European Commission Imposes a €124.5 Million Fine for Gun-Jumping

On April 24, 2018, the European Commission (“EC”) fined Altice, a Netherlands-based cable and communication company, €124.5 million for implementing its acquisition of PT Portugal before receiving regulatory approval. In particular, the EC concluded that Altice (i) acquired the legal right to exercise decisive influence over the target through the purchase agreement’s grant of veto rights concerning ordinary course of business matters, and (ii) actually exercised decisive influence in some cases. The fine is the highest ever for violation of EU merger control rules and represents the first time the EC has taken issue with the wording of pre-closing covenants in a transaction agreement. The ruling serves as a reminder for merging parties and their advisors to ensure compliance with applicable merger control rules with respect to pre-closing covenants, integration planning, and information exchanges prior to regulatory approval. The decision may also signal the EC’s increased focus on detecting and punishing pre-closing conduct and may lead to increased enforcement by national competition authorities within the EU and beyond. Read more about the impact of the decision in S&C’s recent client memo.