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

Merger Control (2nd Edition)

Portugal Small Flag Portugal

The Competition Act does not distinguish between national and foreign-to-foreign mergers (with connection to the Portuguese territory, e.g. with direct or indirect sales to the Portuguese territory), nor does the decisional practice of the PCA. Therefore, foreign-to-foreign mergers that are caught by the Competition Act are subject to the same obligations and consequences (e.g. fines may apply and the relevant agreements may be declared null and void).

Greece Small Flag Greece

Merger control requirements apply to all transactions meeting the notification jurisdictional thresholds (as outlined in 3.2 (“Summary of the jurisdictional thresholds”) above), thus foreign-to-foreign transactions may be also captured by the merger control regime. Accordingly, the same fines are also imposed in foreign-to-foreign transactions for failing to notify, subject to the provision that the concentration has an effect in Greece.

United Kingdom Small Flag United Kingdom

The jurisdictional thresholds do not vary according to whether the transaction is 'foreign-to-foreign' (i.e. whether the legal entities acquiring and being acquired are all located outside the UK).

Italy Small Flag Italy

No, the same jurisdictional thresholds apply. Apparently, in light of the new jurisdictional thresholds, the creation of a concentrative joint venture, which will not operate in Italy, by parent companies that meet the cumulative thresholds, seems to be reportable to the ICA, despite the (potential) lack of local nexus.

United States Small Flag United States

Under the HSR Act, an entity is deemed to be foreign if it is not incorporated in the US, is not organized under the laws of the US, and does not have its principal offices in the US.

Foreign-to-foreign transactions can trigger an HSR filing if they exceed the filing threshold and are not exempt. There are certain exemptions that are specifically applicable to ‘foreign-to-foreign’ transactions.

The threshold values listed below are as of February 2017 and are adjusted annually.

The acquisition of foreign assets is exempt, unless the assets to be held as a result of the acquisition generated sales in or into the US greater than US$80.8 million during the acquired person’s most recent fiscal year. If both the acquiring person and acquired person are foreign, an asset acquisition that exceeds that $80.8 million threshold may still be exempt if (1) the aggregate sales in or into the US of the acquiring person and acquired person are less than US$177.7 million in their respective most recent fiscal years, (2) the aggregate total US assets of the acquiring and acquired persons are less than US$177.7 million and (3) the acquiring person will not hold assets or voting securities of the acquired person that exceed US$323 million as a result of the transaction.

Voting Securities
An acquisition of voting securities of a foreign issuer by a foreign person is exempt unless (1) the transaction confers control of the foreign issuer by the foreign person (i.e., if, as a result of the acquisition, the acquiring person will hold 50% or more of the voting securities of that issuer or will have the contractual right to designate 50% or more of the board of directors), and (2) the foreign issuer, along with any entity it controls, hold US assets with a fair market value of more than US$80.8 million, or made aggregate sales in or into the US of over US$80.8 million in its most recent fiscal year. Even if the US sales or assets threshold are met, the acquisition of control of a foreign issuer by a foreign person may still be exempt if (1) the aggregate sales in or into the US of the acquiring person and acquired person are less than US$177.7 million in their respective most recent fiscal years, (2) the aggregate total US assets of the acquiring and acquired persons are less than US$177.7 million and (3) the acquiring person will not hold assets or voting securities of the acquired person that exceed US$323 million as a result of the transaction.

Germany Small Flag Germany

A transaction that is initiated outside of the geographical area of the Federal Republic of Germany and that does not affect competition in the country (“reiner Auslandszusammenschluss”) will not trigger an obligation to file.

German merger control applies to foreign-to-foreign mergers if the merger has a significant (“spürbar”) domestic impact on competition. While the basic criteria, the impact on the market in Germany, is written law, its interpretation is still not completely clear. Furthermore, German courts determine the significance of a specific impact on a case-to-case basis. Based on the decisional practice of the Federal Court of Justice, market shares as low as an addition of 4.4 and 0.14% and 3.5 and 0.23% may constitute sufficient impact. The necessary domestic activities are, therefore, very low.

If a foreign-to-foreign merger is caught, the thresholds are the same. From a commercial point of view, the risks of not filing usually outweigh the costs by far, when in doubt. Not only may implementing a merger without proper clearance (“gun jumping”) lead to significant fines. Under German civil law, the transaction and all agreements made aiming to implement the merger may be found legally void. This causes a significant degree of legal uncertainty, especially as, different from penal law, there is no statute of limitation for this consequence.

Japan Small Flag Japan

There are no special thresholds or treatments for foreign-to-foreign transactions. Even if all relevant parties of a transaction are located outside Japan, the same standard of thresholds for domestic parties will apply to the transaction.

Austria Small Flag Austria

According to the effects doctrine, all concentrations having effects on the Austrian market are subject to the Austrian merger control regime. As the relevant criterion is the effect on the Austrian market, no local presence and not even sales into Austria are required. Therefore, in principle, also foreign-to-foreign mergers have to be notified if they exceed the mentioned thresholds and have an effect on the Austrian market.

However, particularly where the target has no turnover in Austria and the market(s) it is active on do not comprise Austria, there are arguments that there is no relevant effect and hence no notification obligation.

According to jurisprudence, there was no obligation to notify a merger where a foreign target company did not offer and in the foreseeable future would not offer any services in Austria. Furthermore, no other resources such as know-how, patents and so on, which could contribute to a noticeable increase in the market share of the acquirer, were part of the transaction. Also, the financial strength alone was found to constitute a rather indirect effect, which (as such) does not constitute a sufficient effect on the Austrian market. In one leading case, an Austrian bank was not obliged to notify the acquisition of a Czech and Slovak credit institute. The target companies were neither actual nor potential players on the Austrian market. On the other hand, in a different case, it was held that the acquirer was gun-jumping where the target company did not generate any turnover in Austria due to an increase in the financial strength in combination with the (increased) access possibilities to sales markets, the distribution network and the trade mark of the target company.

It may also be noted that the BWB essentially has a very strict view regarding the effects doctrine, which it has also published on its website (

Canada Small Flag Canada

The thresholds are the same regardless of where the parent entities acquiring and being acquired are located. Because: (i) the thresholds refer to assets in Canada and revenues generated either “in, from or into Canada” (for the ‘size of parties’ threshold) or “in or from Canada” (for the size of transaction threshold); and (ii) a transaction must involve an operating business in Canada (i.e., a business undertaking in Canada to which employees employed in connection with the undertaking ordinarily report for work) to be subject to Canada’s merger control regime, there must be some nexus to Canada before a foreign-to-foreign merger is caught by the Canadian merger control regime.

Chile Small Flag Chile

Jurisdictional thresholds do not vary in relation to “foreign-to-foreign” operations of concentration.

Cyprus Small Flag Cyprus

“Foreign-to-foreign” mergers are caught by the Cypriot merger control regime, where these are concentrations of major importance, namely where they satisfy the jurisdictional thresholds.

Cyprus law does not distinguish between concentrations which have an impact on the market locally and those which do not, nor are the thresholds satisfied in a different manner. From a local nexus perspective, it suffices that the undertakings concerned achieve a turnover in Cyprus (provided the turnover thresholds are met).

It is thus often the case that transactions that are not directly related to the competitive market in Cyprus, are caught by Cypriot merger control.

As is the case with all concentrations caught under Cyprus merger control, where a “foreign-to-foreign” is either partially or entirely implemented prior to the clearance of the CPC, administrative sanctions may be imposed by the CPC.

An administrative fine of up to ten per cent (10%) of the aggregate turnover achieved by the notifying undertaking during the immediately preceding financial year may be imposed on the notifying undertaking for the discussed infringement, which may be followed by additional administrative fines of €8,000 for each day the infringement persists.

Denmark Small Flag Denmark

“Foreign-to-foreign” transactions, i.e. where the legal entities acquiring and being acquired are all located outside Denmark, are equally caught by Danish merger control rules in so far as the merging parties meet the Danish turnover thresholds in Denmark.

EU Small Flag EU

The EUMR applies to all transactions that meet the jurisdictional test. For transactions with little or no nexus to the EU, the Commission can grant waivers from the obligation to provide information in the notification form, but this needs to be discussed with the case team.

France Small Flag France

No. There is no specific provision on foreign-to-foreign mergers.

Malta Small Flag Malta

Under Maltese law, there is no distinction between local and foreign-to-foreign transactions. The latter are caught by Maltese law if the minimum threshold requirements of turnover arising in Malta are met.

Norway Small Flag Norway

The jurisdictional thresholds are the same for “foreign-to-foreign” mergers as for mergers involving Norwegian companies. However, a guidance paper published by the NCA indicates that the NCA is of the view that foreign-to-foreign transactions without any possible effect in Norway (even if the notification threshold are fulfilled, e.g. through sales to Norway) may fall outside the territorial scope of the Norwegian Competition Act.

Romania Small Flag Romania

The jurisdictional thresholds do not vary according to whether the transaction is "foreign-to-foreign". In case the jurisdictional thresholds are met, failure to obtain the Competition Council’s prior clearance may entail the application of sanctions according to Competition Law no. 21/1996 (even in the cases where the use of a simplified notification form is allowed by the law).

Serbia Small Flag Serbia

KN: The filing is mandatory and there are no legal exemptions to the notification obligation under the applicable legal regime in Sebria. The Serbian competition law does not make any distinction between domestic and foreign transactions or transactions with or without local nexus. The absence of local effect is not a mitigating element for a concentration to be non-notifiable in Serbia. The local competition authority regularly examines transactions where the merger filing thresholds have been met, without applying the “local effects doctrine”.

If there are no significant horizontal overlaps or vertical links between the parties on the relevant market in Serbia, the filing would qualify for a short-form.

South Africa Small Flag South Africa

The jurisdictional thresholds do not vary according to whether the transaction is "foreign-to-foreign" (i.e. where the legal entities acquiring and being acquired are all located outside South Africa). Please refer to the “local presence” discussion in “Summary of the jurisdictional thresholds” above.

Turkey Small Flag Turkey

Foreign-to-foreign mergers are covered by Law 4054 on Protection of Competition to the extent that they affect the relevant markets within the territory of Turkey. Regardless of the parties’ physical presence in Turkey, sales in Turkey may trigger the notification requirement to the extent that the turnover thresholds are met. Article 2 of Law 4054 sets out the effects criterion – that is, whether the undertakings concerned affect the goods and services markets in Turkey. Even if the undertakings concerned have no local subsidiaries, branches or sales outlets in Turkey, the transaction could still be subject to Turkish competition legislation if the goods or services of the participating undertakings are sold in Turkey and the transaction would thus affect the relevant Turkish market. In 2016, 107 transactions notified to the Board were foreign-to-foreign transactions

The likelihood that the Board learns about a transaction is high as the Board vigorously follows mergers and acquisitions in the local and international press and also closely follows the case practice of the European Commission and other important competition authorities. It may also examine the notifiability of past transactions in the context of a new notification.
The Board has imposed in around 60 cases a fine of 0.1% of the undertaking’s turnover, for either closing the transaction prior to clearance or not notifying the transaction at all.

  • The highest gun jumping fine so far was approx. 1 million USD (Simsmetal/Fairless, 16.09.2009, 09-42/1057-269). This concerned a foreign-to-foreign transaction. It was not discovered by the Authority but was notified by the parties after closing.
  • There are several other foreign-to-foreign transactions where fines were imposed. See e.g. Longsheng 02.06.2011, 11-33/723-226; CVRD Canada Inc., 08.07.2010, 10-49/949-332; Flir Systems Holding/Raymarine PLC, 17.06.2010, 10-44/762-246; Georgia Pacific Corporation, Fort James Corporation, 29.12.2005, 05-88/1219-352.
  • There is to the knowledge of local counsel no fining decision concerning a foreign-to-foreign transaction involving a joint venture/target without activities or turnover in Turkey.

Ukraine Small Flag Ukraine

“Foreign-to-foreign” mergers (including the transactions with JVs) require a merger control clearance, if the above thresholds are met. In such case, the parties may file a merger control notification with the AMC within the framework of the simplified procedure (see our answer to question 5.4 for details of such procedure).

Brazil Small Flag Brazil

No, the thresholds do not vary, but it must be noted that Brazil will only analyze acts of concentration that generate or may reasonably generate impact in Brazil.

Australia Small Flag Australia

The CCA also applies to transactions occurring entirely outside Australia where a person, as a consequence of acquiring a controlling interest in a body corporate outside of Australia, acquires a controlling interest in a corporation carrying on business in a market in Australia.

As a practical matter, foreign-to-foreign transactions that may raise competition concerns in Australia should therefore be notified to the ACCC in the same way as any other merger. The same Notification Threshold applies.

Ecuador Small Flag Ecuador

The jurisdictional thresholds do not vary according to whether the transaction is 'foreign-to-foreign' or 'local-to-local' under the LORCPM.

Updated: April 24, 2018