Pursuing concentrations implemented without merger approval (gun jumping) has suddenly come to the focus of the Serbian national competition authority (NCA) – in a short period of time, the authority has fined Croatian Fortenova Group for gun jumping and started investigating Ernst & Young.
Fortenova gets a gun-jumping fine
The gun-jumping fine for Fortenova has come on the back of an investigation the Serbian NCA initiated back in 2019. In the proceedings, the Serbian NCA was probing whether Fortenova acquired control of Agrokor’s assets without notifying the transaction in the merger control procedure.
Fortenova started with operations in 2019, taking over the assets of the troubled conglomerate Agrokor. In Serbia, Fortenova controls substantial assets, including companies active in several food-related sectors.
The Serbian competition law prescribes for a standstill obligation and notifiable concentrations cannot be implemented without a prior clearance from the NCA. In the probe, the NCA established that Fortenova’s takeover of Agrokor assets in fact amounted to a notifiable concentration and that Fortenova breached the law by implementing it without obtaining a merger approval in Serbia.
For the breach, the NCA fined Fortenova approx. EUR 75,000, noting that the main purpose of the fine was to prevent undertakings from committing gun jumping in the future. This amount of fine is towards the lower end of the range prescribed by the law (the maximum being 10% of the undertaking’s annual turnover in Serbia during the relevant year).
Despite imposing the fine for gun jumping, the NCA at the same time cleared the transaction at hand, as it did not find it problematic from a substantive point of view.
NCA starts a gun-jumping probe against Ernst & Young
In another development, the Serbian NCA has started a gun jumping investigation against Ernst & Young, for alleged acquiring of a Serbian company without notifying the transaction in the merger control procedure.
Specifically, the NCA is investigating US-based Ernst & Young LLP, concerning the takeover of a Serbian company Zilker Technology d.o.o. More info about the transaction will probably be available once the NCA publishes the reasoning of the decision to launch the probe (at the moment, only the operative part of the decision is publicly available).
Key takeawayPrior to the fine it imposed on Fortenova, the Serbian NCA had imposed a fine for gun jumping in only one case. This new fine may be an indicator of the NCA’s readiness to use all its powers in ensuring that undertakings indeed file their transactions in Serbia. Similarly, the investigation against Ernst & Young shows that the NCA will not refrain itself from starting gun-jumping probes even against foreign-based companies (including those from the US). |