On 31 March 2014, the Commission issued a Statement of Objections to Marine Harvest ASA ("Marine Harvest") for implementing a transaction prior to having obtained the required clearance from the Commission under the EU merger control rules. Whilst not all details of the case are available at this stage of the procedure, it is worthwhile making some preliminary observations given that violations of the stand-still obligation (sometimes referred to as "gun jumping") are rarely straightforward and the Commission has proven to nonetheless vigorously enforce this rule.
On 9 August 2013, Marine Harvest notified its planned acquisition of control over competitor Morpol, listed on the Oslo stock exchange, obtaining clearance from the Commission subject to conditions on 30 September 2013. However, the Commission considered that by acquiring a 48.5% stake in Morpol on 18 December 2012, Marine Harvest already had taken control over Morpol. According to the Commission, the transaction was implemented only four days after it was signed, that is, eight months before the notification to the Commission and ten months before the Commission cleared the transaction. Marine Harvest, however, had specified in its notification form that following its purchase of the 48.5% stake it would not exercise de facto or de jure control over the target pending approval by the Commission. In any event, the Commission has now taken the preliminary view that as a result of the purchase of the 48.5% stake, Marine Harvest has implemented the acquisition of Morpol prior to its notification and clearance by the Commission, in breach of Articles 4(1) and 7(1) of the EU Merger Regulation 139/2004.
Preliminary words of caution to prevent “gun jumping”
There are diverging rules concerning the stand-still obligation for transactions with a target listed at a stock exchange. The EU Merger Regulation includes a specific regime for transactions concerning a listed target (Article 7(2)):
The general stand-still obligation] shall not prevent the implementation of a public bid or of a series of transactions in securities including those convertible into other securities admitted to trading on a market such as a stock exchange, by which control [...] is acquired from various sellers, provided that:
(a) the concentration is notified to the Commission [...] without delay; and
(b) the acquirer does not exercise the voting rights attached to the securities in question or does so only to maintain the full value of its investments based on a derogation granted by the Commission [...].
In view of Marine Harvest’s explicit comment that it would not exercise de facto or de jure control over the target pending approval by the Commission, it appears that it considered its actions to be covered by the provision included above. Such assumption may have led it to believe that its purchase of the 48.5% stake could take place without prior approval. If it indeed acted on this assumption, it appears to have overlooked that the latter transaction did not qualify as “a public bid” or as “a series of transactions” within the meaning of the cited provision, but rather a single purchase of a block of shares. Whilst only the fining decision can confirm this reasoning, this issue may be at the heart of the Commission’s case.
In addition, the acquisition of minority stakes may qualify as “control” triggering an obligation to obtain clearance. Both in the context of transactions with “private” companies and those that are listed, obtaining a minority stake may result in de facto or de jure control over the target in violation of the stand-still obligation. It is noteworthy that the Commission has imposed a EUR 20 million fine on Electrabel for failure to notify a transaction providing it with (only) a minority stake in the target that according to the Commission resulted in control. The General Court upheld this fine at first instance, see T-332/09 (appeal to the Court of Justice is pending, see C-84/13 P).