Merger Controls First Edition - J Sagar Associates

Dryllerakis & Associates Greece
in 2009 (19). However one could note that the HCC, under its current composition, has shown a significant progress in
looking successfully into merger cases and imposing remedies that reduce its anti-competitive concerns and safeguard
conditions of effective competition.
8.2. Aegean Airlines – Olympic Air. One of the recent highlights for M&A deals in Greece would certainly be the merger
between Aegean Airlines and Olympic Air, which was announced at the end of February 2010 and was finally blocked by
the European Commission on January 2011, after a 10-month investigation of the case. The significance of this deal was
based on the intended formation of one consolidated Greek air carrier, following the international tendency for consolidation
in the aviation industry. The deal aimed to create a stronger national carrier with potential international standing.
Argumentation also included the failing-firm defence for Olympic Air. The European Commission though, seeing the
formation of a quasi monopoly for some local routes, was not sufficiently satisfied with the remedies proposed by the
parties. The deal was finally prohibited, this being the second EC prohibition in the sector, following the Ryanair case.
8.3. Oil sector. The significant structural change that took place in the oil sector in 2010, due to the exit from the Greek
market of two major international players (Shell and BP), must also be noted. Following the deal in 2009 between Hellenic
Petroleum and BP (worth €359 million), which was cleared and implemented by the end of 2009 (Decision No.
465/VI/2009), Shell also sold its fuel sector to Motor Oil Group and its lubricants sector to Petropoulos SA. This latter
deal (Shell-Motoroil) was initially notified to the European Commission, but was finally referred to the HCC upon request
of the latter, which cleared it conditionally in 2010, after a Phase-II examination (Decision No. 491/VI/2010). Similar to
the case of Hellenic Petroleum/BP, the remedies referred to a reduction of market share of the merged entity in two specific
areas (Kefallonia and Ioannina prefectures) to the maximum level of 55%, by releasing gas stations accordingly. The
peculiarity of this merger is that both acquirers (Hellenic Petroleum and Motoroil) are the only players active in the Greek
upstream market of refinery, but this did not seem to worry the HCC.
8.4. Food – dairy sector. Another significant deal that occurred this year took place in the dairy market and referred to
the acquisition of MEVGAL (a dairy company with a strong presence in Northern Greece) by Vivartia. After a Phase-II
examination, the deal was conditionally cleared by the HCC (Decision No. 515/VI/2011). Remedies included the
divestment of a specific chocolate-milk brand (“TOPINO”) under the agreed terms and conditions. Furthermore, the
merged entity has undertaken: a) to supply raw milk to competitors at a maximum yearly volume of 30,000 tonnes, at cost
basis and pursuant to an objective, transparent and verifiable set of criteria, for a total period of five (5) years; and b) to
procure milk, under the current volumes and general trading terms from producers situated in five (5) prefectures of
Northern Greece for a transitional period of three (3) years, at the producers’ absolute choice and freedom. Finally, the
merged entity was committed to refrain, for a total period of five (5) years, from any practice which may result in, or may
otherwise be deemed to induce, directly or indirectly, exclusivity at retail outlets, including freezer-cabinet exclusivity.
Another deal referred to the notified concentration of EVGA S.A. and ELAIS UNILEVER HELLAS S.A., whereby the
latter acquired the ice cream brands of the former, through an asset deal. The market leader before the merger was Nestle
(EVGA and Unilever coming next), but after the transaction it was the merged entity who became the leader in the relevant
market. The concentration was examined in two phases and was finally cleared by the HCC (Decision No. 513/VI/2011),
with the following conditions: a) any exclusivity clause should be deleted from all EVGA’s existing cooperation and
distribution contracts and contracts for the provision of freezer cabinets on a rent-free basis; and b) the duration of the
non-compete clause against EVGA, regarding the production and marketing of branded ice cream in cooperation with
third parties, was reduced from three (3) years to one (1) year. Interestingly enough, the HCC also considered the
efficiencies in this case, while the failing-firm defence argument was rejected, because it was not shown that there was
any less anti-competitive, alternative merger.
8.5. Banking sector. In the banking sector, consolidation through M&A activity has been long-awaited, but here again
there remains the question of timing, as the financial results of the banks show a dramatic decrease. Last year, Aspis
Group faced the collapse of its insurance arm (‘Aspis Pronoia’), while its banking subsidiary (‘Aspis Bank AE’) recently
came to an agreement with Hellenic Postbank (‘TT’), which acquired a minority stake, offering full control of Aspis Bank.
The case was unconditionally cleared by the HCC (Decision No. 488/VI/2010) in Phase-1.
Due to the deteriorating circumstances with the Greek economy, rumours constantly formulate several scenarios and
possible combinations for consolidation in the banking sector, but nothing concrete has been announced up until now.
Recently (in August 2011), Alpha Bank and EFG Eurobank announced a friendly merger and the deal is expected to be
cleared by the end of 2011, possibly by the European Commission.
8.6. Other Phase-1 clearances. DIA (retailer) was fully controlled by Carrefour, but in 2010 it was agreed that it will pass
into joint control by Carrefour and Marinopoulos (50:50). This transaction had Community-dimension, due to the turnover
of the participating undertakings, but the parties requested that the European Commission send the case to the HCC, according
to Article 4 par. 4 of Regulation 139/2004. The case was cleared by the HCC (Decision No. 496/VI/2010), with the
commitment of Carrefour that it will not activate the 3-year non-compete clause existing in the franchise agreements.
There was also a case of establishing a concentrative joint venture between Humana and Nordmilich. The new joint
venture would be headquartered in Germany (Zenen, Lower Saxony), but due to the presence of the companies in Greece,
it should also be notified before the HCC. Clearance was granted by HCC the (Decision No. 509/VI/2010) and, given the
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