Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC clears acquisition of Shell’s Dansk Fuels, with conditions, (Mar 23, 2016)

By Linda O’Brien, J.D., LL.M.

The European Commission (EC) has approved under the European Union (EU) merger regulation the proposed acquisition of Shell's Danish retail and wholesale fuels business, Dansk Fuels, by Alimentation Couche-Tard of Canada, which operates in Denmark under the Statoil brand via its subsidiary Statoil Fuel and Retail ("SFR"), the EC announced today. The Commission was notified of the transaction February 4, 2016.

SFR operates in Denmark under the Statoil brand and is ultimately controlled by Canadian company Alimentation Couche-Tard ("ACT"). ACT is a leader in the convenience store industry and has a global network of convenience stores and service stations. ACT is present in North America, Europe, and Asia. SFR undertakes three categories of activities in Denmark: retail sale of motor fuels, commercial or wholesale of motor fuels, and convenience retail sale of daily consumer goods and lubricants. Dansk Fuels comprises Shell's retail and non-retail sale of motor fuels and aviation fuels business in Denmark.

The EC's investigation focused on the Danish petrol station retail market and the wholesale markets of various refined oil products, where both Dansk Fuels and SFR are active.

The Commission identified competition concerns with regard to the following markets in Denmark: the petrol station market; and the wholesale markets for diesel, gasoline, light heating oil, and heavy fuel oil. The transaction combines the fuel businesses in two Danish wholesale markets and two petrol station markets in Denmark. The EC had concerns that the remaining players would be unable to exercise a sufficient competitive constraint on the merged entity to avoid price rises at petrol stations and for wholesale customers.

The EC also investigated links between the companies' activities in vertically-related markets and in particular the relationship arising from the companies' activities in both the upstream wholesale of diesel, gasoline and light heating oil to resellers or retailers, and the downstream wholesale and retail supply of these products to end-customers. The EC had concerns that the merged entity would have had the ability and the incentive to shut out competing resellers or retailers from access to these products, because of its high market share on the upstream markets and the higher margins to be made on the downstream markets.

In order to address the Commission's competition concerns, SFR offered a comprehensive remedies package, including the divestment of more than 200 petrol stations and Shell's commercial fuels business. The Commission found that the commitments address its the competition concerns and concluded that the proposed transaction, as modified, would raise no competition concerns. The divestiture will create a national player that is capable of replacing the lost competitive constraint resulting from the transaction both at the national level and at the local level.

Pioneer acquisition. The EC also has approved under the EU merger regulation the acquisition of joint control over Pioneer Investment Management USA Inc. by private equity companies Warburg Pincus LLC and General Atlantic LLC, both of the United States, and banking group Unicredit S.p.A. of Italy. Pioneer US is currently a wholly-owned subsidiary of Unicredit and is active in the business of asset management, with operations in the U.S. and Canada. The Commission concluded that the proposed acquisition would raise no competition concerns, since Pioneer US has no actual or foreseen activities and assets within the territory of the European Economic Area (EEA).

Jarden-Newell merger. The acquisition of Jarden Corporation by Newell Rubbermaid Inc., both of United States, has been approved by the EC under the EU merger regulation. Both companies sell a wide range of branded consumer products globally, including baby products, various tools, cleaning products, home and food storage, and coolers. The Commission concluded that the proposed acquisition would raise no competition concerns because the companies' activities were largely complementary and any overlaps between their activities were very limited.

Engineering-Apax merger. Finally, the EC has approved under the EU merger regulation the acquisition of joint control over Engineering Ingegneria Informatica S.p.A. of Italy by investment funds Apax Partners of the U.K. and Neuberger Berman of the United States. Engineering provides IT services almost exclusively in Italy to several sectors, including public administrations, utilities and telecoms, and financial services. It provides the full range of IT services, with a particular focus on proprietary software development and management. The Commission concluded that the proposed acquisition would raise no competition concerns, in particular as there are only minor overlaps between the activities of engineering and those of portfolio companies of Apax Partners and of Neuberger Berman. Moreover, numerous other competitors will remain active in the relevant markets.

Companies: Dansk Fuels; Alimentation Couche-Tard; Pioneer Investment Management USA Inc.; Warburg Pincus LLC; General Atlantic LLC; Unicredit S.p.A.; Jarden Corporation; Newell Rubbermaid Inc.; Engineering Ingegneria Informatica S.p.A.; Apax Partners; Neuberger Berman

News: AcquisitionsMergers Antitrust