AdC issues statement of objection against Fidelidade - Sociedade Gestora de Organismos de Investimento Imobiliário, S.A. (Fidelidade SGOII) for failure to notify a merger

Press Release 13/2020
AdC issues statement of objection against Fidelidade - Sociedade Gestora de Organismos de Investimento Imobiliário, S.A. (Fidelidade SGOII) for failure to notify a merger
The AdC (Autoridade da Concorrência – Portuguese Competition Authority) sent a statement of objections to Fidelidade SGOII for failure to notify the acquisition of sole control of Fundo de Investimento Imobiliário Fechado Saudeinveste (Fundo Saudeinveste) and therefore, without obtaining prior clearance from the antitrust enforcer .
The merger in question consisted in the acquisition of the sole control of Fundo Saudeinveste by Fidelidade SGOII on 1 October 2018 and was notified to the AdC only after its completion on 21 February 2019. The notification was made after Fidelidade SGOII informed the AdC of the facts on November 26, 2018, i.e., only after the merger was implemented, through a request for ‘prior’ assessment, in which it asked the AdC, whether the transaction amounted to a merger.
Following the opening of a phase II investigation, on July 5, 2019, whereby the AdC considered that the merger was liable to raise competition concerns, Fidelidade withdrew the transaction, returning the management of the Fund in question to the previous management entity.
Nevertheless, implementing a concentration without prior notification and clearance by the AdC (gun-jumping) is a serious infringement, punishable with a fine of up to 10% of the turnover of the undertaking concerned in the preceding business year.
Mergers are subject to prior notification to the AdC when they meet one of the following conditions:
  • If, as a result of the operation, a market share of more than 50% is created or strengthened.
  • If the turnover of at least two of the participating companies exceeds €5 million and as a result of the operation results in a market share of 30% or more in a market; or yet
  • If all the companies participating in the operation have had a total turnover in Portugal of more than €100 million, provided that at least two of the companies involved individually have a turnover of more than 5 million euros.
These transactions must be notified to the AdC, as a rule, upon the conclusion of the agreement between the participating undertakings, but before they are implemented.
If companies are in doubt as to whether an operation they are planning meets the requirements for notification, they may resort to the prior assessment by the AdC, a confidential procedure with no associated costs.
Failure to notify a merger limits the early intervention power of the AdC to ensure that barriers to competition are not created or strengthened, with effects that are potentially harmful and sometimes difficult to eliminate, in particular the creation of monopolies.
For this reason, the prior notification obligation is a fundamental pillar of the whole merger control system and its breach is considered a serious infringement.
The AdC points out that the issuing of a statement of objections does not determine the final outcome of the investigation. At this stage of the proceedings, the undertaking concerned is given the opportunity to exercise its right to be heard in relation to the alleged offense and the penalties it may incur.
The Statement of Objections was adopted on September 22, 2020.

September 22, 2020