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GE, Canon Risk Fines Amid EU Clampdown on Merger Violation

July 6, 2017
While General Electric, and Merck and Sigma-Aldrich risk a fine of as much as 1% of annual worldwide turnover, Canon’s penalty could climb up to 10% of sales.

General Electric Co., Merck KGaA, Sigma-Aldrich Corp. and Canon Inc. risk fines for breaching European Union merger rules after regulators sent them antitrust complaints, months after the EU fined Facebook $125 million for giving misleading information during a deal review.

GE was accused of misleading officials examining its 1.5 billion-euro takeover of LM Wind Power, the European Commission said Thursday. Darmstadt, Germany-based Merck KGaA and Sigma-Aldrich also got objections for failing to provide information on a research project for chemicals during a 2015 merger review, it said. A third complaint went to Canon, which didn’t seek EU approval before implementing a Toshiba unit takeover last year.

“We can only do our job well if we can rely on cooperation from the companies concerned -- they must obtain our approval before they implement their transactions and the information they supply us must be correct and complete,” Vestager said.

While General Electric, and Merck and Sigma-Aldrich risk a fine of as much as 1% of annual worldwide turnover, Canon’s penalty could climb up to 10% of sales. The EU said however that the investigations won’t have impact its approval of the three mergers, which will remain effective.

EU Competition Commissioner Margrethe Vestager signaled a zero tolerance approach to companies that give inaccurate information when she fined Facebook Inc. 110 million euros on May 18 for combining WhatsApp data with its other services after having told the merger officials otherwise during the EU’s 2014 review. The social network said it acted in good faith and won a lower fine after cooperating with regulators.

GE’s push into the wind industry comes after the Boston-based firm took over Alstom Renewable Power Sector as part of its $10 billion acquisition of Alstom SA’s power operations two years ago. GE renamed the unit, which produces 6MW offshore wind turbines, GE Renewable Energy.

GE said the company “acted in good faith” with “no intent to mislead,” according to a statement, adding that it will continue its “constructive cooperation” with the EU.

The Commission also said in its preliminary view Canon used a so-called “warehousing” two-step transaction structure involving an interim buyer, which essentially allowed it to acquire Toshiba Medical Systems prior to obtaining the relevant merger approvals.

Japan’s Fair Trade Commission warned Canon last year for implementing the Toshiba deal before seeking regulatory approval.

Merck and St. Louis-based Sigma-Aldrich are suspected of failing to provide the commission with important information about an innovation project with relevance for certain laboratory chemicals at the core of the EU’s analysis.

By Aoife White and Gaspard Sebag

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