Yesterday, the EU’s General Court added clarity to an aspect of EU merger control that can be very contentious: How much time do national regulators have to refer a transaction to the European Commission for review? The case – Brasserie Nationale and Munhowen v. Commission (T-289/24) – concerned the indirect acquisition of Boissons Heintz by Brasserie Nationale, a deal that did not require merger control filings anywhere in the EU, but that was nonetheless pulled in by the Commission via a so-called Article 22 referral made by the Luxembourg antitrust regulator.
The judgment (so far only available in French) is an interesting read for antitrust practitioners, not just with regard to its outcome (the applicants lost), but for what it says on the communication that triggers the deadline for a national regulator to refer a transaction to the Commission under Art. 22 of the EU Merger Control Regulation – and the uncertainty that continues to surround this.
Background: A deal below the thresholds
The transaction involved Brasserie Nationale acquiring full control of Boissons Heintz, a Luxembourg-based beverage distributor. The deal did not meet the merger control thresholds in any EU Member State or at EU-level.
Crucially, Luxembourg itself has no national merger control regime. The parties had nevertheless informed Luxembourg’s competition regulator (LCA) about the intended transaction in December 2023, and a meeting between the parties and the LCA took place on 10 January 2024.
On 17 January 2024, third parties provided information about the transaction to the LCA and ultimately a third party urged the LCA to refer the transaction to the Commission for review under Art. 22. The LCA did so on 7 February 2024, and the Commission accepted the referral on 14 March 2024. Brasserie Nationale challenged the Commission’s decision, inter alia arguing that the referral was out of time.
The legal crux: What triggers the referral deadline?
Under Art. 22 (well known since the Illumina/Grail saga), a Member State may request a referral of a concentration that does not require a filing to the Commission but affects trade between Member States and threatens to significantly affect competition. If no national merger control filing is required, the request must be made within 15 working days of the date on which the transaction was “made known” to the respective Member State. But what counts as “made known”?
In front of the General Court, the parties argued that the LCA had been aware of the deal as early as 10 January 2024, following the meeting with the parties. The Commission, however, considered 17 January 2024 – the date on which third parties submitted substantive information on the transaction – as the earliest point at which the LCA had sufficient information to assess the deal.
The General Court sided with the Commission on this.
The General Court’s reasoning: Active and sufficient communication
The General Court held that the 15-day clock starts only when the Member State receives sufficient information to conduct a preliminary assessment of whether the Art. 22 criteria are met. This must be an active transmission of information; mere awareness or press coverage is not enough.
This means that parties to a transaction can themselves trigger the deadline, but only if they provide sufficient detail – whatever detail is deemed “sufficient”. Otherwise, the deadline to make a referral may not start until a third party or the regulator itself gathers the necessary facts. In this framework, the judgment confirms that third-party complaints can trigger the deadline.
Illumina/Grail: Something different?
Many readers will be aware of the Illumina/Grail ruling in 2024 in which the EU’s Court of Justice held that referrals cannot be made to the Commission just by Member States that did not have jurisdiction to review a transaction in the first place.
One might wonder how that aligns with the case at hand, which was also not notifiable anywhere in the EU. The crucial difference is that the Member State referring the case – Luxembourg – does not have a merger control regime. Such Member States can still be the first to refer cases to the Commission under Art. 22.
Implications for M&A strategy: Legal uncertainty persists
While the judgment provides clarity on referrals, it also underscores a strategic dilemma for deal parties in non-notifiable transactions:
- Should they voluntarily inform the regulator in Luxembourg to start the referral deadline clock?
- Or should stay silent at the risk of a late-stage referral?
The General Court’s answer might seem pragmatic: If you want certainty, communicate actively and sufficiently. But this creates a quasi-notification obligation in EU Member States without a merger control regime. And it leaves open what is “sufficient” in individual cases.
Luxembourg might be the only EU Member State without a merger control regime, but one should not mistake this as a pure Luxembourg issue: The regulator in Luxembourg would be able to refer any non-notifiable transaction to the Commission which would threaten to significantly affect competition within Luxembourg. One could argue that to also be the case for any deal threatening to significantly affect competition in markets that are (at least) EU-wide, like many innovation markets in healthcare/pharma and tech. In those cases, referrals from Luxembourg could serve as an “extra tool”, enabling the Commission to effectively get around the Illumina/Grail-judgement.
A cautionary tale for dealmakers
On substance, more than a year after the Commission accepted to review the Brasserie Nationale-transaction, the merger control process is still ongoing. The parties have offered commitments to the regulator to address concerns, and the provisional review deadline is now 17 July 2025.
The Brasserie Nationale case is a cautionary tale for companies engaging in transactions that could spark regulatory interest and are not notifiable in the EU. Three key takeaways:
- Silence can be risky: Absent pro-active engagement, cases can be brought to the Commission even after a while.
- Communication must be substantive: A vague heads-up will not suffice to get legal certainty early on.
- Third parties matter: Complainants can lead to referrals and merger control reviews.
In the end, the judgment might even prompt more companies to proactively engage with the regulator in Luxembourg. The 15 permanent staff at the regulator (according to its 2024 annual report) might want to brace for more inbox traffic…
Photo by Towfiqu barbhuiya on Unsplash
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