MM GRUPP MAY HAVE VIOLATED THE LAW BY TAKING CONTROL OF FORUM CINEMAS AND ITS CINEMAS WITHOUT THE APPROVAL OF THE COMPETITION COUNCIL

The Competition Council has completed its investigation into the implementation of an unnotified merger and has sent a notification of a possible infringement of the Law on Competition to the Estonian company MM Grupp.

The Statement of Objections (SO) alleges that MM Grupp, without prior clearance from the Competition Council, acquired 51% of the shares in Forum Cinemas Lithuania from Odeon Cinemas Group (together with previously held shares – 100% in total) and took control of the company.

During the investigation, it was determined that MM Grupp acquired the ability to control all shares of Forum Cinemas Lithuania (which operated cinemas in Vilnius, Kaunas, Klaipėda, and Šiauliai) at the end of April 2021, while the Competition Council was still reviewing the Estonian company’s notification to carry out a merger, submitted on March 8, 2021. As the companies involved in the transaction failed to provide all the necessary information in a timely manner, the review period for the notification was suspended. On October 14, 2021, the Competition Council terminated the concentration review procedure, in accordance with the Law on Competition, which stipulates that if the review period for a merger notification is suspended for more than three months, the assessment process is terminated, and the notification is considered not to have been submitted.

Although the companies planning the transaction were not permitted to proceed with the concentration due to the lack of regulatory approval, MM Grupp actually exercised control over Forum Cinemas Lithuania by restructuring its business, changing its organisational structure, and aiming to integrate the two main cinemas in Vilnius and Kaunas into the Apollo cinema chain operated by MM Grupp.

According to the SO, at the end of 2021, MM Grupp, indirectly through its company Apollo Kinas, took over the cinema located in Vilnius’ Akropolis shopping centre. The remaining part of the Forum Cinemas Lithuania business and assets, including the cinema in Kaunas’ Akropolis, was leased to another company for a long period. However, this company only temporarily operated the cinema in Kaunas, as the control of it was regained by MM Grupp a year later, with the intention of integrating it into its Apollo cinema chain.

This integration was halted by the Competition Council in April 2023, when it adopted interim measures. These measures required MM Grupp, among other obligations, to manage all Forum Cinemas Lithuania assets and business – allegedly acquired without regulatory approval – in a manner that would not harm their economic viability, marketability, or competitiveness.

The Mergers Supervision Group proposes to acknowledge that MM Grupp violated the Law on Competition by implementing a concentration without notifying the Competition Council and obtaining its approval. For this infringement, it is proposed that the company be fined in accordance with the law and be required to either cease the infringement related to the two mentioned cinemas in Vilnius and Kaunas or take actions to restore the previous situation or eliminate the consequences of the infringement.

The interested parties, after having taken into consideration the material collected and the assessment carried out by the Authority's investigators, have the right to submit their arguments in writing to the Council and to make an oral presentation at the hearing before the Competition Council adopts a final decision on the possible infringement and imposes financial penalties. 

The SO does not constitute a final decision of the Competition Council and in no way restricts the right of the Competition Council to arrive at a different conclusion in the final decision than that proposed in the Group's Statement.