyed a stable majority at the shareholders' meetings, because of the wide dispersion of the remaining shares and previous attendance rates at these meetings.
Marine Harvest implemented the acquisition eight months before the formal notification to the Commission took place, and over nine months before the Commission authorised it, in breach of Articles 4(1) and 7(1) of the EU Merger Regulation.
Commenting on the announcement of the fine, Marine Harvest said it believes that it acted in accordance with the requirements of the exception applying to public takeovers in its acquisition of Morpol and thus disagrees with the Commission on the applicability of a fine.
The take-over of Morpol was structured as an acquisition of the initial shareholding followed by an immediate mandatory offer. Marine Harvest made it clear to both the market and Morpol that no control would be taken before the acquisition had been cleared by the EU.
Marine Harvest notified the Commission immediately following the acquisition and loyally adhered to the principle of not exercising its shareholders rights in Morpol until the Commission had cleared the transaction. The company has also, throughout the period of the Commission's review, cooperated fully with the Commission.
Marine Harvest also noted that the size of the fine appears to deviate significantly from similar cases where fines have been applied by the Commission.
Marine Harvest stated that it will now consider the options available. It appears, however, more likely than not that the decision to fine the company will be referred to the EU courts.
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