Merger Control (2nd Edition)
The UK merger control regime – which is contained in the Enterprise Act 2002 – is one of the few voluntary, non-suspensory filing regimes in the world. If a transaction meets the relevant jurisdictional thresholds, the UK competition authority – the Competition and Markets Authority (CMA) – will have jurisdiction to review the transaction and to impose remedies to address any substantial lessening of competition to which it considers the transaction may give rise. However, merging parties have no obligation to notify the CMA of a relevant transaction and are free to complete it unless and until the CMA decides to open a second-phase investigation, or imposes an ad-hoc prohibition on closing during first-phase (it has never done the latter, to date).
If a transaction is completed without the parties having first sought a clearance from the CMA by making a voluntary filing, then the purchaser of the relevant target business effectively assumes all antitrust risk in the transaction, including: (i) the risk that the CMA subsequently opens an investigation, concludes that the transaction is likely to lessen competition substantially and imposes remedies (which could include a requirement to divest the entire target business at no minimum price); and (ii) the financial cost of complying with strict hold-separate obligations that are invariably imposed by the CMA on both the target business and the purchaser's business for the entire duration of its investigation, through to implementation of any remedies that are required.
Substantive and procedural rules on Italian merger control are set forth by Law No. 287/1990 (the “Law”). Further procedural rules are established by Presidential Decree No. 217/1998. The competent enforcement authority is the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato – the “ICA”).
The definition of concentration largely mirrors that adopted by the EU Regulation No. 139/04. Under recently-revised turnover thresholds, a concentration needs to be filed with the ICA (provided it has no Community dimension), if: (i) the combined aggregate Italian turnover of all the undertakings concerned is more than EUR 492 million; and (ii) the Italian turnover of each of at least two of the undertakings concerned is more than EUR 30 million.
A concentration that meets the above thresholds shall be filed prior to its execution. However, since the Italian merger control rules do not provide for a standstill obligation, the parties may choose, at their own risk, to close the transaction before the ICA’s final decision.
As a general rule, Phase I has a duration of 30 calendar days (15 calendar days in case of public bids). Phase II has a duration of 45 calendar days (which can be extended by additional 30 calendar days if the parties fail to provide available information). Exceptions apply in case of concentrations involving the banking, insurance, media, telecommunication and broadcasting sectors.
With its final decision, the ICA can: (i) decide not to appraise the transaction (e.g., if it does not meet the Iocal thresholds); (ii) unconditionally clear the transaction; (iii) clear the transaction subject to structural/behavioral remedies; or (iv) prohibit the transaction.
The ICA’s decision is notified to the parties and published in the ICA’s weekly Bulletin and website. It can be appealed before the Regional Administrative Tribunal for Latium within 60 days from its notification/publication. The decision of such Tribunal can be appealed before the Italian Supreme Administrative Court.
In the United States, the Federal Trade Commission (FTC) and the Antitrust Division of the US Department of Justice (DOJ) review transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), and the implementing regulations contained in 16 C.F.R. parts 801-803. Premerger notification under the HSR Act is mandatory for transactions that meet certain filing thresholds if no exemption applies. A transaction is potentially reportable under the HSR Act if either party to the transaction is engaged in commerce or in any activity affecting commerce, and the ‘size-of-person test’ and the ‘size-of-transaction test’ are satisfied. Both the ‘size-of-person test’ and the ‘size-of-transaction test’ are based on certain monetary thresholds and are adjusted annually to reflect changes in US GDP. The HSR Act contains exemptions from filing for certain types of acquisitions, including acquisitions that do not have a sufficient nexus to US commerce.
For most transactions requiring a filing, each acquiring person and acquired person must submit a premerger notification form, containing a short description of the transaction and basic information about the filing party. The parties are also required to submit certain documents that analyse the transaction with respect to competition-related topics and expected synergies or efficiencies.
The HSR Act imposes reporting and waiting period obligations of 30 calendar days (or 15 calendar days for a cash tender offer or certain bankruptcy transactions). During the waiting period, the enforcement agencies assess the likely effect on competition of the proposed transaction. The parties to a transaction may not close until the statutory waiting period has expired, or the government has granted early termination of the waiting period. The reviewing agencies will only grant early termination if they have determined that the transaction is not likely to lessen competition.
If, after the initial waiting period, the government requires further information to determine whether the transaction would result in anticompetitive effects, the waiting period is extended through the issuance a ‘Request for Additional Information and Documentary Material’ which consists of a lengthy set of document, data, and interrogatory requests (known as a ‘Second Request’). The Second Request extends the waiting period until 30 calendar days after both parties have substantially complied with the Second Request (10 days for cash tender offers and certain bankruptcies).
At the end of this second waiting period, the reviewing agency must decide whether to close the investigation and allow the transaction to proceed, enter into a negotiated settlement with the parties, or block the transaction in federal district court. In practice, these considerations are underway throughout the Second Request process.
The provisions relevant for German merger control are contained in the Act Against the Restraint of Competition (ARC) (“Gesetz gegen Wettbewerbsbeschränkungen – GWB”). The main enforcement authority is the Federal Cartel Office (FCO) (Bundeskartellamt). In addition to the FCO, every federal state has its own competition authority. However, merger control is centralized at the FCO.
Mergers and acquisitions require mandatory approval before completion, if certain conditions are met. The assessment comprises a check against turnover-thresholds and a check for possible exceptions. In addition to the check based on group turnover, the recent (9th June 2017) 9th amendment to the ARC introduced a transaction-value threshold (at EUR 400 Mio.). Both tests will be explained in further detail below.
A transaction may also be caught by German merger control in cases where the JV or the target has no actual or planned business activities in Germany, but the parent companies have significant turnover. German merger control operates with a fictional partial merger of the parent companies (“Fiktion der Teilfusion der Mütter”). In all cases caught by the obligation to notify, closing is prohibited prior to clearance by the FCO.
Parties involved in a transaction are, in any case, the acquirer and the target. If the seller continues to control the target or keeps a shareholding of at least 25 percent post-transaction, the seller remains a company involved and its turnover will be included into the threshold assessment. All parties involved in the merger are responsible to notify the transaction to the FCO, including the seller in cases where assets or shares are sold.
One special aspect of German merger regulation is that the minister of economy may clear a merger in rare cases, even after the FCO has denied clearance (“Ministererlaubnis”). In practice, such exemptions are extremely rare and usually involve political and social considerations, the involvement of unions, competitors, experts and a broader assessment of the influence of the merger on suppliers, customers and the economy as a whole, especially on social aspects like unemployment or structural effects.
In Japan, the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade (Antimonopoly Act) is the legislation that provides the general merger control regime. The Antimonopoly Act requires transactions that meet the thresholds to be notified prior to the closing and prohibits transactions that will substantially restrain competition in any relevant market. The Japan Fair Trade Commission (JFTC) has sole jurisdiction over the enforcement of merger control under the Antimonopoly Act.
Pre-closing notification is mandatory for any transaction that meets the thresholds. A transaction that is subject to the mandatory prior notification cannot be implemented during the 30-day waiting period (Phase I), though the period may be shortened. The JFTC clears most transactions at Phase I. If the JFTC decides that it will need to review further, the transaction goes to Phase II. The JFTC must reach the final conclusion within either (i) 120 calendar days from the initial notification or (ii) 90 calendar days from the date when the JFTC receives from the parties all the information requested at the beginning of Phase II, whichever is longer.
Although it is not mandatory, it is a common practice that parties seek pre-notification consultation with the JFTC before formal filing to clarify the contents of the notification (e.g., definition of relevant market). Also, the pre-notification consultation is often used to learn the JFTC’s preliminary view on the case. While the parties can quit the pre-notification consultation at any time, it usually takes a few weeks. If the parties spend a longer period for pre-notification consultation, such as several months, and respond fully to the JFTC’s questions during such consultation, it may reduce the possibility of going into Phase II.
The main statute regulating merger control in Austria is the Cartel Act 2005 (Kartellgesetz).
The Austrian Supreme Court (in its capacity as Cartel Court of Appeals) describes the objective of merger control as “the preventive support of the general interest in maintaining an ‘Austrian’ market structure […], which ensures effective competition”.
The authorities competent for merger control are the same as those responsible for the (public) enforcement of competition law in general. Notifiable mergers have to be notified to the Federal Competition Authority (Bundeswettbewerbsbehörde – BWB); the BWB informs the Federal Cartel Prosecutor (Bundeskartellanwalt – FCP). These two institutions are commonly referred to as the Official Parties (Amtsparteien). If either of the official parties requests an in-depth examination (in principle, within four weeks of receiving the notification), the Higher Regional Court of Vienna (Oberlandesgericht Wien) sitting as the Cartel Court (Kartellgericht) opens Phase II proceedings. If the official parties do not see competition concerns, the notified merger is cleared upon expiration of the Phase I period or receipt of the official parties’ waivers of their right to request Phase II proceedings. Decisions by the Cartel Court can be appealed against to the Austrian Supreme Court sitting as the Cartel Court of Appeals (Kartellobergericht). The decisions by the Cartel Court of Appeals in Phase III are final.
The Cartel Act defines which transactions qualify as notifiable mergers. Only transactions that are to be regarded as concentrations (Zusammenschlüsse) and exceed certain (essentially, turnover) thresholds have to be notified prior to consumption. If, even though the thresholds are exceeded, there is either no (potential) effect on the Austrian market (effects doctrine) or the thresholds of the EU Merger Regulation (EUMR) are also exceed, Austrian merger control does, in principle, not apply but the transaction may be notifiable elsewhere or, according to the “one stop shop principle”, to the European Commission.
While for a transaction to qualify as concentration, there typically needs to be a change of control (similarly as under the EUMR), the scope of Austrian merger control goes beyond that: Also the acquisition of only a 25% stake in another undertaking qualifies as concentration; further, the bringing about of an identity of at least half of the executive or supervisory board members is regarded a concentration between the concerned undertakings.
In the course of the latest amendment, entering into the force of law on May 1, 2017, a new notification threshold was introduced. This threshold also takes the transaction value and not only the parties’ turnover into consideration. The new threshold applies to any transaction to be implemented as of November 1, 2017.
The Canadian merger control regime is governed by the federal Competition Act (‘the Act’). The Commissioner of Competition (‘the Commissioner’) is responsible for the administration and enforcement of the Act as head of an independent law enforcement agency, the Competition Bureau (‘the Bureau’). The Commissioner and the Bureau receive merger notifications and conduct merger reviews. They also have the power to launch investigations into mergers that do not require notification, and they decide whether to challenge mergers before the Competition Tribunal (‘the Tribunal’), a specialized court with legal, economics, and business expertise.
The Act contains two parts that apply to mergers – one that establishes the merger control regime (which governs when parties are legally required to notify the Commissioner before closing their transaction) and another that contains the substantive merger review provisions (which sets out the substantive test for challenging a merger and the factors that will be considered in determining whether a merger should be challenged). These parts of the statute apply independently of each other. Thus, even if a merger does not require notification, it is still subject to the substantive merger review provisions (i.e., it can still be challenged).
Pre-merger notification is mandatory if the parties exceed the applicable financial thresholds, in which case there is a statutory prohibition on closing until the applicable waiting period has expired, been waived, or terminated. The turnover of the seller as well as the exports of all parties to the transaction are relevant for determining whether the transaction triggers a notification requirement, as described in greater detail below.
Filing may be required where there is an acquisition of a minority interest, even if the interest does not confer control or decisive influence over the target, so long as the applicable financial thresholds are exceeded and an additional “size of equity” test is met (described in more detail in below).
The expiry of the statutory waiting period does not always mean that the Commissioner has completed his substantive review of a transaction. The substantive test applied by the Commissioner and Bureau in its review is whether the proposed transaction is likely to prevent or lessen competition substantially.
Importantly, the Act has a unique efficiencies defence that can “save” an otherwise anticompetitive merger if it can be shown that the efficiencies from the merger are likely to be greater than and offset any prevention or lessening of competition that is likely to result from the merger.
As of June 1st, 2017, a new merger control regime entered into force in Chile. The main aspects of the new regime, set forth in a new Section IV of the Chilean Competition Act (Decree Law No. 211, “DL 211” or the “Competition Act”), are the following:
(i) a mandatory notification regime prior to the materialization of the envisaged operation with the National Economic Prosecutor’s Office (Fiscalía Nacional Económica, “FNE”) for concentration operations that meet certain turnover thresholds;
(ii) a suspension period until the final decision is rendered;
(iii) a two-stage investigation process; 30 working days for phase I once the notification is declared complete and an additional 90 working days for phase II. These terms can be suspended upon mutual agreement between the notifying parties and the FNE;
(iv) the possibility to offer remedies in both phase I and phase II;
(v) the possibility, in case of a decision prohibiting the operation envisaged, to appeal such decision before the Competition Tribunal (Tribunal de Defensa de la Libre Competencia, “TDLC”). Such decision is not subject to further judicial review, unless the TDLC approves the operation with conditions –different than the ones previously offered by the notifying parties–. Such decision is open to appeal before the Supreme Court for both the notifying parties and the FNE; and
(vi) a ‘substantial lessening of competition’ test.
The FNE has issued guidelines (available on the FNE’s website: www.fne.cl) which provide guidance related to the FNE’s jurisdiction, the calculation of turnover in relation to the applicable thresholds, the applicable notification forms, and remedies.
Section IV of DL 211 provides moreover that parties can notify voluntarily an operation of concentration that doesn’t meet the thresholds, and that the FNE is competent to review such operation –if not notified voluntarily– within a year after its materialization.
In addition, DL 211 provides for the obligation to inform the FNE ex-post of the direct or indirect acquisition of a non-controlling interest of 10% or more in a competitor. This obligation applies to companies that meet certain thresholds, indicated in answer number 6 below. This obligation is in force since August 30th, 2016.
The Control of Concentrations Between Undertakings, Law 83(I) of 2014 (the Law), is the legislative instrument governing the control of concentrations between undertakings in Cyprus.
Enforcement of the legislation rests with the Commission for the Protection of Competition (CPC). The CPC has overall responsibility for implementing the Law and is the competent independent authority for the control of concentrations. The Commission, after examining the report of the service of the CPC (the Service), declares that a concentration is compatible or incompatible with the functioning of competition in the market. The assessment, investigation and procedural aspects of the notification of concentrations are implemented by the Service.
The Law is applicable to transactions resulting in a permanent change of control. Such transactions include mergers of two previously independent undertakings or parts thereof, and acquisitions by one or more persons already controlling at least one undertaking, or by one or more undertakings, directly or indirectly, whether by purchase of securities or assets, by agreement or otherwise, of control of one or more other undertakings. Joint ventures performing all functions of an autonomous economic entity in a permanent manner are caught under the Law.
For the purposes of the Law, a concentration of undertakings is deemed to be of major importance and therefore meets the jurisdictional thresholds if:
- the aggregate turnover achieved by at least two of the undertakings concerned exceeds, in relation to each one of them, €3.5 million;
- at least two of the undertakings concerned achieve a turnover in Cyprus; and
- at least €3.5 million of the aggregate turnover of all undertakings concerned is achieved in Cyprus.
Foreign-to-foreign mergers are caught under the Law. The test as to whether a foreign-to-foreign merger constitutes a concentration of major importance is satisfied where the jurisdictional thresholds are met, with the local effects dimension being the achievement of a turnover of at least two undertakings concerned in Cyprus and the Cyprus-achieved turnover of all undertakings concerned is at least €3.5 million.
The Danish merger control regime is governed by the Danish Competition Act, which is to a large extent based on the principles of EU merger regulation. The rules on merger control are administered by the Danish Competition and Consumer Authority (the DCCA) and the Danish Competition Council (the Council). The DCCA is the primary enforcer of the Competition Act in Denmark and decides most cases on behalf of the Council, whereas more complex phase II-cases are decided by the Council.
Under Danish merger rules, filing of a merger is mandatory if the jurisdictional thresh-olds are met. A merger which meets the Danish thresholds and is thus subject to scrutiny may not be implemented prior to clearance by the Danish competition authorities.
Particular to the Danish merger regime is the use of so-called pre-notification discussions. Though not mandatory, parties to a potential merger in Denmark are strongly encouraged to contact the DCCA before filing the notification in order to initiate pre-notification discussions on an informal basis. In practice, a pre-notification period may often last at least two to three weeks in simple cases, and four weeks or considerably longer in more complex cases.
However, while the discussions can be quite extensive and may last several months, in particular in complex merger cases, pre-notification discussions significantly increase the likelihood of the merger being cleared in Phase I.
Merger control in the European Union (“EU”) is governed by Council Regulation (EC) No 139/2004 (“EUMR”). The EUMR contains the main rules for the assessment of “concentrations”. Under the EUMR, the term “concentration” captures mergers, acquisitions or the creation of joint ventures that perform on a lasting basis all the functions of an autonomous economic entity (see question 10).
The EUMR is complemented by the Implementing Regulation (Commission Regulation (EC) No 802/2004 of 21 April 2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings) and a number of interpretative notices, guidelines and best practices published by the European Commission (the “Commission”) (available on its website at http://ec.europa.eu/competition/mergers/legislation/legislation.html). These set out the procedural and substantive aspects of the assessment of concentrations under the EUMR and provide practical guidance with respect to the implementation of the EUMR.
The EUMR is enforced by the Directorate General for Competition of the Commission (“DG Commission”), which is the executive arm of the EU. There are several constituencies involved in the decision making process at the Commission and these include the case team assembled to review the concentration, the Legal Service, the Hearing Officer and the Chief Competition Economist.
The EUMR provides a “one-stop shop” for merger control, where companies can request clearance for their concentrations in the whole of the European Economic Area (currently comprised of the 28 EU Member States and three members of the European Free Trade Association, i.e. Iceland, Liechtenstein and Norway). The Commission in principle examines only concentrations with an “EU dimension”, i.e. those that satisfy the turnover thresholds set out in the EUMR. Transactions without an EU dimension may fall within the jurisdiction of the national laws of one or more Member States. The EUMR provides for a referral mechanism which allows the Member States and the Commission to refer cases between them, at the request of the parties involved in the concentration or at the request of Member States. As a result of such referral, a transaction that does not satisfy the turnover thresholds of the EUMR could be examined by the Commission or a transaction that does satisfy these thresholds may be reviewed under the merger control rules of one or more Member States.
The French merger control regime is set out in Articles L. 430.1 and seq. of the Commercial Code and is further described in practice by the merger control guidelines issued by the French Competition Authority ("FCA"), which is the relevant enforcement authority in France. To a more residual extent, the French Ministry of Economy holds limited powers at two main stages of the merger control process : at the end of a phase I review he can request the opening of an in-depth investigation, or at the end of an in-depth review by the FCA, he can decide to review the transaction itself if matters of public interest are at stake.
French merger control where applicable requires clearance before closing. In practice, this prohibition is recognized by conditions precedent typically included in the contractual documents. Failures to comply with the filing obligation, or pre-closing the transaction without clearance (“gun-jumping”), are punished by fines and an injunction, under article L. 430-8 of the Commercial Code. A recent case of gun jumping shows that the FCA considers it as an enforcement priority.
Mergers and acquisitions are regulated by the Control of Concentrations Regulations 2003 (S.L. 379.08) (the “Regulations”), a subsidiary legislation issued in terms of the Competition Act 1994 (Chapter 379 Laws of Malta) (the “Act”).
The Regulations establish the Office for Competition (the “OFC”), an entity falling within the Malta Competition and Consumer Affairs Authority and headed by the Director General (Competition) (“DG”), as the authority entrusted to review and, where applicable, authorise concentrations falling within the remit of the Regulations. Appeals from any decisions made by the OFC may be appealed before the Competition and Consumer Appeals Tribunal.
Firstly, one needs to establish if a notification to the OFC is necessary. A notification is required when the following criteria exist:
- Two or more previously independent undertakings merge or one or more undertakings (directly or indirectly) acquire control of all or part of one or more other undertakings; and
- The combined aggregate turnover in Malta in the preceding financial year of the undertakings concerned exceeds €2,329,273.40 and each of the undertakings concerned had a turnover in Malta equivalent to at least 10% of this combined aggregate turnover.
The creation of a ‘full functioning’ joint venture performing on a lasting basis all the functions of an autonomous economic entity may also be considered a concentration for the purposes of the Regulations.
If a notification is necessary, this must be made prior to implementation, and within 15 working days of the:
- Conclusion of the agreement; or
- Announcement of the public bid; or
- Acquisition of controlling interest.
The DG may allow notification to occur after implementation if justified. Moreover, a short form notification is allowed in the case of an acquisition of joint control by two or more undertakings where the turnover of the joint venture and/or the turnover of the contributed activities, is less than €698,812.02 in the Maltese territory and the total value of assets transferred to the joint venture is less than €698,812.02 in the Maltese territory.
Once notified, the OFC shall review the concentration to establish if it will lead to a substantial lessening of competition in Malta.
The mandatory notification turnover thresholds are remarkably low when considering current economic trends and market realities in Malta. The same applies to the short form notification thresholds.
The DG must issue a decision within 6 weeks of notification, extended to 8 weeks if the DG reverts by the fifth week with suggested modifications to render an otherwise unlawful concentration, lawful. These timeframes may be deemed too long and may frustrate the parties involved in the concentration.
The legal basis for the Norwegian merger control regime is the Norwegian Competition Act of 5 March 2004 and the Regulation on Notification of Concentrations of 11 December 2013. The national authority is the Norwegian Competition Authority (“NCA”, Norwegian: “Konkurransetilsynet”), which acts as the enforcer of the regime. However, as from April 2017, the NCA’s decisions are subject to administrative review by the newly established Competition Appeals Tribunal (“CAT”). Prior to the CAT becoming operational, the responsible Ministry decided administrative review cases.
The Norwegian regime is a compulsory filing system, where the obligation to notify is based exclusively on turnover thresholds. The applicable turnover thresholds were significantly increased in 2014. Consequently, the number of notified transactions is now significantly lower than prior to 2014. Furthermore, the NCA may order the notification of a transaction even if the turnover thresholds are not exceeded, in the event that there is reasonable basis for suspecting that the transaction may have a negative effect upon competition. The Norwegian regime is broadly harmonized with that of the EU, although there are certain points on which the two systems differ.
In addition to applicable law and regulation, the NCA has issued guidelines on the merger filing process. Please also note that all merger decisions by the NCA are published in Norwegian on the NCA website, http://konkurransetilsynet.no/.
Merger control is governed in Romania by the provisions of Competition Law no. 21/1996 and of the secondary enactments issued by the Competition Council, which is the relevant enforcement authority. The purpose of merger control is to prevent those economic concentrations which may significantly impede effective competition on the Romanian market or on a part of it, in particular due to the creation or the strengthening of a dominant position.
Notification to the Competition Council is compulsory for the economic concentrations involving undertakings the turnovers of which fulfil certain thresholds. The jurisdictional thresholds do not vary according to whether the concentration is "foreign-to-foreign". In case the jurisdictional thresholds are met, implementation of an economic concentration in the absence of the Competition Council’s prior clearance may entail the application of a fine of up to 10% of the total turnover achieved by the concerned undertaking during the previous financial year.
Competition Law no. 21/1996 sets forth special rules for the economic concentrations presenting risks for the national security, which must also be reviewed by the Supreme Council of National Defence.
KN: The merger control regime in Sebria is modelled after and, to a large extent, harmonized with the EU merger control regime. Nevertheless, certain local particularities exist, the main ones being as follows.
The Law on Protection of Competition (“Official Gazette of the RS”, no. 51/09 and 95/13; the “Competition Law”) which is effective since 1 November 2009 governs the merger control regime. Furthermore, several by-laws relevant to the merger control have been adopted including: the Regulation on the contents and format of submissions of notifications, the Regulation on the criteria for determination of a relevant market, the Decision on tariffs charged for practices before the Competition Commission etc. The Law on General Administrative Procedure is umbrella legislation (i.e. lex generalis) that governs points that are not specifically dealt with under the Competition Law. Furthermore, laws such as the Law on Administrative Disputes, the Law on Electronic Media, the Company Law etc. may apply as subsidiary laws where applicable.
The competent authority is the Competition Commission of the Republic of Sebria (the “Commission”; in Serbian: Komisija za zaštitu konkurencije Republike Srbije). Specialised department within the Commission i.e. so called the Sector for Assessment of Concentration, has been dedicated to merger control matters and it is in charge of analysing concentrations as well as for preparing draft clearance decisions. The decision-making bodies are either the President of the Commission or the five-member Council (that includes the President of the Commission).
The filing is mandatory in Serbia whenever the merger control thresholds have been met. However, concentrations that are implemented through public takeover of joint stock companies must be notified regardless of the filing thresholds.
The merger control thresholds are turnover-based and there are no exceptions. The Serbian merger control framework does not make any distinction between domestic and foreign transactions or transactions with or without local nexus. The Competition Commission regularly examine foreign-to-foreign transactions where the merger filing thresholds have been met, without applying the “local effects doctrine”.
The 15-calendar day filing deadline runs from conclusion of the transactional agreement, announcement of public bid, or acquisition of control - whichever happens first.
There is a stand-still obligation i.e. an obligation to fully suspend implementation of the concentration prior to obtaining clearance or prior to expiry of the statutory waiting period.
The relevant competition legislation is the Competition Act 89 of 1998 as amended (Act) and the regulations promulgated thereunder. The enforcement agencies are the Competition Commission (the Commission), the Competition Tribunal (the Tribunal) and the Competition Appeal Court (CAC).
The merger provisions of the Act stipulate that when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of a business of another firm (e.g. through the purchase or lease of shares, or through the amalgamation or other combination of the entities), that transaction will constitute a merger.
Where there is a merger, the notification thresholds are met (see below), and the transaction constitutes economic activity within, or having an effect within, South Africa, the merging parties must notify the merger to the competition authorities prior to implementation. Parties to a notifiable merger may not implement the merger before obtaining the requisite approval.
Notably, the Act specifically provides for public interest considerations to be taken into account, in addition to the business and economic efficiency criteria which are used to assess the effect that a merger will have on competition (see further below).
The governing legislation on merger control is Law No.4054 on Protection of Competition and Communique No.2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board (as amended by Communique No.2017/2). In particular, Article 7 of the Law No.4054 governs mergers and acquisitions, and authorises the Turkish Competition Board (the “Competition Board” or the “Board”) to regulate, through communiqués, which mergers and acquisitions require notification to the Turkish Competition Authority (“Competition Authority” or “Authority”) to become legally valid.
The national competition authority for enforcing the Law on the Protection of Competition No. 4054 in Turkey is the Competition Authority, a legal entity with administrative and financial autonomy. The Authority consists of the Competition Board, the Presidency and service departments. As the competent decision making body of the Authority, the Competition Board is responsible for, inter alia, reviewing and resolving merger control filings.
Communiqué No.2010/4 defines the scope of the notifiable transactions as follows:
- a merger of two or more undertakings;
- the acquisition of or direct or indirect control over all or part of one or more undertakings by one or more undertakings or persons, who currently control at least one undertaking, through: (i) the purchase of assets or a part or all of its shares, (ii) an agreement, or (iii) other instruments.
As explained more fully below, Communique No.2010/4 provides turnover thresholds that a given merger or acquisition must exceed before becoming subject to notification. Within these turnover thresholds, there are also specific methods of turnover calculation for certain sectors. Furthermore, Communique No.2010/4 does not seek the existence of an ‘affected market’ in assessing whether a transaction triggers a notification requirement; foreign-to-foreign transactions (cases where the relevant undertakings do not any physical presence in Turkey) are also caught if they exceed the turnover thresholds.
The notification process is mandatory. If the turnover thresholds are met and there is a change of control on a lasting basis, the transaction is subject to approval by the Competition Board. For the sake of completeness, if the turnover thresholds are met, foreign-to-foreign transactions would trigger notification requirement so long as the joint venture is a full-function joint venture.
There is no specific deadline for making a notification in Turkey. There is however a mandatory waiting period: a notifiable transaction is invalid unless the Competition Authority approves it.
The principal law governing the Ukrainian merger control regime is the Law of Ukraine “On the Protection of the Economic Competition” (2001). Other relevant laws and regulations are as follows: the Law of Ukraine “On the Antimonopoly Committee of Ukraine” (1993); Regulation on Filing with the Antimonopoly Committee of Ukraine Applications Seeking a Prior Approval of the Concentration of Business Entities (2002); Methodology Applied to Determine Monopoly (Dominant) Market Position (2002); Rules Applicable to Proceedings on Applications and Cases on Violations of Competition Law (1994); Guidelines on the Calculation of Fines for Violations of Competition Law (2016); and Guidelines on the Assessment of Horizontal Mergers (2016).
The Antimonopoly Committee of Ukraine (AMC) is the primary state authority, which is responsible for the protection of the economic competition.
The merger control notification is mandatory, if the financial thresholds are met. The transaction cannot be completed prior to its approval by the AMC.
All thresholds are calculated on a group-level basis. The thresholds test is applied for the acquirer group and the target group including the seller group. The value of assets and turnover refer to the whole turnover and assets of the parties (not only those related to the relevant product/service market).
Ukrainian competition law contemplates standard (45 calendar days) and simplified (25 calendar days) procedures for the consideration of the merger control notification. If the transaction may lead to a monopolisation and a detailed analysis of the transaction is required, the AMC may initiate a merger investigation (Phase II). Phase II may not exceed 135 calendar days.
The Brazilian Antitrust System is governed by Federal Act No. 12,529/2011. It structures the Brazilian System for Protection of Competition, giving the authority to judge acts of concentration to the Brazilian Administrative Council for the Defense of Competition (CADE). This new law reformulates the system of concentration control, giving that the previous structure, determined by Federal Act. No. 8.884/1994, was quite different from the one in which Brazil operates nowadays.
Before 2012, when the new act came into force, the concentration control could take place only after the act of concentration was concluded. Under the new act, the parties must file notification to CADE before the conclusion of the act of concentration.
Even though the current act has been in effect for only 6 years, it is safe to say the system is active and functional, which contributes for a solid market for mergers.