July 24, 2014
Marine Harvest fined by EU commission over Morpol acquisition
The EU Commission has decided to impose a EUR 20 milllion (US$26.95 million) fine on the world's largest salmon farmer, Marine Harvest for an alleged breach of the provisions of the European Merger Control Rules over the company's acquisition of Morpol.
Under EU merger regulation, mergers and acquisitions with an EU dimension - in particular because they meet certain turnover thresholds – must be notified to and authorized by the European commission before they are implemented.
In a notice on July 22, the EU commission said an investigation concluded that Marine Harvest should have been aware of its obligations to notify and await clearance from the commission before proceeding with the acquisition of 48.5% of Morpol in December 2012.
The merger of Marine Harvest and Morpol would have combined two of the largest farmers and primary processors of Scottish salmon. "The merged entity would have had high market shares and its competitors would have been unable to exert a sufficient constraint on it," said the commission. "The acquisition would likely have led to price increases which could have ultimately harmed consumers."
Harvest remains of the opinion that it acted in accordance with the requirements of the exception applying to public takeovers in its acquisition of Morpol and thus disagrees with the Commission on the applicability of a fine.
Marine Harvest states that the take-over of Morpol was structured as an acquisition of the initial shareholding followed by an immediate mandatory offer. 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.
Marine Harvest also notes that the size of the fine appears to deviate significantly from similar cases where fines have been applied by the Commission. It appears, however, more likely than not that the decision to fine the company will be referred to the EU courts.