At its meeting held on 27/09/2018, the Commission for the Protection of Competition (hereinafter referred to as "the Commission") approved the merger to create a joint venture under the name VLPG PLANT LTD (hereinafter referred to as the "New Company") by the companies Petrolina (Holdings) Public Ltd, SYNERGAZ COOPERATIVE LTD and Intergaz Ltd (hereinafter the "Founding Companies / Companies") which was submitted to the Commission's Service on 18/05/2018.
At its meeting held on 22/06/2018, the Commission noted that this merger was within the scope of the Control of Concentration between Enteprisew Law no. 83(I)/2014 (hereinafter the "Law") and decided to proceed to a full investigation as serious doubts were raised as to its compatibility with the functioning of competition in the market.
In the context of the full investigation, the Commission publicized its initial findings in a Press Release on its website and in the Official Government Gazette.
The Commission's Service, during the full investigation process, requested additional information from the undertakings involved in the proposed concentration as well as third parties. The Commission's Service then submitted a Report of Findings to the Commission in accordance with Section 27 of the Law.
The Commission, at its meeting held on 2/8/2018, assessed the Report of Findings and decided that there were still doubts as to the compatibility of the concentration with the functioning of competition in the market. The Commission, acting on the basis of Section 28(2) of the Law, compiled a report with the objections ascertained in relation to the incompatibility of the concentration with the functioning of competition in the market and informed the participating undertakings that they could submit any amendments to the concentration in writing as well as any other commitments so as to remove the doubts raised in the report with the objections. Following that, in accordance with Section 33(1) of the Law, negotiations took place between the Commission and the participating undertakings with regards to any potential changes in the circumstances giving rise to the merger that could have as a result the lifting of the doubts ascertained by the Commission. As a result, the companies submitted a number of commitments, with the full text of their final commitments, being submitted on 26/9/2018.
After examining and evaluating the proposed commitments submitted by the participating undertakings and the results of the full investigation of the concentration, the Commission considered that the commitments undertaken by them were sufficient to remove the doubts raised.
Therefore, the Commission, acting on the basis of Section 28(1)(a) of the Law, decided unanimously to declare the concentration in question compatible with the functioning of competition in the market, subject to the commitments undertaken by the participating undertakings. The commitments submitted by the participating companies and the terms imposed are valid for the whole time period that the New Company will be active and concern the following:
(i) Amendment of the Shareholders' Agreement of VLPG PLANT LTD in order to ensure that there will not be different pricing policies or terms and conditions between the companies involved and customers. The New Company will enter into transactions with all its customers under the same terms (at arm’s length),
(ii) Amendment of the Shareholders’ Agreement of VLPG PLANT LTD in order to ensure the cost-oriented pricing policy of the New Company regarding the provision of storage space, access to anchorage and transport pipelines,
(iii) Ensure the possibility of renting storage space to at least two companies with a decrease in the minimum level of space necessary for accepting a company, and a commitment by VLPG that in the case where 10% of the total storage space is not used by a third party, then 100MT will be provided to the next applicant, even if the total storage space to third parties exceeds 10%.
(iv) Ensuring the provision of 10% of total storage space to third parties, in the case of extending the storage space,
(v) The provision a manual for protecting competition to all the members of staff of VLPG, in which all the policies of the New Company will be documented as well as the procedures that will have to be followed by all the members of staff who may have access to sensitive and/or confidential information.
(vi) Appointment of an independent third party responsible to check whether all the commitments have been met and to submit an annual report to Commission within the first semester of each year, which will confirm whether VLPG has met its commitments,
(vii) Commitment not to prevent any client of VLPG to use or rent any facilities, thus limiting any activity in the upstream or downstream market,
(viii) During the period of construction of the necessary facilities of the storage space and the twelve (12) month period from the start of the New Company’s operation, the companies are obliged to hold any Board of Directors’ meetings of VLPG in the presence of an independent third party, who will ensure that no illegal coordination exists in the affected markets and that no sensitive information regarding VLPG is exchanged.
(ix) The members of the Board of Directors and the chief executive officers of the Companies will not hold any position in the Board of Directors of the New Company, twelve (12) month after the start of VLPGS’ operation.
(x) The commitments must be met for the entire period of VLPG’s operation.
The Commission notes that pursuant to Section 40(1)(d) of the Law, where the concentration is implemented without the fulfillment of a condition imposed by the Commission pursuant to Section 28(1)(a) of the Law, it may impose an administrative fine not exceeding ten per cent (10%) of the total turnover of the undertaking which has the obligation for notification, as defined in Schedule II, in the financial year immediately preceding the concentration and an administrative fine not exceeding eight thousand (8.000) euros for every day during which the infringement continues.
Finally, the Commission notes that under Section 45 of the Law, the Commission may revoke any decision taken on the compatibility of any merger with the functioning of competition on the market or may alter the terms of the decision if it finds –
(a) that false or misleading information has been supplied or that necessary information relating to this concentration has been withheld by the notifying party or by any other participant in the concentration or by any interested person, or
(b) that any term imposed on the participants in the concentration by the said decision has not been satisfied or has ceased to be satisfied.
The complete version of the Commission’s decision will be publicized in the Official Gazette of the Government and on the Commission’s website in the near future.
COMMISSION FOR THE PROTECTION OF COMPETITION