The Netherlands Authority for Consumers and Markets (ACM) has launched an investigation into the acquisition of Ziemann by cash-in-transit company Brink’s. This is unusual, because the acquisition falls outside the scope of merger control and does not need to be notified to the ACM.
Mergers, acquisitions and (independent) joint ventures that meet certain turnover thresholds must be reviewed beforehand by the ACM. One of the requirements is that the buyer and the target each generate a turnover of at least EUR 30 million in the Netherlands. The advantage of this system is that companies can be certain that a transaction will not later be reversed (‘deal certainty’). A disadvantage is that ‘small’ acquisitions fall outside this supervision. Many EU countries and the European Commission have a similar system.
Competition authorities are concerned about ‘small’ acquisitions, particularly acquisitions that aim to eliminate small or promising companies (‘killer acquisitions’). The ACM is also concerned about companies that repeatedly make acquisitions that fall below the turnover thresholds. It therefore advocates the authority to be able to review ‘small’ acquisitions by means of a ‘call-in’. One of its arguments is that the current set of instruments is inadequate. The Mededingingswet (Competition Act) states, for instance, that a merger or acquisition cannot be considered an abuse of a dominant position.
A similar discussion is taking place abroad. This has been reason for some countries to change their merger rules. At the same time, competition authorities have become more creative. A case in point is the French Towercast case, which demonstrates that a national competition authority may apply the European prohibition on abuse of a dominant position to a merger or acquisition. The acquisition of EDPnet by Proximus in Belgium was blocked on this ground. The Belgian authority recently took things one step further by launching a cartel investigation into an acquisition in the flour trade. The ACM is also becoming more creative. It has investigated, for instance, an alleged ‘bead stringing’ strategy in the pallet sector. The ACM is also investigating a non-notifiable acquisition in the telecom sector, by including the turnover of the individual shareholders.
So the ACM has now also started an investigation into the acquisition by Brink’s. One day earlier, the ACM had already noted that the cartel prohibition and the prohibition on the abuse of a dominant position might apply to another non-notifiable acquisition in the fruit sector. The question is whether the ACM is authorised to do so for regular M&A transactions, in light of the system and the legislature’s express choice not to classify mergers and acquisitions as a form of abuse of a dominant position. This would otherwise raise the question whether the ACM even needs the requested new (call-in) power. This step by the ACM will in any event create undesirable legal uncertainty. The ACM is well advised to quickly clarify when M&A transactions might be in breach of these competition rules.
Information on dawn raids by the ACM and the European Commission can be found at invalacm.nl.
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