On 16 July 2019, the CMA imposed a fine of £146,000 on Nicholls’ (Fuel Oils) Limited for breaching an interim “standstill” obligation during its merger investigation. This is the fourth time the CMA has imposed a fine for a practice that is commonly known in merger control as ‘gun-jumping’.
UK merger rules require merging companies to comply with interim measures imposed by the CMA. Interim measures aim to prevent pre-emptive actions that might prejudice the outcome of a merger case or impede the taking of any appropriate remedial action.
On 2 October 2018, the CMA served an initial enforcement order (“IEO”) on Nicholls’ (Fuel Oils) Limited (“Nicholls”) in relation to its completed acquisition of the oil distribution business of DCC Energy Limited in Northern Ireland (the “acquired DCC business”).
On 16 July 2019, the CMA found that Nicholls had failed to comply, without reasonable excuse, with the IEO by: (1) relocating the staff of the acquired DCC business to Nicholls’ premises; (2) using a Nicholls mini-tanker and employees to deliver oil to customers of the acquired DCC business and (3) failing to provide compliance statements to the CMA on time.
The CMA considered a total penalty of £146,000 reflected the flagrant nature of the first and second breaches and would deter other companies from indulging in similar behaviour.
The CMA’s decision is available here.
David Bailey advised the CMA during its Nicholls/DCC investigation and during the first three merger cases imposing penalties for breach of interim measures.