Hungary breached European Union merger rules by vetoing Vienna Insurance Group’s (VIG) planned takeover of Dutch insurer Aegon’s local business, the European Commission said on Thursday, outlining its “preliminary position”.
VIG announced in November 2020 that it agreed to acquire the businesses of Aegon in Hungary, Poland, Romania and Turkey for 830 million euros, a deal that would have made VIG the market leader in Hungary. The Interior Ministry rejected the planned takeover in April 2021, according to VIG.
The government can block foreign takeovers of domestic companies under special powers granted to it by parliament.
The EC member states may only take measures “to protect legitimate interests provided that such measures are compatible with the general principles and other provisions of EU law, and are communicated to the Commission except for limited instances,” the EC said in its statement.
It added that there were “reasonable doubts as to the measure being aimed to protect Hungary’s legitimate interests” and that Hungary’s “reasoning is insufficient”. The veto “should have been communicated to, and approved by, the Commission before Hungary implemented it,” EC said.
Hungary has ten working days to respond to the EC’s preliminary assessment, and further action may result in an infringement assessment and an order to withdraw the veto, the statement added.
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