HomeInsightsCompetition and Markets Authority imposes a fine of £146,000 on company for breach of standstill obligation during a merger investigation

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On 16 July 2019, the CMA imposed a fine of £146,000 on Nicholls’ (Fuel Oils) Limited for breaching an Interim Enforcement Order (IEO) during its investigation of a merger between Nicholls and DCC Energy Limited. The transaction was not notified to the CMA – unlike the position in the EU, UK merger control operates as a voluntary regime – but was identified as warranting an investigation by the CMA’s mergers intelligence function.

The IEO imposed a standstill obligation requiring Nicholls to: maintain and operate the enterprises separately and refrain from taking any action which might impair their ability to compete independently; take certain steps to procure their continued separate operation; ensure compliance with the IEO; and to notify the CMA immediately of any suspected breach of the IEO.

The CMA found that Nicholls had, without reasonable excuse, failed to comply in certain respects with the requirements imposed on Nicholls by the by: (i) relocating the staff of the acquired DCC business to Nicholls’ premises; (ii) using a Nicholls mini-tanker and employees to deliver oil to customers of the acquired DCC business and (iii) failing to provide the CMA with compliance statements on time. To read the CMA’s decision in full, click here.

The CMA’s decision to impose a fine on Nicolls is the latest example of UK and EU regulators taking a tougher stance on so-called gun-jumping. This is the fourth time the CMA has imposed a fine for gun-jumping since 2018. At an EU level, on 27 June 2019, Canon was fined €28 million for implementing its acquisition of Toshiba Medical Systems Corporation before notification to and approval by the European Commission and, in April 2018, the Commission fined Altice €124.5 million for breaching its standstill obligation following notification of its proposed acquisition of PT Portugal.