standstill obligation
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European Court of Justice Provides Guidance on Scope of the Standstill Obligation Enshrined in the EU Merger Regulation

Pursuant to the EU merger control rules, a transaction that falls within the purview of the EU Merger Regulation (EUMR) must be notified to the European Commission (Commission) in advance (Article 4(1) EUMR), and must not be implemented until cleared by the Commission, known as the “standstill” obligation (Article 7[1] EUMR). A principal rationale behind the standstill obligation is to prevent the potentially negative impact of transactions on the market, pending the outcome of the Commission’s investigation. While the standstill obligation represents a clear-cut rule, it can often be a significant challenge for businesses to apply in practice. Failure to get it right, however, can result in draconian penalties. Indeed, the Commission’s recent €124.5 million fine on Altice, which comes in the wake of a spate of enforcement actions in this arena, bears testimony to an increasingly hard stance against companies flouting the notification requirement/standstill...

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Beware of “Gun Jumping”: EU Court Upholds EUR 20 Million Fine Imposed On Norwegian Seafood Company

Between 2012 and 2013, Marine Harvest ASA (“Marine Harvest”), a Norwegian seafood company, acquired Morpol ASA (“Morpol”), a Norwegian producer and processor of salmon. Marine Harvest notified the transaction to the European Commission under the European Union’s Merger Regulation (“EUMR”), but implemented it prior to the European Commission having granted clearance. In 2014, the European Commission imposed a EUR 20 million fine on Marine Harvest for “jumping the gun”. On 26 October 2017, the General Court of the European Union (“General Court”) confirmed the European Commission’s decision (“Decision”). WHAT HAPPENED: On 14 December 2012, Marine Harvest entered into a share and purchase agreement (“SPA”) with companies owned by Jerzy Malek, the founder and former CEO of Morpol. Under the SPA, Marine Harvest acquired 48.5% of the shares in Morpol (“Initial Transaction”). The Initial Transaction was closed on 18 December 2012. On 15 January 2013, Marine Harvest...

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