Brussels 7/6/17; Darmstadt, Germany 7/6/17— In connection to Merck KGaA’s acquisition of Sigma-Aldrich (see IBO 11/30/15), the European Commission (EC) has alleged that Merck failed to provide pertinent information related to the assets of its lab chemicals business, which was divested in 2015 to Honeywell as part of the EU’s conditions for the acquisition (see IBO 10/31/15). According to the EC’s investigation, Merck did not provide information about an R&D project related to the divested laboratory chemicals assets and, thus, did not transfer the project to Honeywell as would have been required by the EC. The EC stated, “Had this project been correctly disclosed to the Commission, it would have had to be included in the remedy package.” The EC said the project has the potential to “substantially increase” sales, and thus impacted the competitiveness of the divested businesses. Merck has since agreed to license the technology to Honeywell, but after a one year delay, and after a third party notified the EC. The EC could fine Merck up to 1% of annual sales. Merck responded that the innovation in question is packaging technology and that it is reviewing the EC’s complaint. The company stated, “Merck KGaA, Darmstadt, Germany, is confident this issue will be resolved in a satisfactory manner.” Merck will provide the EC with a written response.

The EC’s investigation is ongoing, and the acquisition’s approval will remain in place despite the outcome. Reuters reports that the companies have until the September 1 to respond. Margrethe Vestager, the European Commissioner for Competition, stated ”Honeywell was the buyer of the business. It needed all the right assets to make it a viable competitor on the market.“