This article discusses the standstill obligation under the EC Merger Regulation (ECMR) and a number of issues arising from its application in the context of acquisitions of minority shareholdings as well as possible solutions to address these issues. The standstill obligation is often characterized as a cornerstone of the ECMR. The EUR 20 million fine imposed by the Commission on Electrabel in June 2009 confirms that the Commission will take the enforcement of the standstill obligation very seriously. However, there are a number of issues in the interpretation of the standstill obligation that make its application in real-world cases extremely complex. Now that the Electrabel decision has increased the price of making mistakes, the importance of the issues surrounding the practical application of the standstill obligation has increased as well. This article focuses on the application of the standstill obligation in the context of acquisitions of minority shareholdings and more particularly the concepts of (1) de facto control, (2) partial implementation, and (3) interrelated transactions. This article then goes on to propose a number of possible solutions to enhance the level of legal certainty for practitioners and undertakings.
World Competition