Minority Shareholdings

Foreword Minority shareholdings: an overview of EU and national case law

Minority shareholdings are a widespread phenomenon in the economy and there are a variety of reasons why firms buy shares in other companies (e.g., diversification, joint R&D or access to new technologies). Most merger control regimes distinguish between controlling and non-controlling minority shareholdings and will only review transactions when an acquisition leads to a controlling influence over another firm. However, the approach to the concept of control differs by jurisdiction and some countries apply merger review rules to a wider range of transactions, including influence that is not equivalent to control. A small number of countries may even require merger filings in case of share acquisitions of 5-10% and may request detailed information on passive minority investments as part of their review (which in some instances will be challenging or even impossible for merging parties to provide). More recently, there has been a controversial debate as to whether common ownership of minority shareholdings held by institutional investors in competing firms needs to be factored into the substantive merger assessment of competition authorities.

This foreword identifies recent trends and summarises the different approaches across certain key jurisdictions to which minority shareholdings are particularly relevant.

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Kirkland & Ellis (London)
Kirkland & Ellis (London)

Mergers

The Australian Competition Authority investigates acquisition of shares between two financial comparison sites (iSelect / Innovation Holdings)
Australian Competition and Consumer Commission (Canberra)
ACCC to investigate the acquisition of iSelect shares by Compare the Market’s owners* The ACCC is investigating acquisitions by Innovation Holdings Australia Pty Ltd. that would provide it with approximately 35 per cent of the shares of iSelect Limited (ASX: ISU). Innovation Holdings (through (...)

The US FTC starts accepting stakeholder comments for upcoming virtual consultations on proposed amendments to HSR rules
US Federal Trade Commission (FTC) (Washington)
FTC to Hold Virtual Q&A Sessions in November on Proposed Amendments to HSR Rules and Advanced Notice of Proposed HSR Rulemaking* The Federal Trade Commission will host three public Question and Answer sessions as part of its ongoing HSR Rulemaking initiative. These one-hour virtual events (...)

The Romanian Competition Authority approves a transaction through which two banks become shareholders in a provider of integrated cash management services already owned by third competing bank, subject to conditions (BRD / Raiffeisen / CIT One / Banca Comercială Română)
Romanian Competition Council (Bucharest)
The Competition Council Approved the Transaction Through Which BRD and Raiffeisen Enter CIT One Shareholders* The Competition Council approved the transaction through which BRD - Groupe Société Générale SA (BRD) and Raiffeisen Bank SA enter the shareholding of CIT One SRL, together with Banca (...)

The US FTC issues a notice of proposed rulemaking to amend the premerger notification rules that implement the Hart-Scott-Rodino Antitrust Improvements Act
Sheppard Mullin (Los Angeles)
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Sheppard Mullin (Washington)
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Sheppard Mullin (Washington)
Tell Me More – Antitrust Agencies to Demand More Information from Investment Funds* The Federal Trade Commission (“FTC”) recently issued a notice of proposed rulemaking to amend the premerger notification rules (the “Rules”) that implement the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (...)

The US FTC and DoJ seek comments on proposed amendments to HSR rules and advanced notice of proposed HSR rulemaking
US Federal Trade Commission (FTC) (Washington)
FTC and DOJ Seek Comments on Proposed Amendments to HSR Rules and Advanced Notice of Proposed HSR Rulemaking* The Federal Trade Commission, with the concurrence of the Antitrust Division of the U.S. Department of Justice, will publish in the Federal Register a Notice of Proposed Rulemaking and (...)

The US DoJ and FTC seek comments on proposed amendments to HSR rules
McDermott Will & Emery (Washington)
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McDermott Will & Emery (Washington)
What Happened: The FTC and DOJ proposed new Hart–Scott–Rodino (HSR) rules that, if issued in final form, will significantly change HSR practice for Private Equity (PE) companies. The Proposed Rules are subject to comment for 60 days after they are published in the Code of Federal Regulations (...)

The US FTC and DoJ announce proposed changes to the regulations governing when a filing must be made under the HSR Act
Cleary Gottlieb Steen & Hamilton (Washington)
On September 21, 2020, the Federal Trade Commission (FTC) and Department of Justice (DOJ) announced proposed changes to the regulations governing when a filing must be made under the Hart-Scott-Rodino (HSR) Act that would likely significantly expand the filing requirements and increase the HSR (...)

The US DoJ and FTC announce proposed changes to the HSR premerger notification rules and seek public comments
Covington & Burling (Washington)
The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) (the “Agencies”) announced proposed changes to the premerger notification rules (“Rules”) promulgated under the Hart-Scott-Rodino (“HSR”) Act on September 21, 2020. Although the Agencies’ proposals are (...)

The US DoJ requires divestiture in the acquisition of a craft brew alliance (Anheuser-Busch InBev / Craft Brew Alliance)
US Department of Justice - Antitrust Division (Washington)
Justice Department Requires Divestiture In Order For Anheuser-Busch To Acquire Craft Brew Alliance* Divestiture Will Preserve Competition in the Beer Industry in the State of Hawaii The Department of Justice announced today that it is requiring Anheuser-Busch InBev SA/NV (ABI), its (...)

The EFTA Surveillance Authority renews decision requiring disclosure of net short positions of 0.1% and above during the COVID-19 pandemic Free
EFTA Surveillance Authority (Brussels)
ESA renews decision requiring disclosure of net short positions of 0.1% and above* The EFTA Surveillance Authority (ESA) has renewed its decision to temporarily require holders of net short positions in shares traded on a regulated market of the EEA EFTA States to notify the relevant national (...)

The EU Court of Justice rules that a restriction imposed by Italian law on acquisitions in the broadcasting and audiovisual sectors is contrary to EU Law (Vivendi / Mediaset)
Ashurst (Brussels)
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Ashurst (Milan)
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Ashurst (Brussels)
On 3 September 2020, the European Court of Justice ("ECJ") ruled that a restriction imposed by an Italian law on acquisitions in the broadcasting and audiovisual sectors is contrary to the fundamental EU law principle of the freedom of establishment enshrined in Article 49 of the Treaty on the (...)

The UK Competition Authority fines an e-commerce platform for delayed compliance with document request after merger approval (Amazon / Deliveroo)
Van Bael & Bellis (Brussels)
On 8 September 2020, the UK’s Competition and Market Authority (“CMA”) issued a decision fining Amazon for failing to provide 189 documents by the deadline set by the CMA. The document request came during the CMA’s investigation of Amazon’s purchase of a 16% stake in the food-delivery company (...)

The UK Competition Authority clears a Big tech’s 16% investment in an online food delivery company after finding that it will not substantially lessen competition (Amazon / Deliveroo)
United Kingdom’s Competition Authority - CMA (London)
CMA clears Amazon’s 16% investment in Deliveroo* Following an in-depth investigation, the CMA has today cleared Amazon’s 16% investment in Deliveroo after finding that it will not substantially lessen competition. The Competition and Markets Authority (CMA) completed an initial ‘Phase 1’ (...)

The UK Competition Authority clears at phase II an acquisition of a minority shareholding and certain rights in a food delivery company in its first application of “failing firm” defence (Amazon / Deliveroo) Free
CRA International (London)
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CRA International (London)
On 4 August 2020 the CMA cleared Amazon’s proposed minority investment in Deliveroo. Having previously been concerned that the investment could damage competition by discouraging Amazon from re-entering restaurant food delivery in the UK and altering its competitive incentives in respect of (...)

The UK Competition Authority revises its original findings of failing firm defence due to COVID-19 after firm’s improved performance and instead provisionally clears acquisition of 16% of the firm’s stock based on SLC test findings (Amazon / Deliveroo) Free
United Kingdom’s Competition Authority - CMA (London)
CMA revises provisional findings in Amazon/Deliveroo case* The CMA has provisionally cleared Amazon’s 16% investment in Deliveroo, on the basis that it is not likely to result in a substantial lessening of competition. In its initial provisional findings, published in April, the Competition (...)

The Australian Competition Authority continues its investigation into a 19.9% stake airline acquisition and highlights the increased concerns that smaller airlines face due to COVID-19 (Qantas / Alliance Airlines) Free
Australian Competition and Consumer Commission (Canberra)
Investigation into Qantas’s stake in Alliance Airlines continues* The ACCC is continuing to investigate Qantas Airways’ (Qantas) (ASX:QAN) acquisition of a 19.9 per cent stake in Alliance Aviation (Alliance) (ASX:AQZ) during these uncertain times in the aviation industry. Qantas acquired a 19.9 (...)

The UK Competition Authority uses the failing firm defence in a merger between a service provider and a food delivery supplier during the COVID-19 pandemic (Amazon / Deliveroo)
Ashurst (London)
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Ashurst (London)
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Ashurst (London)
While some businesses may choose to delay transactions in light of Covid-19, many transactions will continue, in particular if the target is in financial distress. In such scenarios, the "failing firm defence" may be an available option for obtaining merger control clearance for transactions (...)

The US FTC sues to unwind a cigarette company’s $12.8 billion investment in its competitor in the market for closed-system e-cigarettes (Altria Group / JUUL Labs)
US Federal Trade Commission (FTC) (Washington)
FTC Sues to Unwind Altria’s $12.8 Billion Investment in Competitor JUUL* Today, the Federal Trade Commission filed an administrative complaint alleging that Altria Group, Inc. and JUUL Labs, Inc. entered a series of agreements, including Altria’s acquisition of a 35% stake in JUUL, that (...)

The Indian Competition Authority clears acquisition by automobile manufacturers of small shareholdings in a ride-sharing company (ANI / OLA)
Shardul Amarchand Mangaldas (New Delhi)
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Shardul Amarchand Mangaldas (New Delhi)
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Shardul Amarchand Mangaldas (New Delhi)
The CCI cleared the proposed acquisition by automobile manufacturers Hyundai and Kia of small shareholdings in ride-sharing company ANI Technologies (ANI/OLA) and its electrical vehicles arm, Ola Electric Mobility (OEMPL), together with strategic cooperation in various areas. The CCI (...)

The Ukrainian Competition Authority issues guidelines clarifying the notification of joint ventures
Redcliffe Partners (Kyiv)
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Redcliffe Partners (Kyiv)
ANTIMONOPOLY COMMITTEE OF UKRAINE ISSUED NEW GUIDELINES CLARIFYING THE NOTIFICATION OF JOINT VENTURES: ANTIMONOPOLY COMMITTEE OF UKRAIN / UKRAINIAN COMPETITION AUTHORITY / JOINT VENTURES / MINORITY ACQUISITIONS* On 26 September 2019, the Antimonopoly Committee of Ukraine (the ’AMC’) issued new (...)

The Turkish Competition Authority accepts the transitory nature of joint control status despite a relatively long transition period in the transports market (Kerry Logistics / Asav)
ELIG Gürkaynak Attorneys-at-Law (Istanbul)
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ELIG Gürkaynak Attorneys-at-Law (Istanbul)
This case summary concerns an analysis of the Board’s Kerry Logistics/Asav HoldCo decision, where the Board, by taking into consideration the parties’ intention with regards to the acquisition of sole control, evaluated whether or not to tolerate an interim joint control period that would exceed (...)

The Indian Competition Authority clears a minority shareholdings acquisition in the financial industry after the submission of the merger notification (Kedaara / Ajax)
Shardul Amarchand Mangaldas (New Delhi)
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Shardul Amarchand Mangaldas (New Delhi)
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Shardul Amarchand Mangaldas (New Delhi)
The CCI cleared the acquisition by Kedaara Capital Fund (Kedaara), a private equity fund, of an approximately 7.98% stake in Ajax Engineering (Ajax), a manufacturer of concreting equipment. [1] Since there were no horizontal overlaps or vertical relationships, the CCI concluded that the (...)

The French Competition Authority clears a merger, subject to remedies, in the markets of wine and spirits (Marie Brizard / COFEPP)
French Competition Authority (Paris)
Wine and spirits* The Autorité de la concurrence clears - subject to conditions - the acquisition of the group Marie Brizard On 3 January 2019, the Compagnie Financière Européenne de Prises de Participation (“Cofepp”) notified the Autorité de la concurrence its intention to acquire sole control of (...)

The Indian Competition Authority partially approves acquisition of a logistics company’s shares by a financial investment company (SVF Doorbell / Delhivery Private)
Vaish Associates Advocates (New Delhi)
CCI partly approves acquisition of shareholding in Delhivery Private Ltd by SVF Doorbell* By way of order dated 21.02.2019, the Commission has approved the acquisition of 22.44% shares, as compulsory convertible preference shares, of the total share capital of Delhivery Private Ltd (“DPL”) by (...)

The Indian Competition Authority approves the acquisition of an energy company by investment firms with minor common shareholdings in competing firms (Global Power Solutions / Brookfield Assets Management / Caisse de dépôt et placement du Québec)
Vaish Associates Advocates (New Delhi)
Commission approves acquisition of Global Power Solutions Business of Johnson Control by Brookfield* CCI, by way of order dated 14.02.2019, has approved the acquisition of the Global Power Solutions business(“GPS”) of Johnson Controls International plc (“JCI”) by Brookfield Assets Management Inc. (...)

The Indian Competition Authority clears an investment company’s acquisition of optionally convertible preferential stock in an engineering company (Integral / Toyo Engineering)
Vaish Associates Advocates (New Delhi)
Integral Corporation acquires optionally convertible preferential stock in Toyo engineering Corporation* The Commission, by way of order dated 19.12.2018, has approved the acquisition of optionally convertible preferential stock (without voting rights) of Toyo Engineering Corporation (...)

The Turkish Competition Authority holds that the indirect changes on the shareholding structures of two companies do not constitute concentrations and grants a negative clearance to the transaction (Turkland / Groupmed)
ELIG Gürkaynak Attorneys-at-Law (Istanbul)
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ELIG Gürkaynak Attorneys-at-Law (Istanbul)
The Turkish Competition Board (“ Board ”) resolved that the transaction would not be deemed as a concentration requiring mandatory merger control filing before the Turkish Competition Authority (the “ Authority ”), given that the transaction would result in shifting alliances. To that end, the (...)

The German Government opposes foreign investment in an electrical infrastructure due to security concerns (State Grid Corp / 50Hertz)
McDermott Will & Emery (Paris)
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McDermott Will & Emery (Brussels)
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McDermott Will & Emery (Brussels)
Non-EU inward investors in Germany should be aware of recent developments in German Government policy towards foreign investment in strategic infrastructure and security sensitive areas. Electricity infrastructure is an area that is particularly sensitive for strategic and security (...)

The US FTC files an administrative complaint challenging a proposed acquisition in the market for third-party paid referral services for senior living facilities and enters into a consent decree (Red Venture / Bankrate)
Shearman & Sterling (Washington)
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Shearman & Sterling (Washington)
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Shearman & Sterling (Washington)
This article has been nominated for the 2018 Antitrust Writing Awards. Click here to learn more about the Antitrust Writing Awards. On November 3, 2017, the Federal Trade Commission filed a complaint challenging Red Ventures’ proposed acquisition of Bankrate. The FTC alleged that the deal (...)

The EU Commission conditionally approves an acquisition of de facto sole control over a national incumbent telecommunications company, subject to remedies (Vivendi / Telecom Italia)
DG COMP (Brussels)
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DG COMP (Brussels)
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DG COMP (Brussels)
Vivendi/Telecom Italia - jurisdictional and substantive assessment of minority shareholdings* In a nutshell: The Vivendi/Telecom Italia case raised interesting issues related to minority shareholdings. In relation to jurisdiction, the transaction consisted of the acquisition of (de facto) (...)

The US FTC clears an acquisition between two companies in the energy sector after they agreed to remedy an overlap for the natural gas pipeline (Enbridge / Spectra)
McDermott Will & Emery (Washington)
The Federal Trade Commission (FTC) recently granted US antitrust clearance for Enbridge’s acquisition of Spectra after the parties agreed to behavioral commitments to remedy an overlap for natural gas pipeline transportation from the wellhead in three markets off the coast of Louisiana (Green (...)

The Australian Competition Authority publishes draft media merger guidelines
University of New South Wales (Sydney)
Australian draft media merger guidelines: a review* Background The ACCC released its draft media merger guidelines in August 2016. Given the previous merger guidelines were released in 2006, these drafts outline the first proposed changes in over ten years. Critically these guidelines come in (...)

The Ukrainian Competition Authority adopts a merger regulation
Asters (Kiev)
On 19 August 2016 the new Merger Regulation became effective in Ukraine. It simplifies the merger review procedure in two ways. First, in most cases, the Antimonopoly Committee of Ukraine (AMC) reduces the amount of information required from the parties. Second, the AMC takes measures to (...)

The US DoJ files a complaint against an activist investor before the US District Court for the Northern District of California for violations of the Hart-Scott-Rodino Act (ValueAct)
Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
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Skadden, Arps, Slate, Meagher & Flom (New York)
On April 4, 2016, the U.S. Department of Justice, Antitrust Division (DOJ) led
 a complaint against activist investor ValueAct Capital in California federal court, requesting a $19 million fine for violations of the Hart-Scott-Rodino (HSR) Act’s notifcation provisions . The DOJ’s complaint alleged (...)

The EU Competition Commissioner Margrethe Vestager discusses the possible ways in which the EU merger control system could be refined
Van Bael & Bellis (Brussels)
In a speech delivered in Brussels on 10 March 2016, EU Competition Commissioner Margrethe Vestager discussed possible ways in which the EU merger control system could be refined. She addressed three main topics. First, Ms Vestager said it should be examined as to whether the EU notification (...)

The Indian Competition Authority clears an acquisition of minority shareholdings in the insurance sector (FAL / ICICI Lombard)
Shardul Amarchand Mangaldas (Mumbai)
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Economic Laws Practice (Mumbai)
Introduction A notification was filed by FAL Corporation (“FAL”) under Section 6(2) of the Competition Act, 2002 (“Act”), pursuant to execution of an agreement amending the Joint Venture Agreement entered between FAL and ICICI Bank Limited (“ICICI”), in relation to its acquisition of additional 9% (...)

The Indian Competition Authority clears an acquisition of minority shareholdings in the insurance sector (FAL / ICICI Lombard)
Shardul Amarchand Mangaldas (Mumbai)
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Economic Laws Practice (Mumbai)
Introduction A notification was filed by FAL Corporation (“FAL”) under Section 6(2) of the Competition Act, 2002 (“Act”), pursuant to execution of an agreement amending the Joint Venture Agreement entered between FAL and ICICI Bank Limited (“ICICI”), in relation to its acquisition of additional 9% (...)

The Chinese Competition Authority approves acquisition of additional shares of a Chinese brewery by a competitor (Anheuser-Busch InBev’s / Zhujiang Brewery)
University of Melbourne
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China Competition Bulletin (Beijing)
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Hogan Lovells (Beijing)
On 20 August 2015, the MOFCOM approved Anheuser-Busch InBev’s acquisition of additional shares in Zhujiang Brewery. After the acquisition, Anheuser-Busch InBev’s interest in Zhujiang Brewery will be increased from 25.62% to 29.99%, but the composition of the board of directors and the supervisory (...)

The Indian Competition Authority directs a company to file a merger notification following several minority stakes acquisitions (Piramal)
Shardul Amarchand Mangaldas (Mumbai)
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Economic Laws Practice (Mumbai)
Introduction The Competition Commission of India (“CCI”) directed Piramal Enterprises Limited (“Piramal”) to file a notice pursuant to Section 20(1) of the Competition Act, 2002 (“Act”), read with Regulation 8 of the Competition Commission of India (Procedure in regard to transaction of business (...)

The UK Court of Appeal upholds the judgment of the Competition Appeal Tribunal requiring an airline to reduce its minority shareholding in a rival airline (Ryanair / Aer Lingus)
United Kingdom’s Competition Authority - CMA (London)
CMA welcomes Court of Appeal Judgment on Ryanair/Aer Lingus* The CMA welcomes today’s judgment by the Court Of Appeal dismissing Ryanair’s challenge on all 3 grounds. The judgment followed an appeal by Ryanair Holdings plc (Ryanair) against an earlier decision made by the Competition Appeal (...)

The EU Commission issues merger reform White Paper regarding minority shareholdings and member state referrals
Skadden, Arps, Slate, Meagher & Flom (Brussels)
,
Skadden, Arps, Slate, Meagher & Flom (Brussels)
,
Skadden, Arps, Slate, Meagher & Flom (Brussels)
This article has been nominated for the 2014 Antitrust Writing Awards. Click here to learn more about the Antitrust Writing Awards. On July 9, 2014, the European Commission published its proposal (White Paper) outlining the approach it intends to adopt with respect to the application of the EU (...)

The EU Commission proposes measures on the review of minority stakes under the Merger Regulation
FTI Consulting (Brussels)
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Dechert (Brussels)
It is more than three and a half years since EU Competition Commissioner Joaquín Almunia first publically admitted that, at the European level, when a transaction involves the acquisition of a minority shareholding, there is “probably an enforcement gap” , and announced that he had instructed DG (...)

The EU Commission publishes a White Paper on the application of merger control rules to the acquisition of non-controlling minority shareholdings to provide a more effective merger control regime
McDermott Will & Emery (Brussels)
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McDermott Will & Emery (Paris)
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Franklin (Paris)
COMMISSION PUBLISHES WHITE PAPER ON MINORITY SHAREHOLDINGS* On 9 July 2014, the EU Commission (Commission) published a White Paper (White Paper) entitled Towards more effective EU merger control. The White Paper sets out the Commission’s current thinking on the application of merger control (...)

The UK Competition Appeal Tribunal dismisses an appeal against divestiture of a minority stake (Ryanair / Aer Lingus)
King’s College (London)
Background of the case Ryanair has been attempting to take over its rival Irish airline Aer Lingus since 2006 when it made its first bid. The COM prohibited the merger but also found it had no power to require Ryanair to divest itself of the minority stake of 25% in Aer Lingus. In the appeal (...)

The UK Competition Appeal Tribunal rules on non-controlling minority shareholding and reduces share to a maximum of 5% (Ryanair)
Queen Mary University (London)
The decision of the Competition Appeal Tribunal (CAT) Ryanair Holdings plc v Competition Commission on 7th March 2014 concerns the anti-competitive effects originated by financial links between competitors. In particular, the decision regards the effects on competition of Ryanair’s (...)

The German Competition Authority clears acquisition by a paid TV service supplier of a minority share in a TV-sports channel (Sky / Sport1 and Con­stan­tin Sport Mar­ke­ting)
German Competition Authority (Bonn)
Merger cleared - Sky may acquire a participation in Sport1* Today the Bundeskartellamt cleared the acquisition of a minority share in the sports channel Sport1 by Sky Deutschland. The transaction also involves the acquisition of a minority share in Constantin Sport Marketing GmbH (CSM) and the (...)

The Lithuanian Competition Authority closes merger investigation pursuant to the divesture of acquired shares by the cosmetics supplier (Fragrances International)
Lithuanian Competition Authority (Vilnius)
Competition council terminates investigation on the actions of Fragrances International* On January 30, the Competition Council (the Council) terminated the investigation on the actions of UAB Fragrances International (Fragrances International) whereby the latter had acquired 49 per cent of (...)

The French Competition Authority clears an acquisition of sole control in the telecommunications sector (SFR / Numéricable)
French Competition Authority (Paris)
Press release published on the official website of the French Competition Authority. The Autorité de la concurrence clears the acquisition of Numéricâble by Altice, its minority shareholder* The Autorité de la concurrence has cleared the acquisition of the Numéricâble group, a cable network (...)

The OECD holds a roundtable on the definition of a transaction for merger control review
OECD - Competition Division (Paris)
This topic was suggested as a follow-up discussion to the Competition Committee Report to the OECD Council on the experiences of member countries under the 2005 OECD Recommendation on Merger Review. The 2005 Recommendation provides that a merger regime’s jurisdictional thresholds should be (...)

Minority Shareholdings: An overview of EU and national case law
Dechert (Brussels)
Minority shareholdings feature routinely in EU antitrust law. While there is no customised regime specific to them, in most respects they have been satisfactorily accommodated within the general rules. The European Commission’s June 2013 consultation document invited views on the utility of (...)

The UK Competition Authority requires an airline to sell down its minority shareholding in its rival company (Ryanair / Aer Lingus)
Dechert (Brussels)
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GE Healthcare (Paris)
1. Introduction This case note provides a summary of the UK competition authorities’ investigation into Ryanair’s 29.82% minority shareholding in its rival Aer Lingus. The long running battle between the two airlines has resulted in more than 20 competition authority and court decisions since (...)

The UK Competition Authority requires an airline to sell most of its minority shareholding in a rival company (Ryanair / Aer Lingus)
Jones Day (London)
Last week the UK Competition Commission (CC) required airline Ryanair to reduce its 29.8% shareholding in rival Aer Lingus to 5 per cent. The CC ruled that Ryanair’s gradual acquisition of its existing minority shareholding (i) created a relevant merger situation and (ii) had led or may be (...)

The EU Commission opens consultations seeking views on possible improvements of the merger regulation, in particular extending its scope to the acquisition of non-controlling minority shareholdings
Baker McKenzie (Brussels)
Minority Report? The EC’s public consultation on minority shareholdings* On 25 June 2013, the European Commission launched a public consultation entitled “Towards more effective EU Merger Control” in which the Commission proposes to (i) expand its powers to review non-controlling minority (...)

The EU Commission proposes significant changes to the merger regulation
Skadden, Arps, Slate, Meagher & Flom (Brussels)
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Skadden, Arps, Slate, Meagher & Flom (Brussels)
On June 20, 2013, the European Commission (Commission) launched a public consultation on a number of significant proposed changes to the EU Merger Regulation (EUMR). The proposed amendments relate to (i) the possible review of non-controlling minority shareholdings under the EUMR; (ii) the EU (...)

The Dutch Competition Authority permits the establishment of a joint venture between undertakings in the healthcare sector and clarifies when under the Competition Act a minority shareholder may exercise joint control over a concentration (Star MDC / Reinier de Graaf Groep)
Netherlands Ministry of Economic Affairs
Introduction On 30 May 2013 the Dutch Authority for Consumers & Markets (Autoriteit Consument & Markt, ACM) issued a decision clearing the establishment of a joint venture by two undertakings in the healthcare sector. The foundations Stichting Star-Medisch Diagnostisch Centrum (Star (...)

The UK Competition Authority requires an airline to sell down its minority shareholding in its rival company (Ryanair / Aer Lingus)
Van Bael & Bellis (Brussels)
On 28 February 2013 (one day after the European Commission blocked Ryanair’s third attempt to acquire Aer Lingus), the UK Competition Commission (“CC”) announced that it will reopen a long-running inquiry into Ryanair’s acquisition of a minority stake in Aer Lingus. This investigation has (...)

The Spanish Competition Authority approves an acquisition subject to remedies regarding crossed-minority stakes in competitors (CaixaBank / Banco de Valencia)
Cuatrecasas (Madrid)
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Cuatrecasas (Madrid)
On December 14, 2012, CaixaBank S.A. (“CaixaBank”) notified the National Competition Commission (“CNC”) of the acquisition of sole control of Banco de Valencia, S.A. (“Banco de Valencia”). The transaction involved two credit entities active mainly in the retail bank market in Spain. On February 28, (...)

The EU Commission prohibits low-cost airline’s third attempt to acquire rival (Ryanair / Aer Lingus)
Van Bael & Bellis (Brussels)
On 27 February 2013, the European Commission prohibited Irish low-cost airline Ryanair’s proposed acquisition of former Irish flag carrier Aer Lingus. Extensive remedy proposals proved insufficient to sway the Commission, which considered the two firms to be each other’s closest – and on (...)

The Hungarian Competition Authority rules on ancillary restraints and provides an overview of its related practice (Waberer / Szemerey)
Lakatos, Köves (Budapest)
On 20 December 2012 the Hungarian Competition Office ("HCO") cleared a concentration between two Hungarian companies active in forwarding and logistics (Waberer’s Logisztika Kft. ("Waberer") as acquirer and Szemerey Transport Zrt. ("Szemerey") as target) and provided a useful summary of the (...)

The UK Court of Appeal holds that the concept “overlapping jurisdictions” is relevant merely to situations where Article 21 ECMR is contingently applicable (Ryanair)
OECD - Competition Division (Paris)
Ryanair v. Competition Commission and Aer Lingus in the Court of Appeal (Civil Division) [2012] CAT 29* Majority and Minority Shareholders Commuting between Dublin, Brussels and London Keeping with this blog’s recent focus on aviation related cases, this post will look into a decision by the (...)

The UK High Court rules that there was no contingent infringement of article 21 of the ECMR when the Competition Authority investigates an acquisition of a minority stake prior to a merger subject to the exclusive control of the EU Commission (Ryanair)
Blackstone Chambers (London)
Anyone for another round? The Court of Appeal’s nuanced approach to the duty of “sincere cooperation”.* The duty of “sincere cooperation” set out in Article 4(3) TEU requires Member States to take appropriate measures to “ensure fulfilment of the obligations arising out of the Treaties or resulting (...)

The UK Court of Appeal rejects a low-cost airline’s appeal of Competition Authority probe (Ryanair / Aer Lingus)
Van Bael & Bellis (Brussels)
On 13 December 2012, the English Court of Appeal (CA) rejected Ryanair’s appeal against a Competition Appeal Tribunal (CAT) judgment allowing the Competition Commission (CC) to review Ryanair’s acquisition of a minority stake in rival airline company Aer Lingus. In August 2012, the CAT (...)

The EU General Court upholds fine imposed on energy corporation for failing to notify a transaction highlighting the importance of compliance with merger control filing requirements (Electrabel)
Herbert Smith Freehills (Brussels)
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Novartis (Basel)
1. Introduction On 12 December 2012 the EU General Court dismissed Electrabel’s appeal against the €20 million fine the European Commission had imposed on it for failing to notify a transaction - the acquisition of a minority shareholding - to the Commission under the EU Merger Regulation (...)

The UK Competition Appeal Tribunal rules on the Competition Authority’s decision to continue an investigation on a merger in the aviation sector (Ryanair / Aer Lingus)
Herbert Smith Freehills (Brussels)
The acquisition of Ryanair’s minority stake in Aer Lingus is currently under investigation by the Competition Commission (CC) under the merger control regime of the Enterprise Act 2002, despite a series of jurisdictional challenges and a potentially conflicting transaction (a renewed bid by (...)

The Italian Competition Authority exerts its jurisdiction on a concentration between two firms owned by the State and conditionally clears it (CDP / Snam)
Giannino SI (Monserrato)
The Italian Competition Authority asserts its jurisdiction on a concentration between two firms owned by the State and conditionally clears it (CDP/Snam) By a decision made on 8 August 2008, the Italian Competition Authority has conditionally cleared the Cassa Depositi e Prestiti (CDP) (...)

The UK Competition Authority investigates the acquisition of Irish low-cost airline’s minority stake in former Irish flag carrier (Ryanair / Aer Lingus)
Herbert Smith Freehills (Brussels)
The acquisition of Ryanair’s minority stake in Aer Lingus is currently under investigation by the Competition Commission (CC) under the merger control regime of the Enterprise Act 2002, despite a series of jurisdictional challenges and a potentially conflicting transaction (a renewed bid by (...)

The UK Competition Authority investigates a transaction above the EU merger regulation turnover thresholds (Ryanair / Aer Lingus)
Norton Rose Fulbright (London)
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Bowmans (Johannesburg)
,
Norton Rose Fullbright (Sydney)
In June this year, Ryanair, the Irish low-cost airline, launched a full takeover bid for Aer Lingus, the airline which has been the country’s national flag carrier. The European Commission is now examining the potential competition effects of that proposed takeover in a full “second-phase” (...)

The Brazilian Parliament adopts merger law, with an increase in filing thresholds and merger regulations
Milbank, Tweed, Hadley & McCloy (New York)
,
Jones Day (Sao Paulo)
,
Jones Day (New York)
On May 29, 2012, Brazil’s New Merger Law entered into force and the Administrative Council for Economic Defense ("CADE") issued Merger Regulations that further define what transactions must be reported and what filing procedures followed in Brazil’s new pre-merger control regime. On May 31, (...)

The Brazilian Parliament enforces a competition act on the merger review developments
Magalhães Nery e Dias (Sao Paulo)
,
Magalhães Nery e Dias (Sao Paulo)
,
Magalhães Nery e Dias (Sao Paulo)
Introduction It has been almost one year since, in May 29, 2012, a new Competition Act (Law 12.529/11) came into force in Brazil, radically altering the country’s antitrust framework. The purpose of the long-awaited new law was to allow the competition regulator (the Administrative Council of (...)

The UK Court of Appeal addresses the issue of the duty of sincere cooperation between national competition authorities and the European institutions in the context of merger control (Ryanair / Aer Lingus)
United Kingdom’s Competition Authority - CMA (London)
Summary In 2012 the low-cost company Ryanair flew twice to the Court of Appeal in the UK, in an attempt to further explore the duty of sincere cooperation between national competition authorities and the European institutions. Ryanair did not get good value for money: at both occasions it was (...)

The Spanish Competition Authority fines companies for gun-jumping based on an unprecedentedly broad concept of control (Gestamp / Essa Bonmor)
Cuatrecasas (Madrid)
,
Philip Morris (Madrid)
On January 30, 2012, the Spanish Competition Commission (Comisión Nacional de la Competencia, “CNC”) imposed fines of €124.400 on two groups in the automotive components sector, Gestamp and Estampaciones Sabadell, for allegedly executing a notifiable concentration without authorization. The CNC (...)

The UK Court of Appeal stays the Competition’s Authority investigation of minority interest between two airlines companies, while the EU Commission reviews the economic importance of minority shareholdings (Ryanair / Aer Lingus)
White & Case (London)
As the European Commission reported its intention to review the economic importance of minority shareholdings in early November this year, the case of Ryanair and Aer Lingus continued its rollercoaster ride of competition authority and court decisions relating to Ryanair’s 29.8% minority (...)

The Chinese MOFCOM publishes a conditional approval of proposed transaction under Anti-Monopoly Law (Penelope / Savio Macchine Tessili)
Jones Day (Beijing)
,
Gibson Dunn (Hong Kong)
,
Jones Day (Beijing)
The Chinese Ministry of Commerce ("MOFCOM") has published a conditional approval of proposed transaction under China’s Anti-Monopoly Law ("AML"). This decision reflects China’s view of the broad reach of the AML’s merger provisions and the lengthy procedure that merging parties can expect. Since (...)

The Chinese MOFCOM conditionally clears the acquisition in the electronic yarn clearers for automatic winders (Penelope / Savio Macchine Tessili)
King & Wood Mallesons (Beijing)
MOFCOM’s 8th Conditional Clearance - Alpha V/Savio Deal* On 31 October 2011, the Ministry of Commerce (MOFCOM) publicly announced the eighth conditional merger clearance since the enactment of the Anti-monopoly Law (AML) in 2008. According to its announcement , MOFCOM cleared the proposed (...)

The Turkish Competition Authority authorizes a joint control acquisition in the sector of manufacture and sale of components and systems for automotive and motor vehicles (Mahle / Behr)
Erdem & Erdem (Istanbul)
The Competition Board (the “Board”) authorized, under Act No. 4054 on the Protection of Competition numbered 4054 (the “Competition Act”) and the Communiqué No: 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board (the “Merger Communiqué”), the (...)

The UK Competition Appeal Tribunal confirms that the Competition Authority is not time-barred from investigating the acquisition of a competitor’s minority shareholding implemented five years previously under UK merger control rules (Ryanair / Aer Lingus)
University of Southampton
On 28 July 2011, the UK Competition Appeal Tribunal (CAT) found that the Office of Fair Trading (OFT) is not out of time to consider referring the acquisition of a minority shareholding by Ryanair Holdings plc (Ryanair) in its competitor, Aer Lingus Group plc (Aer Lingus), to the Competition (...)

The UK Competition Appeal Tribunal upholds the Competition Authority’s jurisdiction to review the acquisition of a minority shareholding in a merger in the airline sector (Ryanair / Aer Lingus)
Nasdaq (Stockholm)
,
Matheson (Dublin)
I. Introduction On 28 July 2011 the Competition Appeal Tribunal (“CAT”) handed down a unanimous judgment, upholding the UK Office of Fair Trading’s (“OFT”) jurisdiction to review Ryanair‘s 29.8% minority shareholding in rival Irish airline Aer Lingus, which the former acquired almost five years ago. (...)

The UK Competition Appeal Tribunal upholds the Competition Authority’s decision that it is "in time" to investigate the acquisition of a minority shareholding in a merger case concerning the air transport sector (Ryanair / Aer Lingus)
Herbert Smith Freehills (Brussels)
All views expressed are strictly personal views of the author. The present case note does not constitute legal advice and should not be relied on as such. The author would like to thank Natalia Sivakumaran, associate at Herbert Smith LLP in London, for her assistance with the preparation of (...)

The US FTC and DoJ announce final rules and revised the Hart-Scott-Rodino pre-merger form
Sheppard Mullin (Washington)
,
Jones Day (Washington DC)
,
Jones Day (Chicago)
In the first substantial change to the U.S. premerger filing requirements since 2005, the Federal Trade Commission and Department of Justice have issued a revised Premerger Notification and Report Form ("HSR Form") and final amendments to the rules governing the information reporting parties (...)

The US FTC issues revised Hart-Scott-Rodino premerger notification rules
Linklaters (New York)
,
Linklaters (Washington)
,
Linklaters (New York)
The U.S. Federal Trade Commission (the “FTC”) has issued final rules (the “Rules”) to amend the requirements of premerger notifications required under the Hart-Scott-Rodino (“HSR”) Act. The Rules, issued July 7, 2011, are described by the FTC as being intended to streamline the HSR filing process. In (...)

The US FTC announces changes to reduce the filing burden and streamline the form parties must file when seeking antitrust clearance of proposed mergers and acquisitions under the HRS Act and the Premerger Notification Rules
Sheppard Mullin (Washington)
New Amendments To Hart-Scott-Rodino Premerger Notification Rules* On July 7, 2011, the Federal Trade Commission announced a final rule amending the Hart-Scott-Rodino Premerger Notification Rules (the "Rules") and the Premerger Notification and Report Form (the "Form") and associated (...)

The Turkish Competition Authority unconditionally authorises the acquisition of an Italian jeweller and luxury goods retailer by a French luxury conglomerate (LVMH / Bulgari)
Erdem & Erdem (Istanbul)
The Competition Board (the “Board”) has unconditionally authorized the acquisition of control of Bulgari S.p.A. (“Bulgari”) by LVMH Moét Hennessy - Louis Vuitton (“LVMH”; “Bulgari” and “LVMH” hereinafter referred to as the “Parties”) since the transaction would not result in creating a dominant position or (...)

The EU Commission examines whether acquisitions of minority shareholdings should be subject to EU merger control
Van Bael & Bellis (Brussels)
In a recent speech, Competition Commissioner Joaquin Almunia said that the European Commission is examining whether acquisitions of minority shareholdings, falling short of an acquisition of control, should be subject to EU merger control. Under the current Merger Regulation, acquisitions of a (...)

The UK Competition Appeal Tribunal receives a claim of the jurisdiction from a leading low-cost airline (Ryanair / Aer Lingus)
Van Bael & Bellis (Brussels)
Irish air carrier Ryanair has recently launched an appeal before the UK Competition Appeal Tribunal (CAT) against a decision of the Office of Fair Trading (OFT) finding that the OFT has jurisdiction under UK merger control law to review Ryanair’s acquisition of a minority stake in competing (...)

The Brazilian Competition Authority vetoes transaction in the industry of concrete services based on a conservative presumption of an economic group by summing minority equity interest in companies with small cross-sharing (Tupi / Polimix)
Madrona Advogados (São Paulo)
The author thanks Natali de Vicente Santos for researching and debating this case law with him, which contributed for this article. I. Summary of the case In this case, the discussion at CADE focused on the corporate relationship between rivals being able to raise anticompetitive effects even (...)

The French Competition Authority clears a merger in the press sector (Le Monde)
French Competition Authority (Paris)
The Autorité de la concurrence authorizes the purchase of the newspaper Le Monde by Messrs. Pierre Bergé, Xavier Niel and Matthieu Pigasse.* The Autorité de la concurrence has just issued a decision in which it authorizes Messrs. Pierre Bergé, Xavier Niel and Matthieu Pigasse to take control of (...)

The EU General Court upholds the Commission’s decision to prohibit a merger between two airlines companies (Ryanair / Aer Lingus)
European Commission (Brussels)
Yes, we can (prohibit) – The Ryanair/Aer Lingus merger before the Court* I. Introduction In two judgments handed down on 6 July 2010, the General Court upheld the Commission’s June 2007 decision to prohibit the planned merger between Ryanair and Aer Lingus (Case T-342/07) and dismissed Aer (...)

The UK Competition Authority considers that large shareholdings do not always mean the ability to influence policy (RREEF / Kelda)
Herbert Smith Freehills (London)
Summary In taking this first stage decision the Office of Fair Trading (OFT) had to decide whether the acquisition of a minority stake in the parent of a water and sewerage company would engage compulsory merger reference requirements, because the parent company of the manager of the acquiring (...)

The French Competition Authority clears, under conditions, a merger in the sugar and spirits sector on Reunion Island (Tereos / Quartier Français)
French Competition Authority (Paris)
The Autorité de la concurrence clears the acquisition of the Quartier Français Group by the Tereos Group, under certain conditions.* The Autorité de la concurrence has carefully examined the Tereos Group’s acquisition of the Quartier Français Group, that is primarily active in the sugar and spirits (...)

The German Federal Court of Justice decides on the compatibility of non-competition clauses to the detriment of minority shareholders with Art. 101 Para. 1 TFEU and Sec. 1 ARC (Gratiszeitung Hallo)
Gleiss Lutz (Munich)
,
Milbank, Tweed, Hadley & McCloy (Munich)
On 23 June 2009, the German Federal Court of Justice overruled three judgments of the Higher Regional Court of Düsseldorf and remitted the cases back for further proceedings. In the joint proceedings before the Federal Court of Justice, the court had to decide whether a non-competition clause to (...)

The German Competition Authority finds “competitively significant influence” arising from the acquisition of less than 14% shareholding in copper company prohibits transaction (A-TEC Industries / Norddeutsche Affinerie)
Van Bael & Bellis (Brussels)
According to a press release of 28 February 2008, the German Federal Cartel Office (FCO) prohibited A-TEC Industries’ acquisition of a 13.75% shareholding in Norddeutsche Affinerie, holding that the transaction created a dominant position on a market for a particular kind of oxygen-free copper (...)

The German Competition Authority prohibits the acquisition of a minority shareholding of 13.75% and orders the divestiture after merger completion (A-TEC Industries / Norddeutsche Affinerie)
Freshfields Bruckhaus Deringer (Berlin)
,
Freshfields Bruckhaus Deringer (Berlin)
On 27 February 2008 the German Federal Cartel Office (FCO) prohibited the acquisition by A-TEC Industries AG (A-TEC), a Vienna-based international industrial group, of 13.75 % of the shares in Norddeutsche Affinerie AG (NA), a publicly listed German manufacturer and recycler of copper. Since (...)

A German Court of Appeals reinforces the application of the de minimis exemption for merger control by constraining the application of the “bundle theory" (Asphaltmischwerke Langenthal)
Fried Frank Harris Shriver & Jacobson (London)
1. Introduction German merger control notification thresholds are extremely low and a large number of transactions are notified to the German Federal Cartel Office (Bundeskartellamt"FCO") every year. For example, 2231 notifications were submitted to the FCO in 2007 . However, a notification is (...)

The French Minister of Economy imposes a moderate fine for failure to notify a merger (SNCF Participations)
Freshfields Bruckhaus Deringer (Paris)
,
Freshfields Bruckhaus Deringer (Paris)
On 28 January 2008 the Minister of Economy (the Minister) imposed a fine of 250,000 euros on SNCF Participations (SNCF P), a subsidiary of the SNCF group, in relation to the failure to notify the acquisition of sole control of Novatrans, a company operating in the market relating to the (...)

The Italian Competition Authority gives conditional clearance to a merger giving rise to one of the largest EU banking group (Unicredit Italiano / Capitalia)
Freshfields Bruckhaus Deringer (Rome)
,
Beckman Coulter (Milan)
On 18 September 2007 the Italian Antitrust Authority (IAA) decided to authorize the merger between Unicredito Italiano S.p.A (also Unicredit) and Capitalia S.p.A. (Capitalia) (collectively as the Parties), subject to a number of structural and behavioural remedies. The transaction, through (...)

The Bulgarian Competition Authority finds that a call option and certain minority shareholder protection rights do not confer control (Novator / Bulgarian Telecommunication Company)
Kinstellar (Sofia)
The Bulgarian Commission for Protection of Competition (the “CPC”) held that a call option for purchase of a majority stake in a target company, as well as certain minority shareholder protection rights, conferred no control in the competition law meaning of the notion and, thus, did not lead to (...)

The Bulgarian Competition Authority dismisses minority shareholder protection rights as a form of acquisition of control (Beer Production)
Kinstellar (Sofia)
The Bulgarian Commission for Protection of Competition (the «CPC«) found that minority shareholder protection rights conferred no control in the competition law meaning of the notion because they did not relate to the exercise of decisive influence but merely to preservation of the shareholder’s (...)

The Dutch Competition Authority clears a temporary minority shareholding in a competing undertaking, acquired by a publisher to finance the sale of its subsidiary (Sdu / Ten Hagen & Stam)
Netherlands Ministry of Economic Affairs
In Sdu - Ten Hagen & Stam, publishing house Wolters Kluwer Nederland B.V. (WK) acquired a minority shareholding of less than 25% in its competitor Sdu Uitgevers B.V. (SDuU), to provide financing for the sale of its subsidiary Ten Hagen & Stam to SduU’s parent company Sdu N.V (SDu). In (...)

The Dutch Competition Authority issues an administrative appeal decision, stating that an exemption for a restructured joint venture – which has been converted into a subsidiary in which competing construction companies hold minority stakes – is not required (Asfaltcentrale Stedendriehoek)
Netherlands Ministry of Economic Affairs
Asfaltcentrale Stedendriehoek (ACS) was an administrative appeal decision by the Nederlandse Mededingings autoriteit (NMa), the former national competition authority of the Netherlands, concerning an agreement on the restructuring of an asphalt production joint venture established by four (...)

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