Antitrust Law Daily Wrap Up, TOP STORY—EC fines salmon producer €20M over early harvest of rival, (Jul 23, 2014)

By Jeffrey May, J.D.

Norway-based salmon farmer and processor Marine Harvest ASA has been fined €20 million by the European Commission (EC) for acquiring its rival Morpol ASA, before receiving prior authorization under the European Union Merger Regulation. The EC announced today that Marine Harvest implemented the acquisition eight months before the formal notification took place and over nine months before the EC authorized it, in breach of the merger control rules. Marine Harvest violated the so-called “standstill obligation,” which prevents parties from completing a notifiable transaction while the EC reviews the deal to assess its competitive impact.

Marine Harvest describes itself as one of the largest seafood companies in the world. It is the world’s largest producer of Atlantic salmon.

In 2012, the company entered into an agreement to acquire Morpol—the world leader in smoked salmon. According to the EC, it was notified of the transaction in August 2013. The EC subsequently cleared the transaction with conditions in September 2013. However, the EC has now determined that Marine Harvest acquired de facto sole control over Morpol by acquiring a 48.5% stake of the firm on December 18, 2012. As a result of this transaction, the EC asserts, “Marine Harvest enjoyed a stable majority at the shareholders' meetings, because of the wide dispersion of the remaining shares and previous attendance rates at these meetings.”

The EC noted that the €20 million fine reflected Marine Harvest's size, as well as the company’s previous experience and familiarity with EU merger control rules. In addition, the infringement was particularly serious because the transaction, as originally proposed, raised competition concerns and was only cleared after the submission of significant remedies.

Marine Harvest response. In a statement released today, Marine Harvest suggested that “more likely than not” it would appeal the fine. The company contends that it acted in accordance with the requirements of the public takeovers exception in acquiring Morpol.

“The take-over of Morpol was structured as an acquisition of the initial shareholding followed by an immediate mandatory offer,” according to the statement. “Marine Harvest made it clear to both the market and Morpol that no control would be taken before the acquisition had been cleared by the EU.”

The company also questioned the size of the fine. According to Marine Harvest, the fine appears to deviate significantly from fines in similar cases.

MainStory: TopStory Antitrust