How are turnover, assets and/or market shares valued or determined for the purposes of jurisdictional thresholds?
Merger Control (3rd edition)
The sales that must be considered for the purposes of jurisdictional thresholds are the ones corresponding to the financial year preceding the operation.
When calculating the parties’ turnovers in Chile, the turnover in Chile of their entire group companies should be taken into account. This is different in case of an acquisition. In such cases the relevant turnover is the turnover of the company acquired and its subsidiaries or the assets acquired, as the case may be. The turnover of the seller is therefore not relevant.
DL 211 and the FNE’s Guidelines regarding the application of the thresholds state that the following items shall be excluded from the calculation of the thresholds indicated above: (i) special taxes (such as VAT, customs tariffs, taxes on alcoholic beverages, tobacco tax, etc.); (ii) discounted amounts from the sale price, such as sales or volume discounts; (iii) turnover generated by internal group sales; and (iv) sales not related to the exploitation of the ordinary business of the economic agents involved in the transaction or of its related persons.
The FNE’s Guidelines regarding the application of the thresholds also establishes the geographical assignation of sales, how group turnover should be established, and special rules for financial institutions, insurance companies, investment funds and public entities.
Regarding the geographical assignation of sales, the FNE’s Guidelines state that, as a general rule, the relevant criterion is the location of the customer at the moment the relevant sales agreement was entered into, regardless of the country where the agreement was concluded. This, as the location of the customer at the moment of the agreement’s celebration usually coincides with the place where the service or the product is finally provided. The Guidelines indicate that there are cases where the geographical allocation may be determined by other factors. For instance, in the case of supply of goods the location of the customer at the time of the subscription of the agreement may be different than the place where the product is delivered. In such case, the final place of delivery prevails over the location of the customer. Similarly, in the case of provision of services, it should prevail the place where the service is provided, regardless of where it is billed or where the client was located at the time of the conclusion of the contract.
As explained above, the jurisdictional thresholds under Turkish merger control regime are solely based on the turnover figures of the Parties. In other words there are no assets and/or market share based jurisdictional threshold. To that end, turnover consists of “the net sales realized at the end of the financial year preceding the date of the transaction according to the uniform chart of accounts, or if the calculation thereof is not possible, the net sales realized at the end of the closest financial year from the date of the transaction”. Captive/internal sales should be excluded.
Article 8 of Communiqué No. 2010/4 sets out detailed rules for turnover calculation. In short:
- The turnover of the entire economic group, including the undertakings
controlling the undertaking concerned and all undertakings controlled by
the undertaking concerned, will be taken into account.
- When calculating turnover in an acquisition transaction, only the turnover
of the acquired part will be taken into account with respect to the seller.
- The turnover of jointly controlled undertakings (including joint ventures) will be divided equally by the number of controlling undertakings.
- Multiple transactions between the same undertakings realized over a period of two years are deemed as a single transaction for turnover calculation purposes. They warrant separate notifications if their cumulative effect exceeds the thresholds, regardless of whether the transactions are in the same market or sector or not and whether they were notified before or not.
Transactions that are closely connected in that they are linked by conditions or take the form of a series of transactions in securities taking place within a reasonably short period of time are treated as a single concentration (interrelated transactions theory).
On the matter of geographic allocation of turnover, unlike the EU legislation (i.e. para. 195-203 of the Consolidated Jurisdictional Notice), the Turkish merger control regime does not include any specific provisions regarding the geographic allocation of turnover. Also, the Board does not have any specific precedent directly on point concerning the geographic allocation of turnover. One decision that discusses geographic allocation of turnover concerns Air Berlin Plc./Intro (4.7.2007, 07-56/661-230) which suggests that “the location of the customer at the time of the transaction” is taken into consideration in assessing whether the revenue is attributable to Turkey.
There are also specific methods of turnover calculation for certain sectors.
These special methods apply to banks, special financial institutions, leasing companies, factoring companies, securities agents and insurance companies.
The aggregate turnover of a party participating in the merger is calculated on the basis of the company’s latest audited annual account.
The aggregate turnover in Denmark includes the net turnover from the sale of goods and services to customers who resided in Denmark at the time of the sale. Any turnover from intra-group sales, however, is excluded.
The DCCA follows the general EU principles for accounting measures for valuation of assets.
The relevant turnover for the purposes of the Competition Act thresholds is the total turnover in the State of the undertakings involved in their most recent financial year (which is generally interpreted by the CCPC, in line with the practice of the European Commission, as being the most recent year for which audited accounts are available).
While there is no statutory definition of “turnover in the State”, the CCPC has interpreted it to mean the value of services provided or sales made to customers located in the Republic of Ireland in the relevant year. Thus, turnover of companies booked as Irish turnover for accounting/tax purposes but which do not derive from sales to customers in Ireland would typically be excluded from the turnover calculation. The CCPC consider that this approach applies equally to the turnover of credit and financial institutions and, therefore, it does not follow the approach under the EUMR to the geographic allocation of turnover of such institutions.
Acquisitions of assets are potentially caught by the Competition Act. The relevant turnover in that case is the Irish turnover attributable to the target assets in the most recent financial year, such as, in the case of the acquisition of a building, its rent roll in that period.
Turnovers comprise the amounts derived from the sale of products and the provision of services by the undertakings concerned during the preceding financial year and corresponding to the ordinary activities of the undertakings, after deduction of sales rebates, of value added tax and other taxes directly related to turnover.
Turnovers are calculated for groups of undertakings and are derived from the last audited financial statements of each of the undertakings concerned (or consolidated financial statements at a group level).
In calculating turnover in relation to banks and insurance companies, the following calculation methodology shall respectively apply:
- for a bank or other credit institution, the one tenth of the balance sheet of the last financial year
- for an insurance company the value of the gross premiums during the last financial year which shall comprise all amounts received or receivable in respect of insurance contracts concluded by it or on its behalf, including outgoing reinsurance premiums and after deduction of taxes and parafiscal contributions or levies charged by reference to the amounts of individual premiums or the total volume of premiums.
The value of assets also derives from the last audited financial statements of each of the undertakings concerned. (or consolidated financial statements at a group level).
The market share percentage of each of the undertakings concerned is calculated by accountants after defining the relevant product and geographic market.
Consistently with EU competition law, turnover includes the amount derived in the last financial year from the sale of products or provision of services (to customers located) in Italy. Turnover does not include intra-group sales, sales rebates, value added tax and other taxes directly related to it.
Special rules apply to banks, financial institutions and insurance companies. Pursuant to Art. 16(2) of the Law, the turnover of banks and financial institutions corresponds to one-tenth of their total assets, excluding memorandum accounts; while the turnover of insurance companies is equal to the total value of the collected premiums.
The turnover of the acquiring company corresponds to that of the entire group to which it belongs. The turnover of the target company does not include that of the seller.
The relevant turnover for the assessment of the notification requirement will be the ‘annual turnover’ in the preceding fiscal year. This is the case even if it is clear that the turnover in the current fiscal year will be higher (or lower) due to "organic" growth or decline. On the other hand, this turnover shall be adjusted to take into account any mergers or de-mergers that took place before the concentration, but after the precedings fiscal year was closed.
Only turnover in Norway is relevant for calculating the thresholds. Allocation of turnover is done in the same manner as under the ECMR and in line with the Commission's Consolidated Jurisdictional Notice. Consequently, the turnover is generally allocated to the country where the product is actually delivered or where the service is actually provided. Where products and services are delivered or provided in Norway, the turnover generated from those products and/or services must therefore be allocated to Norway, regardless of the fact that the headquarters or offices of the seller and/or the buyer are located elsewhere.
Section 3(f) of the PCA IRR provides that for purposes of calculating notification thresholds:
- The aggregate value of assets in the Philippines shall be as stated on the last regularly prepared balance sheet or the most recent audited financial statements in which those assets are accounted for.
- The gross revenues from sales of an entity shall be the amount stated in the last regularly prepared annual statement of income and expense of that entity.
As a general rule, turnover and book value of assets are determined on a world-wide basis. For the purpose of calculating the book value the consolidated balance sheet of the parties to the transaction may be used.
The criterion of a market share as a trigger event was abolished. Therefore, the filing requirements are not somehow connected with the market shares of the entities involved in the transaction.
Turnover calculations under French law are fully consistent with the principles set forth in the EUMR. The Code expressly refers to Article 5 of the EUMR for the determination of the relevant turnover, which corresponds to the pre-tax turnover generated through the sale of goods or provision of services to third parties (intra-group sales are not taken into account) during the last audited financial year.
As far as acquisitions are considered, the relevant parties whose turnovers are to be taken into consideration are the acquirer(s) of exclusive / joint control and the target. Regarding mergers, the turnovers of the merging entities are relevant.
The turnover of the acquiring or merging entity(ies)is calculated by taking into account the whole group which the entity(ies) respectively belongs to, i.e. without being limited to the legal entity(ies) directly involved in the transaction or the economic sector(s) relevant to the transaction. With respect to the target, only the turnover generated by the acquired scope is taken into account (the turnover generated by the group divesting the target is thus not relevant).
The geographic allocation of the turnover is determined, as a matter of principle , by the location of the customers of products sold and services provided by the undertakings concerned, irrespective of said entities nationality or location, and whether or not they have assets or a structure in France, provided that they generate a turnover therein. .
A schedule to the Act deals with the Method of Calculation (the “Schedule”), which provides that the asset value of a firm must be calculated in accordance with IFRS. More specifically, the Schedule provides that for threshold purposes, the asset value of a firm at any time is based on the gross value of the firm’s assets as recorded on the firm’s balance sheet for the end of the immediately previous financial year, subject to other specific provisions. The thresholds relate only to assets in South Africa and, in this regard, among other provisions, the Schedule states that assets in South Africa includes all assets arising from activities in South Africa. In short, it is typically the gross asset value as included on the firm’s balance sheet as at the end of the most recent financial year.
Importantly, as far as the other specific provisions are concerned, the Schedule also provides, broadly, that if between the date of the financial statements being used to calculate the asset value of a firm, and the date on which that calculation is made, the firm has acquired any subsidiary company, associated company or joint venture not shown on those financial statements, or divested itself of any of these, then the value of the recently acquired assets must be added to the asset value or, conversely, the value of the recently divested assets must be deducted. Simply put, recent acquisitions or divestitures must be added, or deducted, as the case may be, to get to the correct asset value.
In terms of the Schedule, the annual turnover of a firm at any time is the gross revenue of that firm from income in, into or from South Africa, arising from the following transactions/events as recorded on the firm’s income statement for the immediately previous financial year:
- the sale of goods;
- the rendering of services; and
- the use by others of the firm’s assets yielding interest, royalties and dividends.
In short, the turnover is typically that of the firm, as reflected on its income statement as gross revenue, as at the most recent financial year-end.
Under the HSR Act and associated rules, the process of determining a transaction’s value depends on whether voting securities, non-corporate interests, or assets are being acquired.
The threshold values listed below are as of February 2018 and are adjusted annually.
For an asset acquisition, the transaction value is determined by looking at the fair market value (FMV) or, if higher, the acquisition price. FMV is determined by the board of directors of the acquiring person or its delegee within 60 calendar days of the filing (or if a filing is not necessary, 60 calendar days prior to closing). There is no specific accounting technique that the board of directors is required to use; however, the determination must be made in good faith. The acquisition price is equal to the total amount of consideration that the seller receives in the transaction. If the acquisition price is not known, the value of the transaction will be FMV.
The acquisition of non-US assets is exempt, unless, in the aggregate, the non-US assets to be held by the acquiring person as a result of the acquisition generated sales in or into the US of greater than US$84.4 million in the acquired person’s most recent fiscal year.
For an acquisition of voting securities of a US entity, the value is based on the value of the voting securities that will be held as a result of the transaction. If the voting securities are publicly traded, the value of the shares to be acquired is the greater of the acquisition price or market price. If the acquisition price is undetermined, publicly traded voting securities are valued based on market price. For open market purchases, tender offers, conversions, or exercises of options or warrants, market price is determined based on the lowest closing stock quotation during the 45 calendar days prior to closing. For transactions subject to an agreement or letter of intent, market price is determined by looking at the lowest closing stock quotation within the 45 calendar days before closing but not earlier than the day before execution of the agreement or letter of intent. If both the acquisition price and market price are undetermined, the value of the voting securities is their FMV.
If the voting securities are not publicly traded, the value of the privately held voting securities is either the acquisition price, if determined, or the FMV if the acquisition price is not determined.
An acquisition of voting securities of a non-US entity by a US person is exempt, unless the non-US entity and any entity it controls has US assets with a FMV greater than US$84.4 million, or made sales in or into the US of greater than US$84.4 million in its most recent fiscal year. An acquisition of voting securities of a non-US corporation by a non-US person is exempt unless the same thresholds are met, and the transaction confers control of the non-US corporation.
For an acquisition of non-corporate interests in a transaction that will confer control of a non-corporate entity, the value is based on the acquisition price, if determined, or the FMV if the acquisition price is not determined.
The decisive factors are the amounts derived by the undertakings concerned from the sale of products and the provision of services within the ordinary business activities of the undertakings concerned in the preceding financial year. All reductions such as discounts, rebates, value added tax and other consumption taxes as well as other taxes directly related to turnover are to be deducted.
Financial years that do not cover a full twelve month period shall be converted to a full twelve month period based on the average turnover of the recorded months.
For participating companies, turnovers consist of the turnover from its own business activities and the turnover of subsidiaries, parent companies, sister companies and joint venture companies (in this case, the sales are to be allocated equally to the participating companies). The turnover from business activities between these undertakings (intra-group turnovers) shall not be taken into account.
In the case of insurance companies, turnover is replaced by "annual gross insurance premium income". In the case of banks and other financial intermediaries, turnover is replaced by "gross income".
The relevant timeframe is the last fiscal year of the undertakings in question. VAT and intragroup turnover will not be taken into account.
For Germany, the allocation rules are similar to those of the European Union. Therefore, the general rule is that turnover should be attributed to the place where the customer is located. For financial institutions, the turnover is to be allocated to the branch or division established which receives this income.
If undertakings that are active in certain industries are involved in the merger, the actual turnover is multiplied or divided to determine the value used in the threshold test. A multiplier of eight is applied to the turnover of an undertaking that edits, produces, distributes newspapers, distributes or produces broadcasting programs or sells time for advertisement in broadcasting. Turnover resulting from the mere trade of goods (i.e. the products are purchased and sold only)) is to be taken into account by 75 % only. The calculation of relevant turnover values in the banking and insurance sector is also different from other industries. The relevant value in this sector is focused on the income side (i.e. financial income and premium income) instead of the usual turnover value.
The period over which the turnover thresholds are to be considered is the previous fiscal year during which the sale of products or the provision of services took place.
The turnover includes all amounts deriving from the sale of products or the provision of services in the national or the world market on the basis of the usual activities of the company after deduction of rebates on products, VAT and all relevant taxes directly linked to the turnover. Turnover generated on the basis of intra-group transactions is not taken into account for the purposes of calculation of turnover. For the calculation of the participating parties’ turnover (Greek and worldwide) one shall take into consideration the turnover of their upstream and downstream links. On the contrary, when it comes to thresholds involving the worldwide turnover of a company, then the calculation is made on the basis of the sales of products or the provision of services globally, i.e. to clients both in Greece and in any other jurisdiction.
Even though market shares are not taken into account as regards the triggering of the thresholds for the notification of a concentration to the HCC, it should be noted that they are being considered at the stage of the evaluation of the possible negative effects a horizontal concentration could imply for competition on the relevant market.
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 Bills, the value of sales will be that corresponding to the previous fiscal year during which the concentration operation takes place.
The calculation of the relevant turnover and market shares is generally in line with the provisions of the EU Merger Regulation.
On the acquirer side, the relevant turnover (group-wide) includes the sales of products and the provision of services related to Portugal (turnover achieved in Portugal should include sales from other territories to clients in Portugal) in the last financial year, and should be net of taxes directly related to the business (e.g. VAT) as well as of intra-group sales. On the target side, only the turnover of its business is taken into account (the turnover of the seller / vendor's group is not taken into account).
For credit institutions, other financial institutions and insurance undertakings, specific rules apply (generally in line with the provisions of the EU Merger Regulation).
The PCA’s interpretation of relevant market shares is quite broad. For instance, in the absence of any overlap between the parties’ activities, the mere transfer of an undertaking’s position is considered an acquisition of a market share and might trigger mandatory prior notification. Moreover, purely foreign-to-foreign transactions can be covered by the Competition Act in the event that they have effects in Portugal, even if none of the parties is established, has facilities or is represented in Portugal.
If the target is a recently created company with no activity in the relevant market, prior to the concentration, the PCA can use an estimated market share for the future. It is also noteworthy that the relevant market share used for the control of the relevant threshold is only calculated with respect to the relevant product market(s) in Portugal, even if the geographic market is wider.
Finally, an adjustment must always be made to account for permanent changes in the economic situation of the undertakings concerned, such as relevant subsequent acquisitions or divestments which are not, or not fully, reflected in the audited accounts. In this regard, the PCA tends to follow the Commission Consolidated Jurisdictional Notice.
“Turnover in Japan” means sales of products, including services, to customers located in Japan. However, sales to customers located outside Japan shall be included into “turnover in Japan” if the seller recognized that the buyer would re-sell the products to customers located in Japan without changing the characteristics of the products.
Sales to customers located in Japan can be excluded from “turnover in Japan” if the seller recognized that the buyer would re-sell the products to customers located outside Japan without changing the characteristics of the products.
In order to determine the Jurisdictional Thresholds, the consolidated assets and turnover of the parties are taken into consideration (including all units, divisions and subsidiaries). When only a portion of an enterprise or a division or a business is being acquired or merged, or amalgamated, then the value of assets of only such portion or division or business, and the turnover attributable to such portion or division or business is considered for calculating the Jurisdictional Thresholds.
Turnover is defined under Section 2(y) of the Competition Act to include the value of sale of goods or services.
Assets as defined under explanation (c) of Section 5 of the Competition Act, are to be determined by taking the book value of the assets as shown in the audited books of account of the enterprise in the financial year immediately preceding the financial year in which the date of the proposed merger falls, as reduced by depreciation. The value of the assets include, the brand value; value of goodwill; value of copyright, patent, permitted use, collective mark, registered proprietor, registered trademark, registered user, homonymous geographical indication, geographical indications, design, or layout-design, or other similar commercial rights, if any.
Turnover is calculated broadly in the same way as it is for the purpose of the EU Merger Regulation, i.e. sales to third parties in the most recent financial year of goods and services, net of sales rebates, discounts and turnover-related taxes (such as VAT) and adjusted to take account fully of acquisitions and disposals of businesses. Turnover is usually (but not always) allocated geographically according to the location of the customer.
A party's turnover and/or share of supply should be taken as including the turnover or share of supply of entire group of companies to which it belongs. However, the turnover or share of supply of the seller (and any of the seller's group companies) is not taken into account when determining the turnover or share of supply of the target. In addition, the group of entities that is to be taken into account for the purposes of calculating turnover under the EA is slightly wider in scope than that which is taken into account for the purposes of the EU Merger Regulation. In particular, the following entities may be included in the turnover calculation:
- Entities or persons that are 'associated' with the target, for example because they are family relations, or because they carry on business 'in partnership' with the target.
- Where the target has material influence or control over the policy of an enterprise, but does not have a legally controlling interest (as defined in section 4 above), the CMA can include its turnover with that of the target for the purpose of assessing whether it has jurisdiction, although it is not required to. The same applies with respect to enterprises that have a material influence or control of the target's policy, but do not have a legal controlling interest.
For outsourcing transactions, the CMA may treat as turnover sales between the target and the seller, and may attribute such value to those sales as it considers appropriate to reflect their open market value.
For the share of supply test, the CMA has a broad discretion as to the category of goods or services that it uses as the frame of reference for assessing whether the test is met. In particular, the CMA will not – for the purposes of assessing whether it has jurisdiction – carry out a detailed assessment of the relevant economic market. Rather, it will consider the scope of products or services which appear to be broadly comparable, and potentially substitutable, with the products or services of the merging parties. That category may be considerably wider or narrower than the proper relevant economic product market to which the goods or services belong. As regards the geographic area that is used as the frame of reference for the share of supply test, this may be national, regional or local, depending on the circumstances (again, the CMA has a broad discretion).
The EUMR’s jurisdictional thresholds are based on turnover. Typically, the turnover for the last financial year for which audited accounts are available is taken into account.
Turnover is generally allocated to the place where the customer is located, which is normally the location where competition with alternative suppliers takes place and where the contractual obligations are performed, i.e. where the service is actually provided and the product is actually delivered. There are a number of exceptions for certain industries, e.g. transport of passengers, mining and commodity trading, credit and financial institutions.
Calculation of turnover
- Turnovers are calculated for the entire group of companies under the same ultimate control. While turnovers, including consolidated turnovers, are calculated according to accepted accounting principles, the question of which entities will be brought into account and included in the consolidated turnovers of the group is set according to antitrust laws. That is, all entities controlled by the same ultimate controlling owner, according to the definition of "control" under Israeli Antitrust Law, will be brought into account, regardless of whether their turnovers are consolidated under accepted accounting principles;
- Turnovers are calculated for Israel only, and based on accepted accounting principles. In other words – if an entity's turnover is brought into account, the relevant figure will normally be the sales turnover as it appears in its financial reports;
- The relevant turnovers are the turnovers in the financial year preceding the transaction; i.e. if a transaction occurs during 2019, the relevant turnover will be the 2018 turnover;
- Sales into Israel from other locations will normally be brought into account, whilst sales from Israel into other territories will normally not be part of the relevant revenue threshold.
Calculation of market shares
The definition of markets, the identification of market participants and the allocation of market shares are always some of the most complex and challenging questions presented by competition laws. Nonetheless, we can highlight some principles that apply in the context of Israeli merger control.
- Market shares refer to the relevant product and geographic market. The full market definition tests are beyond the scope of this essay, but, generally speaking, a relevant market would be one where a hypothetical single actor would be able to profitably raise the price by 5-10% over time without the loss in quantities decreasing its revenues (this is the well-known "hypothetical monopoly test" which is also applied in other jurisdictions).
- The Israeli Antitrust Authority generally does not provide guidance on market share and market definition issues and the parties must determine the applicability of market share thresholds by themselves. Bona-fide estimates normally suffice in order to determine whether filing is necessary, unless there are specific doubts and concerns that necessitate an expert economic opinion to define markets and measure market shares.
- The market is not necessarily national. If the parties cross the market share thresholds in a distinct geographic market within Israel, filing is required.
The Israeli Antitrust Authority prefers to measure market shares by the quantity of products sold. However, this analysis may sometimes be irrelevant, especially in highly-variated product markets. The less homogenous the products, the higher the tendency to calculate market shares by revenue.
A business operator's turnover shall include the incomes obtained by the business operator from the sales of products and the provision of services in the previous accounting year, net of relevant taxes and surcharges. The turnover "within China" means incomes obtained from the buyers who are located within China. It includes the business operator's export of products or services into China, but excludes its export of products or services from China to other countries or regions. The global turnover includes the turnover within China.
The turnover of a business operator participating in the concentration shall be the sum of the consolidated turnover of all the entities controlled by the ultimate controlling entity of the business operator, excluding the turnovers derived from the internal transactions between the entities controlled by the same ultimate controlling entity.
Specifically, the turnover of an individual business operator participating in the concentration shall be the sum of the turnovers of the following business operators:
(1) the individual business operator itself;
(2) other business operators directly or indirectly controlled by the business operator referred to in Item (1);
(3) other business operators who directly or indirectly control the business operator referred to in Item (1);
(4) other business operators directly or indirectly controlled by the business operators referred to in Item (3); and
(5) other business operators jointly controlled by two or more business operators among those referred to in Item (1) through to Item (4).
It should be added that:
(1) If the individual business operator is jointly controlled by two or more business operators, its turnover shall include the turnovers of all the controlling parties;
(2) The turnover of the individual business operator shall not include the turnover of the business operators that the individual business operator has sold or over which it no longer has controlling power;
(3) Where several individual business operators participating in the concentration jointly control another business operator, or where the business operators participating in the concentration jointly control another business operator with business operators which do not participate in the concentration, the turnover of such an individual business operator participating in the concentration shall include the turnover generated by the jointly-controlled business operator from transactions with third-party business operators, and such turnover shall only be counted once.
The agency considers entities’ net turnover as stated in their financial statements. Entities must use the higher of either of the following two sources to determine their asset value: (i) the value shown on the balance sheet; or (ii) the commercial value (provided the amount to be paid in the transaction can be considered the commercial value).