The Croatian food and retail powerhouse Agrokor almost collapsed due to financial difficulties in 2017, but was saved from bankruptcy when its creditors accepted a debt resettlement deal in July 2018. Following the implementation of the deal, Fortenova Grupa d.d. (“Fortenova“) begun its operations on 1 April 2019 as the successor to the troubled conglomerate. However, it appears that Fortenova already has its own antitrust-related problems, since the Serbian Competition Commission (the “Commission“) had in early October announced that it would initiate formal proceedings to investigate whether the company failed to obtain merger clearance for the transaction.
Per the public statement of the Commission, the authority believes that there is a reasonable assumption that by taking over the assets of indebted Agrokor, Fortenova gained control over Frikom d.o.o. Beograd, Dijamant a.d. Zrenjanin, Mivela Mg, PIK Vrbovec d.o.o. Beograd, Kikindski Mlin, and other companies based in the Republic of Serbia that operated within the Agrokor group.
In the subject proceedings, the Commission will examine whether this transaction should have been notified to the authority within the meaning of the Competition Law and who has ultimate control over Fortenova. The Commission indicated its willingness to apply any remedies necessary, including referring to deconcentration.
As a reminder, the Competition Law provides that market concentrations are allowed, unless they would significantly restrict, distort or prevent competition in the market of the Republic of Serbia, and in particular if such restriction, distortion or prevention would result from the creation or strengthening of a dominant position. While Agrokor’s subsidiaries have faced a number of antitrust investigations in the past, this is unquestionably the most high-profile merger investigation that the Commission had undertaken to date.
On a related note, Agrokor (and not Fortenova) was also recently imposed with a EUR 53 million fine by the Slovenian Competition Protection Agency, since Agrokor failed to obtain merger clearance for acquisition of a Slovenian producer of drinks Costella via a Dubai based company Ardeya Global Ltd in 2016. Due to the current financial situation of Agrokor it is not clear if such fine could be paid. It remains to be seen which measures will the Slovenian Competition Protection Agency undertake in order to secure payment of the fine.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
