It is said that things slow down over the summer. However, for friends of European merger control, there are several new developments that make you sit up and take notice. These cases concern merger control evergreens like gun-jumping and merger control jurisdiction.
A potential gun jumping case…
About a month ago, the European Commission announced that it had opened a formal investigation into gun-jumping and breach of clearance conditions against Vivendi. The underlying case goes back a little. At the beginning of 2022, Vivendi made a public bid to acquire the French media and publishing giant Lagardere. The main shareholder of Vivendi is the Bolloré Group, which also owns Canal+.
The transaction was notified to the European Commission in October 2022 and was conditionally cleared in June 2023, following a lengthy Phase II investigation. The commitments included the full divestment of Vivendi’s publishing business, Editis, as well as the sale of the target’s celebrity press magazine, Gala (the French version of Gala was acquired from German Gruner + Jahr only in 2021). The commitments also included a so-called upfront buyer provision, requiring approval of the future buyer from the European Commission before the main deal can be closed.
So, what caused the European Commission to start an investigation shortly after clearing the deal? Allegedly, the investigation was triggered because the Bolloré Group interfered in the ordinary course of business of certain newspapers, including Paris Match, and radio stations owned by Lagardere. Such interference before closing is viewed critically by the European Commission and other antitrust regulators. Separately, the European Commission seems to be of the opinion that Vivendi is not complying with the commitments described above.
It will be interesting to see how the European Commission deals with this intriguing case. Given the latest European Commission record fine for gun jumping in the Illumina and Grail transaction (see our post here), there could be much at stake.
…that leads us to the question of merger control jurisdiction …
Speaking of Illumina and Grail, here is a quick reminder: In September 2020, the European Commission announced that it would start accepting referrals from Member States under Art. 22 EUMR, irrespective of whether the respective national regulators had the power to review a transaction themselves.
This approach was confirmed by the EU General Court in July 2022 (see our post here). The Illumina/Grail transaction was the first where the new policy was applied. The European Commission eventually prohibited the transaction and fined Illumina and Grail for completing it anyway.
It took about a year after the court decision for the European Commission to now take on not one but two new cases that also did not require notification anywhere in the EU:
Just last Friday, the European Commission announced that it had accepted the requests submitted by 15 (yes, really that many) EU Member States to review the proposed acquisition of Autotalks, an Israeli semiconductor manufacturer specialized in so-called V2X semiconductors, by Qualcomm. The European Commission had invited Member States to make a referral request. Both companies produce V2X semiconductors which are considered key, for example, for the deployment of autonomous vehicles, and against that background it is likely that the European Commission will closely scrutinize the deal.
Only three days later, the European Commission made public that it had accepted the requests submitted by three EU Member States and one EFTA Member State to assess the proposed acquisition of Nasdaq’s European power trading and clearing business by European Energy Exchange AG. There are concerns that the deal leads to the combination of the only two providers of services facilitating the on-exchange trading and subsequent clearing of Nordic power contracts, endangering stable and predictable energy prices.
Both Qualcomm and Energy Exchange AG will now have to submit merger notifications to the European Commission.
…and some aspects to be noted going forward!
There are five key takeaways which stakeholders should consider going forward:
- Gun jumping remains in the focus of regulators, and the European Commission is ready to take action where it deems that to be required.
- The European Commission apparently uses the tailwind of the Illumina/Grail judgement to “call in” transactions for review and many Member States are willing to act accordingly (but for the German Bundeskartellamt, which is of the opinion that is has no right to refer cases which are not notifiable in Germany).
- With a view to the three “new” Art. 22 EUMR cases the European Commission has taken up so far, it is striking that the industries directly or indirectly affected (genetic engineering, semiconductors and energy) are those that are often also at the center of both the public debate and foreign investment control.
- At the same time, when the European Commission announced its new policy on Art. 22 EUMR, the general perception was that this would mainly be relevant for tech, biotech and pharma deals. The two latest cases show that the interest of the regulator goes much further. All businesses should therefore take into account the risk of an Art. 22 EUMR referral for their transactions.
- As for tech: Art. 14 DMA foresees that gatekeepers will have to inform the European Commission about transactions involving another provider of “core platform services or any other services in the digital sector”. This rule may, of course, be a gateway for the European Commission to motivate Member States to ask the European Commission to examine such transactions.
Photo by Peter Lawrence on Unsplash
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