EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
Multi-Step Transactions Transactions achieved through multiple steps can constitute part of the same notifiable con - centration, where these steps are interdepend - ent (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 consid - ered part of the same concentration for turnover calculation purposes (preventing parties from evading merger control by splitting transactions into smaller deals). Any multi-step concentra - tions 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 implementing a concentration with an EU dimen - sion before receiving clearance (see 2.2 Failure to Notify ). If the Commission determines that a concen - tration 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 com - petition pending a review of the transaction. If the Commission then issues a decision prohib - iting the transaction (see 4.1 Substantive Test ), it may order the parties to dissolve the concen - tration or to take other restorative measures to remedy the competitive situation. 2.14 Exceptions to Suspensive Effect Parties may only implement a transaction with an EU dimension before it has received clear - ance if one of the following two limited excep - tions 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 traded securities, in which control is acquired from various sellers, are exempted from the standstill requirement provided that: • the concentration is notified to the Commis - sion 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 Commission). Exception by Reasoned Request Under Article 7 (3) of the EUMR, parties may obtain a derogation from the standstill require - ment by submitting a reasoned request to the Commission. In practice, the Commission grants such derogations only exceptionally, where the transaction clearly does not threaten competi - tion 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 Excep- tions to Suspensive Effect , there are no circum - stances in which implementation is permitted before clearance has been received. In particular, the Commission does not permit a transaction to close in other jurisdictions pend - ing EU clearance, regardless of whether the EU business could be ring-fenced or held sepa - rately.
194 CHAMBERS.COM
Powered by FlippingBook