Peru: Merger Control (4th edition)

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This country-specific Q&A provides an overview to merger control laws and regulations that may occur in Peru.

It will cover jurisdictional thresholds, the substantive test, process, remedies, penalties, appeals as well as the author’s view on planned future reforms of the merger control regime.

This Q&A is part of the global guide to Merger Control. For a full list of jurisdictional Q&As visit

  1. Overview

    In Peru, the Defense of Free Competition has as its main normative base Legislative Decree 1034 - Law of Repression of Anticompetitive Behaviors (hereinafter, LRCA), which establishes an ex post control of anticompetitive conducts, such as abuse of dominant position and horizontal and vertical collusive practices, in order to promote economic efficiency in markets for the welfare of consumers. The National Institute for the Defense of Competition and Protection of Intellectual Property – INDECOPI applies the LRCA in all sectors of the economy, except in the public telecommunications services sector where the Supervisory Body of Private Investment in Telecommunications – OSIPTEL is the entity competent to apply the LRCA.

    Likewise, in terms of defense of competition, in the case of the electricity sector, Peru has ex ante (prior) control of business concentration operations, regulated by Law 26876 – Electricity Sector Anti-monopoly and Anti-Oligopolistic Law – and by the norms that regulate this Law (Supreme Decrees 017-98-ITINCI and 087-2002-EF). However, to date, Peru does not have a general corporate merger control system applicable to all sectors of the economy that allows control of structures in the market.

    In this context, INDECOPI is the agency in charge of the general application of competition policies in the country, including the application of Law N° 26876 – Electricity Sector Anti-monopoly and Anti-Oligopolistic Law (hereinafter, Law N° 26876), through its Commission for the Defense of Free Competition in first instance; and, through the Special Court for the Defense of Competition of the INDECOPI Tribunal, in the second instance of review.

    Currently, in the Congress of the Republic one (1) legislative proposal (hereinafter, the Bill) is under debate to regulate ex ante control of business concentrations in all sectors of the economy, which consensually includes different bills presented by representatives of almost all parliamentary groups, as well as the Government itself. Thus, there are probabilities that the Bill could be approve.

    From now on, we will analyze Law 26876 and its respective regulations, as well as the Bill (in case of approval it would be in force in one year since the date of publish).

  2. Is notification compulsory or voluntary?

    In all cases, the notification is compulsory if the firms have exceeded the thresholds.

  3. Is there a prohibition on completion or closing prior to clearance by the relevant authority? Are there possibilities for derogation or carve out?

    Yes, if all the conditions established by Law for previous control are accomplished, the firms are forbidden to complete the transaction without the authority’s clearance. If the transaction is completed without this clearance, the transaction is deemed null.

  4. What are the conditions of the test for control?

    Law N° 26876 includes all vertical and horizontal concentrations taking place in the generation, transmission and/or distribution activities of the electricity sector. Concentration, according to Peruvian Law, is the realization of any of the following actions: mergers; setting-up of a company in common; direct or indirect acquisitions of control of other companies through the acquisition of stock shares, participation, through any contract or legal act that confers direct or indirect monitoring of a company including joint ventures, association agreements, use of shares or participations, management contracts, shares syndication contracts or any act with an effect akin to a business collaboration contract. Likewise, the acquisition of productive assets of any company that develops activities in the sector; or any other legal act or contract including agreements concluded between competitors, suppliers, clients, shareholders or any other economic operators by which companies, associations, shareholdings, partnerships, trusts or assets in general, are formed or concentrated.

    On the other hand, according to Supreme Decree 017-98-ITINCI, the control test is defined by the regulation established by the Superintendence of Banking, Insurance and AFP (SBS). According to SBS Resolution N° 5780-2015, control is understood as the preponderant and continuous influence in the decision making of the governing bodies of a company. Control is direct when a person or company exercises more than half of the voting power in the general meeting of shareholders or partners of a company, and indirect when a person or company has the power to appoint, remove or veto the majority of the members of the board of directors or equivalent body, to exercise the majority of the votes in the meetings of the board of directors or equivalent body, to approve the operational and/or financial policies, to approve the decisions on dividends and other distributions, to designate, remove or veto the general manager or the manager who is authorized to manage the funds; even if it does not exercise more than half of the voting power in the general meeting of shareholders.

    The Bill has essentially the same test to determine the existence of control.

  5. What are the conditions on minority interest in your jurisdiction?

    Only if the acquisitions confer direct or indirect control over the target company, in terms of the Resolution SBS N° 5780-2015.

    In case of the Bill, the regulation is essentially the same and defines control as the possibility of exerting a decisive and continuous influence on an economic agent through property rights over its assets, rights or contracts that allow influencing decision-making, directly or indirectly determining the competitive strategy of said company.

  6. What are the jurisdictional thresholds (turnover, assets, market share and/or local presence)?

    Under the Electricity Sector Antitrust Law and Regulation, an authorization from INDECOPI (the Peruvian competition agency) is required prior to the acquisition of direct or indirect control of an electrical company, provided that the following conditions are met:

    a) the purchaser and its affiliates or group companies hold – or will hold after the transaction – a concession or authorization for power generation, transmission and/or distribution;

    b) the local market share of the companies involved in the operation (including all affiliates and subsidiaries) amounts to, or exceeds, individually or in the aggregate, either before or after the operation, 15% (for horizontal integration) or 5% (for vertical integration).

    c) the condition is considered fulfilled even if only one of the thresholds set above is met. Market share is determined based on the ratio between total annual revenue of the companies involved in the operation for the year preceding the filing and total annual revenue of all companies engaged in the same electrical activity within the Peruvian Interconnected System. When calculating the ratio, the shares issued outside of Peru by that the companies involved are not considered;

    d) the shares or interest to be purchased i) represent at least 10% of the outstanding capital stock of the relevant company, or ii) provide control over the relevant company; and,

    e) the operation under assessment, either within one of its individual acts or taken as a whole, involves the acquisition, directly or indirectly, by the acquirer of productive assets, amounting to 5% or more of the acquirer's total assets (based on market value at the time of notification).

    According to the Bill, the following thresholds must be met concurrently:

    a) the sum of the value of the annual gross sales or income in the country of the companies involved has a value equal to or greater than 11 000 UIT (one hundred eighteen thousand Tax Units) (approximately, USD 150 millions).

    b) the value of the annual gross sales or income in the country of at least two of the companies involved is equal to or greater than 25 000 (twenty-five thousand Tax Units) UIT each (approximately, USD 31 millions).

    In addition, INDECOPI can propose the update of the threshold. In case of an increase, the modification is approved by Supreme Decree endorsed by the Ministry of Economy and Finance and, if it is a reduction, by Law.

  7. How are turnover, assets and/or market shares valued or determined for the purposes of jurisdictional thresholds?

    The participation market shares of the companies involved in the concentration operation are established according to the total income during the year before the notification date of the companies that undertake the same activities in the Electric Interconnected System (generation, transmission and/or distribution). This information is produced bi-annually by the Energy Sector Supervising Organism (OSINERGMIN). It includes parents and subsidiaries, both owners and companies that are directly or indirectly owned, if they are involved in the relevant activities (i.e. generation, transmission and/or distribution of energy).

    In the case of the Bill, the value of sales will be that corresponding to the fiscal year prior to that in which the concentration operation took place. It should be noted that, when the Bill is approved, the Government will issue a regulation that further develops the criteria for determining the volume of sales.

  8. Is there a particular exchange rate required to be used for turnover thresholds and asset values?

    Law N° 26876 does not have specific provisions on the exchange rate required.

    Also, the Bill does not establish anything in this regard.

  9. Do merger control rules apply to joint ventures (both new joint ventures and acquisitions of joint control over an existing business?

    If through the joint venture no control is acquired, there would be no need to notify the operation to INDECOPI. Nevertheless, as long as the joint venture qualifies as a concentration operation that grants direct or indirect control of a company and the thresholds are exceeded, it will be necessary to notify it to INDECOPI.

    In the case of the Bill, the regulation is essentially the same. In that sense, if it exceeds the concurrent thresholds and, also, implies a change in control or the creation of joint control over a new entity, it must be notified for approval.

  10. In relation to “foreign-to-foreign” mergers, do the jurisdictional thresholds vary?

    No. According to Law N° 26876 and the Bill, the thresholds are the same for all kinds and forms of mergers and acquisitions.

  11. For voluntary filing regimes (only), are there any factors not related to competition that might influence the decision as to whether or not notify?

    Since there is not a voluntary filing regime in Peruvian regulation, this does not apply.

  12. What is the substantive test applied by the relevant authority to assess whether or not to clear the merger, or to clear it subject to remedies?

    The substantive test under Law N° 26876 is whether a proposed merger may have the effect of diminishing, damaging or impeding competition in the generation, transmission and/or distribution of electric power markets.

    To this end, INDECOPI determines the position of companies in the market, the relevant market, the structure of the market, the possibilities of choosing suppliers, distributors and users, barriers to entry, among other criteria.

    Likewise, INDECOPI must evaluate the following aspects:

    a) The improvement of the production and commercialization systems, the promotion of technical progress and the efficiencies that the operation can create within the market and if said contribution is sufficient to compensate the possible restrictive effects on competition.
    b) If the operation produces a significant increase in concentration in the market, significantly limiting competition.
    c) If the operation facilitates the performance of anti-competitive behavior and/or generates barriers to the entry of new competitors.
    d) The possible exclusion effect that competing companies may suffer in the market.

    The Bill also provide the significant impediment of effective competition in the market test so is essentially the same, as the essential criteria to impose remedies. So, the authority must analyze the structure of the market involved, real or potential competition, supply and demand evolution, distribution and marketing sources, barriers to market entry, etc. In addition, the authority must take into account the productive, allocation or innovative efficiencies that the operation may generate. These must meet the following requirements:

    a) They must be proven
    b) They must inherent to the concentration
    c) They should be aimed at compensating for the restrictive effects identified and improving the welfare of consumers
    d) They must be able to be transferred to the consumer
    e) They must be verifiable by the authority.

    The authority will have to prove the possible anti-competitive impacts of the operation, while the parties must prove that the efficiencies they claim meet the stated requirements.

  13. Are non-competitive factors relevant?


  14. Are ancillary restraints covered by the authority’s clearance decision?

    Ancillary restraints are covered by the INDECOPI’s evaluation and decision. They do not require an additional notification, according to Law N° 26876.

    The Bill states the same.

  15. For mandatory filing regimes, is there a statutory deadline for notification of the transaction?

    According to Law N° 26876 and the Bill, the involved undertakings must request regulatory clearance before any corporate and/or commercial transaction is carried out. Without this clearance the referred process will have no legal effect and liabilities are triggered.

  16. What is the earliest time or stage in the transaction at which a notification can be made?

    Law N° 26876 and the Bill stablished that the notification must be made before it is executed, without indicating an earliest time or stage in the transaction. However, the transaction will not take effect if it has not been notified and approved.

  17. What is the basic timetable for the authority’s review?

    The evaluation period of the merger or acquisition shall not exceed 30 working days. The Commission will likely extend the evaluation term for 30 more days if there is additional information to be requested to the Energy Sector Supervising Organism (OSINERGMIN) and/or the petitioner. Recently filed operations were finally decided in a range of 3 to 5 months.

    The Bill establishes a fast track procedure, which allows operations that do not generate doubts about its impact on effective competition to be approved within 30 business days of being notified. If it raises serious concerns, a second phase of 90 business days, extendable for 30 more, will be initiated.

  18. Under what circumstances the basic timetable may be extended, reset or frozen?

    According to Law N° 26876, the basic timetable shall be extended in cases in which the authority needs more information to analyze the possible effects in competition. In these cases, INDECOPI usually requires to the Energy Sector Supervising Organism (OSINERGMIN) and/or the petitioner the needed information.

    According to the Bill, the term to resolve may be suspended for 10 business days, extendable for 5 more, when a public entity must provide information that is essential for the resolution of the procedure.

    The Bill also states that, in the event that the parties submit a proposal for commitments to avoid or mitigate anti-competitive effects, the procedure is suspended until the authority decides on the proposal, for a period of up to 15 business days. This period may be extended by mutual agreement for up to 15 additional business days in the first phase of the procedure and 30 in the second.

  19. Are there any circumstances in which the review timetable can be shortened?


  20. Which party is responsible for submitting the filing? Who is responsible for filing in cases of acquisitions of joint control and the creation of new joint ventures?

    Under Law N° 26876 and the Bill, for mergers, creation of common corporations or joint ventures, the notification must be made by both parties. However, if one corporation acquires the totality of another corporation or part of one or more companies, responsibility for the filing rests with the buyer.

  21. What information is required in the filing form?

    INDECOPI requires the following information to the undertakings, under Law N° 26876:

    a) Identification of the persons or companies that make the notification and of others that also intervene in the operation.
    b) Description of the ownership and control structure, as well as the kinship and management links of each of the participants and between these and third parties that also operate in the electricity sector, including that of the companies that belong to the same economic group.
    c) Information regarding the affected markets: geographical scope, existing degree of competition, ease or difficulty of access to the market, among others.
    d) Description of the details of the operation and its effects on the market, as well as the economic efficiencies generated.

    Additionally, INDECOPI may request the information it deems pertinent.

    According to the Bill, the authorization request must be accompanied by the necessary background to identify the operation, the participating companies and their economic group. A preliminary analysis of the possible effects on competition must also be presented. The regulation issued after the approval of the Bill may add additional requirements. Additionally, INDECOPI may request the information it deems pertinent.

  22. Which supporting documents, if any, must be filed with the authority?

    INDECOPI requires a copy of the documents related to the closing of the operation, as well as a copy of the analysis or studies of the conditions of competition, the competitors and the market situation.

    Notwithstanding this, all the information presented by the parties constitutes a declaration under oath.

  23. Is there a filing fee? If so, please specify the amount in local currency.

    The filling fee is the 0.1% of the concentration operation’s value, up to a limit of 50 UIT (approx. USD 70,000).

    In the case of the Bill, the fee will be established after its eventual approval through a Supreme Decree issued by the Government.

  24. Is there a public announcement that a notification has been filed?

    No, according to the Law N° 26876.

    According to the Bill, INDECOPI must publicize the notified operation in media.

  25. Does the authority seek or invite the views of third parties?

    INDECOPI may request from third parties the information it deems necessary to analyze the authorization request, as well as its opinions on the merits when dealing with public entities specialized in the regulation of the markets that are being evaluated.

  26. What information may be published by the authority or made available to third parties?

    Third parties can only have access to the information when the procedure ends. However, the information that qualifies as confidential can only be known by INDECOPI and the party that submitted it.

  27. Does the authority cooperate with antitrust authorities in other jurisdictions?

    It is possible that the authority can cooperate with antitrust authorities in other jurisdictions.

  28. What kind of remedies are acceptable to the authority? How often are behavioural remedies accepted in comparison with major merger control jurisdictions, such as the EU or US?

    Neither Law N° 26786 nor the Bill state what remedies or kind of remedies are acceptable to authorize the merger or acquisition.

  29. What procedure applies in the event that remedies are required in order to secure clearance?

    Law N° 26876 does not provide for a specific procedure if remedies are required. In practice, INDECOPI grants a deadline for the parties to adopt the proposed remedies if they agree. If they do not agree or they not adopted it within the term, the authorization is denied.

    The regulation under the Bill is essentially the same. However, the Bill also states that if the authorization is subject to conditions, they must be reviewed within a certain period of time in order to determine whether it is necessary to maintain, eliminate or modify them. This review may also occur due to a variation in the conditions of competition or at the request of the parties.

  30. What are the penalties for failure to notify, late notification and breaches of a prohibition on closing?

    Law N° 26876 sanctions with a fine of up to 500 UIT (approx. USD 636 000) for failure to notify. There is also a fine of up to 10% of the sales or gross income of the previous year when a concentration operation is carried out without notifying INDECOPI, when it has not been approved, or without adopting the proposed remedies.

    According to the Bill, failure to submit an application for authorization qualifies as a minor offense and is penalized with a fine of up to 500 UIT (approx. USD 636 000). Executing the concentration operation before submitting it to the control procedure or issuing the corresponding resolution is considered a serious infraction and is sanctioned with a fine of up to 1000 UIT (approx. USD 1.2 million).

  31. What are the penalties for incomplete or misleading information in the notification or in response to the authority’s questions?

    Law N° 26876 sanctions with a fine of up to 500 UIT (approx. USD 636 000) when inaccurate data has been provided to the authority.

    According to the Bill, Failure to provide the required information or the presentation of incomplete, incorrect, adulterated, misleading or false information are considered very serious infractions, and may be penalized with fines greater than 1000 UIT (approx. USD 1.2 million), up to a maximum of 12% of gross income received by the offender or its economic group the year prior to the issuance of the resolution that decides to impose the fine.

  32. Can the authority’s decision be appealed to a court? In particular, can third parties who are not involved in the transaction appeal the decision?

    The decision is taken in the first instance by the Commission for the Defense of Free Competition of INDECOPI, which can authorize the operation, condition its authorization to the adoption of certain remedies or deny it. This can be appealed before the Special Court for the Defense of Competition of the INDECOPI Tribunal, this is part of the administrative procedure.

    The decision issued by the Court, when it is final, may be challenged before the judiciary, following a contentious administrative process, this institution may annul the ruling in administrative headquarters by INDECOPI.

  33. What are the recent trends in the approach of the relevant authority to enforcement, procedure and substantive assessment?

    Being limited to the electricity sector, there are not enough authorization requests to define any trend in the practice of INDECOPI. However, it is important to note that during the last three years every transaction has been unconditionally approved by the INDECOPI.

  34. Are there any future developments or planned reforms of the merger control regime in your jurisdiction?

    As indicated above, there is currently a bill that has already been approved by the Congress of the Republic, which seeks to establish a procedure for prior authorization of concentration operations for all economic sectors. Currently, a specific aspect of this Bill is pending for final debate in Congress. The most important aspects of this Bill have been reviewed in the previous answers.