In Morocco, the Competition Council wants to see more clearly in the Vivendi/Lagardère merger. The regulator has just initiated an “in-depth examination” of this merger project notified in April 2022.
The case concerns the acquisition by “VIVENDI SE” of exclusive control of “LAGARDÈRE SA” through the acquisition of 45.1% of its capital and 37.2% of its voting rights.
For the services of the Council, there remains “a serious doubt harm to competition” around the operation. Ahmed Rahhou’s institution will examine whether “it is likely to harm competition, in particular by creating or strengthening a dominant position or by creating or strengthening buyer power which places suppliers in a position of economic dependence. This is the very object of the in-depth examination.
Linked to the Bolloré group, Vivendi is a European company, listed on the regulated Euronext Paris market. It operates in the media, publishing and communication. Lagardère is a public limited company under French law, also listed on Euronext Paris. Publishing, travel retail, media and performing arts are among its areas of activity.
The address does not matter
But why is a Moroccan authority interested in an operation carried out abroad by two foreign entities? The answers of specialists converge on the same explanation: “Even the foreign operations (which we call “ foreign-to-foreign » in the jargon) may have an impact on Moroccan territory if the parties have activities in Morocco; which, I believe, is the case with this operation, in particular for Lagardère”, explains Me Marta Giner Asins, lawyer at the bars of Paris and Valence (Cabinet Northon Rose Fulbright LLP, Paris).
One of his colleagues at the Paris Bar confirms. “If the Vivendi/Lagardère transaction has been notified to the Competition Council, and the latter has also decided to move to phase II (in-depth examination), it is because the transaction has an impact on the Moroccan market; either through the presence of subsidiaries in Morocco, or through the existence of a turnover achieved in Morocco through the sale of goods or the provision of services”, explains Me Saad Mernissi (Cabinet Figes Mernissi, Casablanca) .
“Regarding this operation, it seems that the market for the sale of books is the one impacted in Morocco, as described in the Council’s press release on this operation”, continues our interlocutor.
A third specialist takes us back to the origin: the first article of Law 104-12 on freedom of pricing and competition. “The scope of this text concerns all natural or legal persons, whether or not they have their headquarters or establishments in Morocco”, reminds us of this lawyer at the Paris Bar. “What matters is that the operation or the behavior has the purpose or is likely to have an effect on competition on the Moroccan market,” she explains.
Moreover, most of the Phase IIs initiated by the Council involved international concentrations. Our interlocutor reminds us of the cases of Alstom/Bombardier, Sika AG/LSF11 Skyscraper Holdco or even Uber/Careem.
An in-depth review that has been going on since 2019
What to expect in the Vivendi case?
Theoretically, the Competition Council takes a decision within 90 days. In fact, the procedure can take longer; or even drag on, as in the case of the takeover of Careem by Uber. In this case, the in-depth examination in 2019, then three years later, did not lead to any decision. public.
While awaiting the decision, the parties may propose commitments such as to remedy the anti-competitive effects of the operation.
If necessary, Vivendi and Lagardère may request the suspension of the review period for the transaction within the limit of 30 days. This suspension may be initiated by the Regulator himself if the parties have failed to inform him of a new fact as soon as it arises, or to communicate it to him.
In the case in point, the results of a takeover bid by Vivendi were announced on Tuesday June 15, bringing its stake in Lagardère to 57% and its voting rights to 47%. This is already an evolution compared to the content of the notification made in April to the Moroccan authority.
Upon completion of the review, the Council may:
- to allow the concentration operation, which may be subject, where applicable, to the effective fulfillment of the commitments made by the parties having made the notification;
- that is to allow the operation by enjoining the parties to take any measure likely to ensure sufficient competition, or by obliging them to observe requirements likely to make a sufficient contribution to economic progress to compensate for the harm to competition;
- that is to forbid the concentration operation and enjoin, where appropriate, the parties to take any measure likely to restore sufficient competition.