Jens Steger – Warning Shot from Brussels, European Commission Strengthens Gun Jumping Enforcement
Jens Steger was interviewed by prominent German newspaper Food-Magazine as an authority on European antitrust law regarding the merger of two leading Norwegian fish farmers in 2013. On July 23, 2014, the European Commission imposed a fine of EUR 20 million (US $ 26.9 million) on Marine Harvest, the world's largest fish farmer and processor, for acquiring its rival Morpol, listed on the Oslo stock exchange, without having received prior authorization under EU Merger Regulation.
Under the EU Merger Regulation 139/2004, mergers and acquisitions that meet the turnover thresholds of the Regulation must be notified to and authorized by the Commission before they are implemented, also known as the so-called ‘standstill obligation’. Under EU rules, companies can buy shares listed on a stock exchange prior to obtaining merger control clearance for the acquisition, as long as the acquirer doesn’t exercise the voting rights attached to the stock. In this transaction, Marine Harvest first purchased the 48.5% block of shares from a single seller; due to applicable EU law, the above does not apply in such a constellation. Following that 48.5% share purchase, the company launched a compulsory public offer for the remaining shares of Morpol. The deal was filed with the European Commission for EU merger approval in August 2013 and was cleared- subject to asset divestitures - in September 2013.
Gun jumping is a global issue, and antitrust watchdogs around the world are developing an appetite to investigate and prosecute companies for failing to notify reportable transactions or for implementing a notified transaction in breach of ‘standstill obligations.' The Strengthening of the Commission’s merger control practice has a long history. It had begun with its decision of February 18, 1998 in the case Samsung/AST where the Commission - for the first time ever -fined a company with EUR 33.000 ECU due to ‘gun jumping’. The first fine ever due to ‘gun jumping’ after the legislative amendment of the EU Merger Control Regulation in 2004 hit Electrabel with EUR 20 million (US $ 26.9 million). The decision has been recently confirmed by the Court of Justice of the European Union (decision of July 3, 2013, C-84/13 P).