EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
2.14 Exceptions to Suspensive Effect Parties may only implement a transaction with an EU dimension before it has received clearance if one of the following two limited exceptions is met. Exception for Public Bids Under Article 7 (2) of the EUMR, transactions involving a public bid or a series of transactions in publicly trad - ed securities, in which control is acquired from various sellers, are exempted from the standstill requirement provided that: • the concentration is notified to the Commission without delay; and • the acquirer does not exercise the voting rights attached to the securities in question (or does so only to preserve the full value of its investments pursuant to a derogation granted by the Commis - sion). Exception by Reasoned Request Under Article 7 (3) of the EUMR, parties may obtain a derogation from the standstill requirement by submit - ting a reasoned request to the Commission. In prac - tice, the Commission grants such derogations only exceptionally, where the transaction clearly does not threaten competition and where one of the parties (typically the target) would suffer serious economic harm (eg, bankruptcy) if the transaction were not allowed to proceed. 2.15 Circumstances Where Implementation Before Clearance Is Permitted Other than the exceptions noted in 2.14 Exceptions to Suspensive Effect , there are no circumstances in which implementation is permitted before clearance has been received. In particular, the Commission does not permit a trans - action to close in other jurisdictions pending EU clear - ance, regardless of whether the EU business could be ring-fenced or held separately.
dimension to suspend implementation until they have received clearance. Definition of Implementation The Court of Justice clarified the meaning of “imple - mentation” in Ernst & Young / KPMG Denmark (2018). Actions taken in anticipation of a merger (eg, the tar - get severing legal ties with its parent company) do not constitute implementation of the transaction, even if such actions would not have occurred had it not been for the merger and they are irreversible and have an effect on the market. Rather, implementation in the sense of Article 7 of the EUMR concerns steps that contribute to a lasting change in control of an under - taking. Multi-Step Transactions Transactions achieved through multiple steps can constitute part of the same notifiable concentration, where these steps are interdependent (ie, legally or de facto linked by condition) and control is ultimately acquired by the same undertaking(s). Under Article 5 (2) of the EUMR, two or more transactions between the same two parties within a two-year period will be considered part of the same concentration for turno - ver calculation purposes (preventing parties from evading merger control by splitting transactions into smaller deals). Any multi-step concentrations must receive clearance before the first step is implemented. 2.13 Penalties for the Implementation of a Transaction Before Clearance The Commission may impose fines of up to 10% of the parties’ aggregate worldwide turnover for imple - menting a concentration with an EU dimension before receiving clearance (see 2.2 Failure to Notify ). If the Commission determines that a concentration with an EU dimension was implemented without receiving clearance, it can order interim measures under Article 8 (5) of the EUMR to restore or maintain conditions of effective competition pending a review of the transaction. If the Commission then issues a decision prohibiting the transaction (see 4.1 Sub- stantive Test ), it may order the parties to dissolve the concentration or to take other restorative measures to remedy the competitive situation.
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