For voluntary filing regimes (only), are there any factors not related to competition that might influence the decision as to whether or not notify?
As mentioned above, merger filing is only required when the relevant jurisdictional thresholds have been satisfied.
Having said the above, there is also the concept of voluntary filing in China, but this concept is different from other jurisdictions. In China, voluntary filing shall only refer to situations where a business operator, on its own initiative, notifies of a concentration transaction that does not reach the merger filing thresholds.
While notification to the CCPC is mandatory for transactions that meet the turnover-based thresholds, the Competition Act also provides for voluntary notifications that fall below the jurisdictional thresholds.
The CCPC's policy is to seek to prevent the implementation of mergers or acquisitions that would substantially lessen competition in any market in the State and this applies equally to transactions that do not meet the financial thresholds for mandatory notification. In practice, where the CCPC becomes aware of a non-notifiable transaction that raises potential concerns, it will contact the parties to the transaction to request further information and, if necessary, request the parties to voluntarily notify the transaction to the CCPC under the merger control regime.
If the parties refuse to do so and the CCPC's concerns have not been allayed, the CCPC can proceed to open an investigation into whether the transaction would breach the prohibition in the Competition Act on anti-competitive arrangements between undertakings. It has the open of issuing civil proceedings seeking declaratory and/or injunctive relief in this regard.
The FTC and DOJ do not accept voluntary filings.
If the JV between competitors is not formally covered (or not expressly covered) by merger control rules, the parties to such JV are entitled to make a voluntary filing in order to check whether it might affect competition on the market or in order to clear certain contractual provisions. This option is quite reasonable for JVs since in the absence of clearance, the JV might be later reviewed by the FAS as a cartel. Consequently, if the JV is cleared by the authority, the abovementioned accusation cannot be applied.
Also please be informed that Russian law provides for the general possibility to clear the draft agreement containing certain anticompetitive clauses with the FAS.
Whether or not to notify voluntarily a merger to the CMA is a question to be determined by a commercial risk assessment. The parties are likely to view the risks differently, but the following points can be made.
On the one hand there is the question whether the merger raises any competition concerns, and if so whether they are likely to elicit complaints from customers/competitors and/or are of sufficient magnitude that a second-phase investigation is a realistic prospect. The CMA can open such an investigation at any time up to four months from the date of completion of the transaction, or from the date on which facts about the transaction became public (e.g. when it is announced, or when it receives significant press coverage in the national or trade press), whichever is the later. Acquirers effectively face the risk of the CMA opening an investigation on its own initiative if transactions are not made 'sufficiently public'; this was underlined by a case involving Tesco's acquisition, through a nominee company, of a single grocery store operated under the Brian Ford fascia, which resulted in a first-phase review being commenced almost five years after the transaction completed.
On the other hand, there is the desire for legal certainty. If the parties and their advisers consider that the risk of a reference is low, the parties may decide not to notify. Equally, the parties may take the view that the transaction is low-profile enough to escape the CMA's attention (notwithstanding the CMA's dedicated mergers intelligence unit that monitors various sources of information). Or the parties may take the risk that, even if the CMA hears about it, a second-phase investigation is unlikely. However, the interests of the purchaser may be better served by insisting upon a notification being made, backed up by clearance being a condition of closing. The potential consequences for a purchaser of completing a transaction without having obtained prior clearance are set out above.
Finally, for takeovers of publicly listed companies, the UK City Code on Takeovers and Mergers requires that any offer for a public company must lapse in the event of a second-phase investigation by the CMA, or the initiation of in-depth proceedings by the European Commission under the EU Merger Regulation. Consequently, if the CMA has jurisdiction to review an offer, the bidder will often opt to notify it to the CMA for clearance.
Small mergers are not subject to mandatory notification. However, the parties to a small merger may notify voluntarily prior to implementation. This might be done for the sake of certainty where it is anticipated that the Commission may invoke its right to call for a small merger notification within 6 (six) months of implementation.
The Commission has published a guideline on small merger notification in terms of which parties to small mergers are advised to inform the Commission of a proposed transaction in circumstances where either party (or a part of its group of companies) are being investigated by the Commission or are a party to any Tribunal proceedings in regard to prohibited practices. The Commission will then advise the parties as to whether the transaction should be notified as a small merger.
Mexico is a jurisdiction where transactions that do not meet with statutory requirements for merger control, can be notified on a voluntary basis. However, when making a voluntary notification, scrutiny from the competition agencies could be expected to be lighter considering that the transaction will not have a substantial impact, but the procedure and applicable rules will remain the same.
The decision of whether or not to notify the ACCC can be influenced by factors unrelated to competition. In particular, if a transaction requires FIRB approval under Australia’s foreign investment laws, parties typically also notify the ACCC (at least as a courtesy) because it is standard practice for FIRB to seek comments from the ACCC on transactions it reviews – that is, the transaction would come to the ACCC for review regardless.