EU Flags Missteps By GE and Others In Filing for Deals -- WSJ
2017年7月7日 - 4:02PM
Dow Jones News
GE and Canon among companies being probed for violating merger
strictures
By Natalia Drozdiak
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 7, 2017).
BRUSSELS -- The European Union's antitrust watchdog accused
General Electric Co., Japan's Canon Inc. as well as German
pharmaceuticals group Merck KGaA and Sigma-Aldrich Corp. of
breaching the bloc's merger rules.
The moves come as the EU is trying to drive home to companies
the urgent need to submit accurate and truthful information when
registering a deal for antitrust review with Brussels. The EU's
competition chief told The Wall Street Journal in March that her
department is reviewing a handful of recent merger clearances on
suspicions companies misled investigators in securing approval.
The EU said General Electric may have misled regulators when the
EU was reviewing its $1.65 billion deal with LM Wind Power, while
Merck may have done so with its $17 billion acquisition of
Sigma-Aldrich, a U.S. supplier of laboratory testing materials.
Japan's Canon Co. may have violated rules by implementing its
deal with Toshiba Corp.'s medical-systems unit valued at Yen665.5
billion ($5.9 billion) before registering the acquisition with the
EU, the regulator said.
The EU's clearances for all three deals remain valid, the EU
said. But if in its formal investigations the regulator finds the
companies did in fact provide incorrect or misleading information,
the companies can be fined up to 1% of global revenue. In Canon's
case, if the EU finds the company jumped the gun with implementing
the merger, it could be fined as high as 10% of global revenue.
"We can only do our job well if we can rely on cooperation from
the companies concerned -- they must obtain our approval before
they implement their transactions and the information they supply
us must be correct and complete," said EU antitrust chief Margrethe
Vestager.
The EU said GE initially failed to provide information regarding
research and development activities and that information was
necessary to properly assess the future position of GE and the
competitive landscape on the wind-turbine market, the watchdog
said. GE re-registered its deal in February to reflect the future
project, which had not been notified in the initial registration
two weeks earlier, the EU said.
GE said it believed the company acted in good faith and that
there was no intent to mislead. "When informed of the EC's
concerns, we acted quickly and openly to resolve the issue," said
GE spokesman James Healy.
In the deal between Merck and Sigma-Aldrich, the companies
failed to provide important information about an innovation project
relevant to laboratory chemicals at the heart of the EU's analysis
of the deal.
"Had this project been correctly disclosed to the commission, it
would have had to be included in the remedy package," the EU said,
referring to a business the companies had to divest to win approval
for a deal. The viability of the divested business was impaired as
a result, the EU said.
The buyer of the divested business, Honeywell International
Inc., received the relevant technology only a year later after
Merck agreed to license it to them, the EU said.
In its investigation into Canon's deal, the EU said it was
concerned the company used a two-step transaction structure
involving an interim buyer, which essentially allowed it to acquire
Toshiba's unit before obtaining the relevant merger approvals.
Japanese regulators last year warned Canon that the way it
structured the deal potentially violated the law, but also said the
deal could go ahead.
Canon said it had received the EU's so-called statement of
objections announcing the formal investigation, adding it would
respond to the EU in due course.
Thursday's announcement follows the EU's decision in May to fine
Facebook Inc. EUR110 million ($124 million) for providing incorrect
information or misleading authorities over the acquisition of its
messaging unit WhatsApp. The EU said Facebook inaccurately claimed
during the merger review in 2014 that it couldn't routinely match
Facebook and WhatsApp user accounts -- something the company
started doing two years later when it began combining user data
across the services. Facebook said the errors in the filings
weren't intentional.
At the time, the EU also opened an investigation into a
previously cleared merger between Dutch telecommunications company
Altice NV and PT Portugal SGPS SA. The EU accused Altice of
implementing its merger announced in 2014 before formally logging
the deal for review with EU authorities. Altice said it disagreed
with the commission's preliminary findings.
Under the EU's merger rules, companies have to abide by strict
and tight deadlines to submit information requested by the
regulator, something lawyers say can be a challenge if companies
have to dig up documents or internally cross-check information with
different departments.
The EU says all the deals currently under renewed scrutiny will
keep their clearance. However, in more severe cases, the EU could
revoke a merger clearance if more accurate information would have
led to a different decision.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
July 07, 2017 02:47 ET (06:47 GMT)
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