The Italian Competition Authority will be investigating into an unnotified concentration between two port terminal operators

An agreement concluded by two port terminal operators, pursuant a mutual exchange of shares, has been alleged by the Italian Competition Authority (ICA) to constitute a concentration for the purpose of Act 2897/1990. The ICA has then opened an investigation into the agreement to verify whether the party has infringed the obligation to notify a concentration to the ICA before implementing it (Case C10086, PSA Europe-Gruppo Investimenti Portuali/Seber-Sinport). By a communication received by the ICA on 28 July 2008, the parties informed that by a contract signed on 15 July:
• PSA Europe (PSA), which fully owned the terminal operator Sinport, bought a 40% stake in Seber, a terminal operator until then fully owned by Gruppo Investimenti Portuali or GIP;
• GIP, in turn, bought a 40% stake in Seber.
The parties have declared that the transaction has been consummated on 28 July 2008, by result of which now PSA has a 60% and 40% stake in Sinport and Seber, respectively and GIP has a 60% and 40% stake in Seber and Sinport, respectively.
Upon the basis of the information provided for by the parties, following a request of the ICA, the ICA believes that with the above transaction PSA and GIP has acquired a joint control of Seber and Sinport because:
• According to the corporate governance rules of Seber and Sinport, the minority shareholders has a veto power over the decisions concerning port concessions. New concessions are of vital importance for terminal operators, as they require substantial investments, thereby influencing the activities of terminal operators;
• Converging interests pursued by the parties, as indicated by the same shareholdings being transferred at the same time, with the result that a party is unlikely to vote a decision harming interests of the other;
• Finally, the PSA and GIP acquisition of joint control of Sinport and Seber is a single transaction as it occurred with the same contract concluded by the same entities at the same time.
It is worthwhile saying that the ICA can penalize parties to an unnotified concentration up to 1% of the turnover they generated the year before the concentration (art. 19 of the act 287/1990).
As a remainder for the importance to comply with obligation to notify and standstill obligations, one may have a look at a decision of the European Commission by which it imposed a € 20 million on Electrabel for acquiring control of Compagnie Nationale du Rhône absent Commission approval.
Importantly, the Commission penalized Electrabel only for consummating the transaction before the Commission adjudicated on it. Quite ironically, the concentration was found to not create any competition problem and was accordingly cleared (case M4994).

Comments

Post a Comment

Popular posts from this blog

Aspen: The Italian Competition Authority fines a generic manufacturer of drugs for excessive pricing

By the decision made on 29 September 2016 in Aspen [i] , the Italian Competition Authority (ICA) has imposed a fine of more than EUR 5 million on the Aspen group (Aspen), a South African manufacturer of generic drugs. Aspen violated Article 102 TFEU by imposing excessive prices for the supply of the so-called ‘Cosmos drugs’. These drugs included Leukeran, Alkeran, Purinethol and Tioguanine, which included the active principles of chlorambucil, melphalan, mercaptopurine and tioguanine, respectively. All these drugs were used to treat cancer pathologies and included in a wider package of pharmaceutical products, whose marketing rights had been purchased by Aspen from the originator GlaxoSmithKline (GSK) in 2009. Aspen had a dominant position in the relevant product markets for the commercialization of anti-cancer drugs manufactured using the active principles of alkeran, leukeran, purinethol and tioguanine. It had the only one market authorization for the sale of drugs and potential ...
Read more

Geographical allocation of turnover in aviation mergers: What the European Commission recently hold

The European Merger Control Regulation (ECMR) stipulates that only concentrations with a European dimension fall within the regulatory jurisdiction of the European Commission to review. A concentration is presumed to have such a dimension when it meets the financial threshold in Article 1 of the ECMR. To this end, it is necessary to calculate the turnover generated by the merging parties within the Community or in one or more member states. However, the geographical allocation of the turnover required by Article 1 for the purpose to establish the Commission’s jurisdiction can be a tricky issue in case of mergers between undertakings with a cross-border activity such airliners. In fact, the activities of airlines span several countries as they typically operate flights and sell tickets in many national markets. Recently, the Commission has dealt with the issue at length in the Ryanair/Aer Lingus case. It identified three possible methodologies for geographical allocation of turnover: -...
Read more

The European Commission unconditionally clears the Facebook/WhatsApp merger

By a Phase I decision the Commission unconditionally approved the Facebook $ 19 billion acquisition of WhatsApp ( Case No COMP/M.7217,Facebook/WhatsApp) . The Commission was required by the parties to review the transaction by means of a reasoned submission filed on the basis of Article 4(5) of the EU Merger Regulation. Indeed, the merger was not a concentration with EU dimension within the meaning of Article 1 EUMR falling within the Commission jurisdiction, since the EU turnover of WhatsApp in 2013 failed to met the financial thresholds in that provision. The Commission identified three relevant product markets affected by the concentration. It restrained the first relevant market, the market for consumer communication services, to the communication apps for smartphones, because WhatsApp was available only for this device. Following its approach in Microsoft/Skype (Case M.6281), upheld by the General Court in the case T-79/12, Cisco Systems and Messagenet v Commission, the Com...
Read more