European Union: European Commission Issues Statement Of Objections Against Marine Harvest For "Gun Jumping"

The European Commission has issued a Statement of Objections against Marine Harvest ASA for the early implementation of its acquisition of Morpol ASA. Marine Harvest is a Norwegian seafood company and Morpol is the largest salmon processor in the European Economic Area.

In December 2012, Marine Harvest acquired a 48.5 percent stake in Morpol from Friendmall Ltd. and Bazmonta Holding Ltd., and subsequently submitted a mandatory public offer for the remaining 51.5 percent of shares in January 2013. Following the settlement and completion of the mandatory offer on March 12, 2013, Marine Harvest acquired 87.1 percent of the shares in Morpol. On August 9, 2013, Marine Harvest notified the Commission of its acquisition of Morpol, and the transaction was conditionally approved on Sept. 30, 2013. Marine Harvest completed its acquisition of the remainder of Morpol's shares in November 2013.

The Commission's view was that the acquisition of the 48.5 percent stake in Morpol represented an acquisition of control by Marine Harvest. The Commission therefore considered that Marine Harvest effectively acquired Morpol eight months before its notification to the Commission and 10 months prior to conditional approval of the transaction, thereby putting Marine Harvest in breach of Articles 4(1) and 7(1) of the EU Merger Regulation, which require transactions to be notified prior to implementation where they meet the required thresholds and prohibit implementation until the Commission has issued its decision, respectively.

If, following the Commission's investigation, Marine Harvest is found to be in breach of these provisions, it may be subject to a fine of up to 10 percent of its aggregate worldwide turnover. The Commission regards the prohibition of such an implementation prior to approval as "a cornerstone of EU merger control," and its stance on the seriousness of such a breach is evident following fines imposed in previous cases, such as the €20 million ($27 million) fine imposed on Electrabel for failing to receive prior approval by the Commission of its acquisition of control of Compagnie Nationale du Rhône.

The Commission's press release is available here.

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