Of false starts and other often unexpected obstacles in M&A transaction-which also remains important in the crisis
Gun Jumping is still the focus of the antitrust authorities. The recent decision -making practice makes it clear that the European Commission and many national antitrust authorities, most recently in Austria, are also willing to take significant measures to enforce the prohibition of enforcement. The decisions show that companies should take the merger control and the associated ban on enforcement seriously under all circumstances - even if it is difficult to convey in crisis situations, such as on the verge of bankruptcy.
As is well known, the competent competitive authority checks whether the company merging of effective competition is hindered, provided that the companies involved in the merger exceed certain sales thresholds. In order to be able to check the project with sufficient competitive effects, there is a ban on enforcement for a certain period of time, so that the merger may only be carried out after the deadline and/or approval of the competition authority. A violation of the ban on enforcement (so -called Gun Jumping) can be punished with considerable fines against the companies involved.
The union or controller acquisition through a company applies as a merger. Under certain circumstances, however, the takeover of highly qualified employees together with accompanying agreements for the financing and use of property rights (so-called Acqui-Hires: transfer of the competitive potential of special know-how) or the transfer of a shop by the competitor as a noticeable merger.
Austrian
competition authority BWB recently imposed a fine of EUR 1.5 million because the Rewe Group International did not report the takeover of a food trade in a shopping center and still carried out it. As a result, the subsequently registered takeover of the grocery was released. However, the Austrian Supreme Court (OGH) called by REWE confirmed the decision of the BWB on the formal error and almost the punishment almost the punishment for preventive reasons for around EUR 70 million.
Behavioral clauses as a gun jumping
also possible in various other decisions that are punished in various other decisions, violations of the ban on enforcement. At the beginning of the year, the US Department of Justice (DOJ) had completed a record comparison over USD 5.6 million due to such a violation with the companies involved. The background was various behavioral obligations of the target company in the corporate purchase contract, which are said to have violated the ban on enforcement due to the influence of the purchaser: Without the express consent of the acquirers, the target company should not take any measures with a cost volume of more than USD 250,000 and do not carry out any further activities in their core business area without expressly approving them. In return, the purchasers took over the financial responsibility if the target company may not meet customer requirements.
In the past, the Federal Cartel Office has pursued various allegations by Gun Jumping. As far as can be seen, it has so far been targeting such drastic fines as at European level or at (EU) abroad.
When are exceptions to the ban on enforcement in the crisis?
The merger control and the associated ban on enforcement applies - under the corresponding requirements - also in crisis situations as in the case of the impending bankruptcy of the target company. There are opportunities to apply for an exception to the ban on enforcement. However, the requirements are high. The European Commission can only grant an exception according to Art. 7 Para. 3 FKVO if two conditions are met:
Serious risk of damage: Waiting the approval must bring considerable disadvantages for those involved or third parties.
No prima facial concerns: The transaction must not raise competition law concerns at first glance.
Even if these conditions are met, the Commission usually limits the exception to the most necessary steps to minimize the damage; The entire transaction must not be carried out automatically.
A look at the application practice also shows that the European Commission, but also national competitive authorities such as the Federal Cartel Office, have only given exceptional permits in the past due to extraordinary circumstances. Since 2004, only 52 approved permits according to Art. 7 (3) FKVO have been listed on the EU Commission website.
Conclusion
The fusion control with its usually formalist acknowledgment criteria takes effect more frequently and also early than in some cases. This can be underestimated not least in economically dramatically tense situations. Even if certain exemptions with a view to the merger control requirements are particularly useful in restructuring situations, an early - formally sufficient - coverage with the challenges in this regard is essential, not least in order to be able to convince the competition authority early enough of the requirement of a corresponding exception. In view of the recent decision -making practice, it cannot be ruled out that the Federal Cartel Office will also take harder sanction measures in the future.
