This is the message that the French Competition Authority (FCA) reinforced when it imposed a €4 million fine on Bordeaux-based wine maker Castel Frères group in December 2013 for failing to obtain pre-closing clearance for its acquisition of 6 companies that were part of the rival Patriarche group in 2011.

The FCA became aware of the done deal when reviewing another transaction in the industry (Cofepp/ Quartier Français Spiritueux), through information provided by a third party.  The FCA asked the Castel group to formally notify its acquisition of the Patriarche entities, and cleared the acquisition in July 2012, after conducting an in-depth review.

Despite the clearance, the FCA fined the Castel group for failing to notify a reportable transaction.  In setting the amount of the fine, the FCA took the view that the Castel group’s failure was particularly serious as: (i) it did not require much legal analysis to conclude that the transaction was reportable, and the Castel group had the financial resources to hire competent counsel; and (ii) evidence showed that the Castel group deliberately chose not to notify with a view to ensuring a rapid closing.  The FCA stressed that the fact that the transaction had no adverse impact on competition was not a mitigating factor.

The €4 million fine is the highest that the FCA has imposed to date for failure to notify a deal, and is the third fine that the FCA has imposed for failure to notify a transaction.  The FCA’s European counterparts have also imposed (sometimes hefty) penalties for similar failures.  For instance, in 2009, the European Commission fined Electrabel €20 million for acquiring control over Compagnie Nationale du Rhône without seeking prior approval.

In short, this recent French fine underscores the importance for companies to ensure that all mandatory notifications are made (and clearances obtained).  Time sensitivity is not a defense.  A failure to notify is likely to be noticed at some point, and may well prove to be costly.