Modulaire fined for failing to notify ACM of acquisition of competitor
The Netherlands Authority for Consumers and Markets (ACM) has imposed on Modulaire, a manufacturer of modular homes, a fine of 1.85 million euros for having failed to notify ACM on time of an acquisition.
Martijn Snoep, Chairman of the Board of ACM, explains: “If businesses wish to merge, we will assess whether such concentrations lead to higher prices, reduced quality, or less innovation. That is why businesses have to notify ACM of their plans in advance if those plans exceed the statutory turnover thresholds. The notification rules are clear, and, when in doubt, businesses can always contact us.”
What was this case about?
Modulaire is a company that sells and rents out ready-made, temporary and permanent modular buildings, among other products. In October 2019, one of Modulaire’s subsidiaries, Algeco, acquired a rival company, BUKO. BUKO was active in the same sector. Modulaire was required to notify ACM of this acquisition in advance. The turnover of the corporate group to which Modulaire belonged exceeded the turnover thresholds for merger notifications. It took a while until the company realized it had made a mistake, and eventually did contact ACM, but, at that point, the acquisition had already long been completed. That is not allowed.
Modulaire acknowledged it had committed a violation, and accepted the fine. Modulaire fully cooperated with a simplified procedure. That is why the fine has been lowered.
Acquisition has been assessed after all
Having realized it had made a mistake, Modulaire did notify ACM of the acquisition after all. ACM subsequently assessed the acquisition, and cleared it.
ACM’s concentration control: mergers, acquisitions, and joint ventures
With any merger, acquisition, or joint venture, there is a question of whether, as a result of the transaction, prices go up, quality goes down or innovation slows down. If sufficient competition remains on the market, none of those things will happen. That is why ACM assesses in advance what the concentration’s effects will be. ACM does not need to be notified of all mergers and acquisitions. If the companies that wish to merge do not meet certain turnover thresholds, they can continue with the concentration without having to notify ACM thereof. ACM assesses whether markets will continue to work well for people and businesses, now and in the future.
More in this case
- 16-05-2022 Fining decision involving Modulaire for failing to file an acquisition notification (in Dutch)
See also
- Mergers, acquisitions, and joint ventures (in Dutch)
- 16-05-2022 Fining decision involving Modulaire for failing to file an acquisition notification (in Dutch)
- 09-06-2021 ACM clears acquisition of BUKO Holding by Algeco Holdings (concentration decision) (in Dutch)
- 21-12-2018 ACM’s guidelines for simplified resolution of cases involving a fine