The Italian Competition Authority opens a monitoring procedure against the parties to a merger insurance

By Article 19 of the Italian Competition Act n. 287/1990 the Italian Competition Authority (ICA) is empowered to open a monitoring procedure against the parties to a merger that has been conditionally cleared to verify the parties’ compliance with the obligations imposed on them in the authorization decision. If the ICA establishes that the parties breached those obligations, it has to fine them. Indeed, according to the case law developed in the application of Article 19 failure in correctly implementing the remedies in conditional clearance decisions has been equated to implement a prohibited merger.
With a decision made on 19 June 2012 the (ICA) conditionally cleared the Unipol acquisition of Premafin (case C11524 Unipol/Fonsai). In order to deal with the competition problems that the proposed transaction would create in many insurance markets, the ICA imposed on Unipol the obligation to sell a number of assets. And In January 2013 the ICA extended the deadline by which Unipol had to put into practice the above divestment remedy to 19 December 2013.
On 20 December 2013 Unipol communicated to the ICA a third party proposed a binding offer for the assets to be divested that eventually it did not accept. One month later, in January 2014, Unipol reported that it had received an offer from another potential buyer and that it was ready to start negotiations on a exclusive basis with it. Therefore, given that at the expiry of extended deadline Unipol did not enter into any sale contract having as object the assets to divest, the ICA opened a monitoring procedure pursuant to Article 19 of the Competition Act n. 287/1990.
Was the failure to divest the assets imputable to Unipol? The question whether the merging parties were liable for breaching a divestiture remedy was already examined by the ICA in Banca Intesa/San Paolo IMI (case C8027B; for a comment see here). In Unipol/Fonsai, considering conducts of the parties and the other facts of the case, the ICA took the preliminary view that Unipol was to blame for the failure to timely divest the assets. Indeed, the ICA invited many times Unipol to complete the divestiture process and made it clear that the deadline of 19 December could not be further extended. More importantly, Unipol turned down the only one offer received by that deadline for reasons undisclosed in the ICA decision in spite of the ICA request to enter into a sale contract with that offeror.
In conclusion, what Unipol/Fonsai seems to indicate is the stringent approach of the ICA in enforcing the obligations undertaken by the parties in conditional clearance merger decisions.  

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