Out-Law News | 24 Jul 2014 | 3:27 pm | 1 min. read
The European Commission said Marine Harvest breached the EU's Merger Regulation when it completed its acquisition of a 48.5% stake in rival business Morpol in December 2012 without first notifying the Commission of its plans to do so.
"The case shows starkly the potential costs for businesses if they fail to assess whether they need to obtain merger approval before proceeding with a corporate transaction," competition law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said. "An obligation to pre-notify the European Commission of a proposed merger and obtain its approval before completion generally arises when certain turnover thresholds are met and the acquiring company would obtain 'decisive influence' over another business."
"This case highlights again that even the acquisition of a minority shareholding can trigger the notification obligations and the risks of completing a deal without obtaining merger approval, where needed, from the European Commission. There has also been an increase in the frequency with which fines are imposed for gun-jumping in breach of national merger control regimes. Similar rules apply to corporate joint ventures," he said.
Marine Harvest formally notified the Commission of its plans to acquire full ownership of Morpol in August 2013 and the Commission approved the transaction the following month after Marine Harvest offered to divest most of Morpol's salmon farming activities in Scotland to address the Commission's competition concerns.