The Higher Regional Court of Düsseldorf (OLG
Düsseldorf) has resolved a case resulting from a conditional
clearance decision of the German Federal Cartel Office
("BKartA"), in relation to the merger between Globus
Fachmärkte GmbH & Co. KG ("Globus", a German DIY
store chain) and Hela Profizentren ("Hela", a DIY store
chain owned by the Distributa-Group). The merger was cleared in
late 2007 by the BKartA with a conditional clearance, the clearance
being subject to the resolutory condition that four DIY retail
stores were sold within a period of ten months of the BKartA
There are three ways in which the BKartA can impose structural
remedies. The BKartA can impose:
a requirement (Auflage) = here,
clearance takes immediate effect. In case the requirement is not
put into effect within the specified timeframe, the BKartA has to
take action to reverse the clearance decision;
a suspensory condition (aufschiebende
Bedingung) = in this case, the clearance decision will only
come into effect following the condition being implemented;
a resolutory condition (auflösende
Bedingung) = here, the clearance decision is immediately
effective. However, should the condition not be implemented within
the set timeframe, the clearance decision issued with a resolutory
condition automatically reverts to a prohibition decision. The
BKartA does not have to take any further action but can initiate
demerger proceedings immediately after the set time-period has
Following the conditional clearance decision by the BKartA,
imposing a resolutory condition, Globus immediately merged with the
Hela DIY stores. However, following the end of the set ten month
period, the four DIY stores which were subject to the resolutory
condition imposed by the BKartA had not yet been sold.
Consequently, the conditional clearance decision automatically
became a prohibition decision and the BKartA started demerger
proceedings against the Globus/Hela merger in 2008.
Globus then took action in two ways. Firstly, Globus went to the
Higher Regional Court of Düsseldorf (OLG Düsseldorf) to
object to the BKartA's conditional merger clearance decision;
an application which was rejected by the court. Secondly, Globus
applied to the Higher Regional Court of Düsseldorf (OLG
Düsseldorf) to change the character of the remedy from a
resolutory condition to a simple requirement of sale. Under a
requirement, the onus is placed on the BKartA to actively revert
the clearance decision into a prohibition of the merger. Globus
argued against the effect of the conditional clearance decision,
declaring the entire subject matter of the merger incompatible with
competition law, purely by the clearance condition (which only
related to four stores) not being adhered to within the
Globus also argued that in this specific case, the set timeframe
would have to be extended, as the purchase offers Globus had
received for the four stores were financially unacceptable.
However, the court had little sympathy with Globus' line of
argument. Firstly it held that in the case of a requirement as well
as a resolutory condition, a situation is created where a merger is
tolerated for a short period of time which leads to an unacceptable
competitive situation on the market. This is only to be tolerated
for the shortest possible time which is necessary for the condition
or requirement to be fulfilled. Thereby no extension should be
granted. Secondly, the court found that Globus itself had merged
with Hela prior to ensuring that the conditions of the conditional
clearance could be met without any financial implications. Ten
months down the line and after having integrated its business with
Hela, Globus only had itself to blame for any financial
shortcomings which the merger, including its conditional divestment
condition posed to it now. As a commercial undertaking Globus would
have been free not to merge with Hela at any stage and that a
conditional clearance decision would have to be adhered to within
the time-frame set.
To view Community Week, Issue 491; 1st October 2010
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
By 27 December 2016, the Croatian Parliament needs to implement the Directive 2014/104/EU on antitrust damages actions, which is expected to streamline the procedure for private individuals and businesses to sue for damages...
The European Commission recently published its preliminary report on the E-commerce Sector Inquiry, identifying potential competition concerns in cross-border e-commerce of digital content and consumer goods.
The German government has recently published a bill that would significantly amend the criteria for determining whether an M&A transaction is subject to German merger control.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).