Danish audit firms breached merger stand-still obligation
The Danish Competition Council (DCC) has decided that the audit firms KPMG in Denmark and EY partially implemented their merger prior to merger control approval. The partial implementation was a breach of the stand-still obligation in the Danish merger control rules.
Director of the Danish Competition and Consumer Authority (DCCA), Agnete Gersing says:
KPMG Danmark and EY should have waited for the merger approval before KPMG Danmark terminated their affiliation with the international KPMG-network. It undermines the effectiveness of the merger control system if undertakings either fully or partially implement a merger before approval.
It can lead to great socioeconomic costs if merger control rules are not followed. Mergers that impede competition can lead to higher prices to the detriment of both undertakings and consumers.
The Competition Council decided that the audit firms KPMG Danmark and EY breached the merger control rules in the Danish Competition Act before the merger was approved by the Competition Council on 28th April 2014.
The parties’ merger agreement of November 2013 stipulated that KPMG Danmark should immediately initiate the termination its affiliation with the international KPMG-network. KPMG Danmark therefore sent notice to the international KPMG-network on the same day as the merger agreement was signed. In doing so the parties began the implementation of the merger prior to its approval.
The decision is available at kfst.dk (only available in Danish)
For further information, please contact Communications Manager Hanne Arentoft, T: +45 4171 5098.