31 May 2002 The €1.4 billion takeover of Denmark’s Navision by software giant Microsoft has cleared a major hurdle after the European Commission (EC) said that it would not investigate – let alone block – the deal.
Accountancy software specialist Sage had called on the European Union’s (EU) competition authorities to stop the merger, arguing that it would give Microsoft a dominant position in the European market for software for small and medium-size businesses.
EU competition spokeswoman Amelia Torres said that the EC would not examine the proposed takeover in detail because it was small. This is because annual sales of Navision software are less than €250 million. However, Navision does control 57% of the Danish market.
For the EU to step in, the combined worldwide sales of the two companies must be at least €5 billion per year and their respective sales within the EU must be at least EU250 million annually. Navision posted half-year sales of 849 million Danish kroner (€114.3m).
However, the competition authorities of EU member countries can still investigate the deal. Newcastle, England-based Sage initially insisted that it was going to have the takeover referred to the antitrust authorities of Denmark, France, Germany and Britain.
But following the rebuff, Sage admitted that its anti-Microsoft case might be weak – one analyst even described it as “completely pathetic”.
Sage calls on EU to stop Microsoft’s Navision buy (28 May 2002)
Meeting with EU approval (April 2002)
All mergers between large companies that have operations in the EU must be approved by Brussels. But the EC’s role as judge and jury has lawyers calling for reform.