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

Merger Control

China Small Flag China

It makes no difference with respect to the jurisdictional thresholds whether the transaction is "foreign-to-foreign," i.e., whether the legal entities acquiring and being acquired are all located outside China.

The fact that the business operators participating in a "foreign-to-foreign" transaction are not incorporated in China does not exempt these concerned parties from notifying MOFCOM of such transactions. As long as the concerned parties in a "foreign-to-foreign" transaction can impact competition in China, as indicted by the fact that the relevant China turnover thresholds are met, the transaction is notifiable in China regardless of domicile or place of incorporation of the involved parties.

Denmark Small Flag Denmark

“Foreign-to-foreign” transactions, i.e. where the legal entities acquiring and being ac-quired 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.

Ireland Small Flag Ireland

The relevant jurisdictional thresholds apply irrespective of whether or not the transaction concerns undertakings incorporated in Ireland. However, the relevant turnover to be taken into account is the turnover in Ireland of the undertakings involved. As this effectively means turnover derived from sales to customers located in Ireland, the Competition Act is concerned with the impact of transaction on competition in Ireland.

Israel Small Flag Israel

The nexus tests are the same whether or not the legal entities acquired reside in Israel. If the nexus test and the filing thresholds apply to a group of companies under the same ultimate controlling entity, it is irrelevant which specific legal entities within such group perform the transaction.

The risk of non-filing, in cases where the acquired entities or assets have little or no nexus to Israel, must be assessed individually on a case by case basis. It should be noted that although a breach of the Israeli Antitrust Law is a criminal as well as administrative offence, to date, non-Israeli entities did not face criminal charges, even for horizontal hard core cartel. This policy towards foreign entities results from various legal constraints and is unlikely to change in the foreseeable future.

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.

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.

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 2015, 64 transactions notified to the Turkish Competition 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. In its 2014 Activity Report, the Authority announced that it will further step up these efforts.

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).

United States Small Flag United States

The HSR Act recognizes certain exemptions applicable to “foreign-to-foreign” transactions. All thresholds are adjusted annually to reflect changes in the US gross national product.


In general, the acquisition of assets located outside the United States is exempt, unless the assets to be held as a result of the acquisition generated sales in or into the United States of greater than US$78.2 million in the acquired person’s most recent fiscal year. Where both the acquiring person and acquired person are foreign, an assets acquisition that exceeds that threshold may nevertheless be exempt if the aggregate sales of the acquiring and acquired persons in or into the United States is less than US$171.9 million in the parties’ respective most recent fiscal years; the aggregate total assets of the acquiring and acquired persons located in the United States is less than US$171.9 million, and the value of the transaction does not exceed US$312.6 million.

Voting Securities

In general, the acquisition of voting securities of a foreign corporation by a US person is exempt, unless the foreign corporation has assets located in the United States valued at greater than US$78.2 million, or made sales in or into the United States in its most recent fiscal year of greater than US$78.2 million. The acquisition of voting securities of a foreign corporation by a foreign person is exempt unless the same thresholds are met, and the foreign person will “control” the foreign corporation as a result of the acquisition. Where both the acquiring person and acquired person are foreign, a voting securities acquisition that exceeds the US sales or assets threshold may nevertheless be exempt if the aggregate sales of the acquiring and acquired persons in or into the United States is less than US$171.9 million in the parties’ respective most recent fiscal years; the aggregate total assets of the acquiring and acquired persons located in the United States is less than US$171.9 million, and the value of the transaction does not exceed US$312.6 million.

Russia Small Flag Russia

“Foreign-to-foreign” transactions are covered by the Russian merger control regime if the acquired foreign company has a subsidiary in Russia (this will be regarded as acquisition of control over such a subsidiary) or supplied to Russia in the last year goods and services worth more than RUB 1 bn.

The jurisdictional thresholds for “foreign-to-foreign” transactions are the same as for any other transactions covered by the merger control regime. Please note, however, that, as mentioned above, additional criteria relating to the turnover of the foreign company in Russia may be applied in certain cases.

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).

Belgium Small Flag Belgium

There are no distinct jurisdictional thresholds for “foreign-to-foreign” mergers. If a concentration between two non-Belgian entities meets the Belgian thresholds, it must be notified. The penalties for failure to notify are the same as for any other concentration, i.e., fines may be imposed.

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 etc, 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 (

South Africa Small Flag South Africa

"Foreign-to-foreign" mergers are captured by South African merger control provided that there is an effect in South Africa. Such an effect will be manifest where the target has assets or turnover in or into South Africa. If the target business has no assets and turnover in or into South Africa, there is no need to notify.

The same thresholds described in 3.1 above apply to foreign-to-foreign mergers.

France Small Flag France

There is no special test for “foreign-to-foreign” mergers. A concentration between two foreign entities that meets the French thresholds must be notified and fines may be imposed for failure to notify.

Mexico Small Flag Mexico

For transactions carried out abroad, the filing must be made before the concentration has legal or material effects in Mexico if any. This means that any transaction that has either a direct or an indirect impact in Mexico will require filing only if, once again, the transaction reached statuary thresholds and is not exempted by the FECL.

Therefore, if the transaction implies, for example, the indirect acquisition of assets located in Mexico or will have an effect on a Mexican market in regard of sales of a certain product or maybe indirect acquisition is deemed to exist if, for instance, a company abroad is acquired and the acquired company has subsidiaries in Mexico and any thresholds in Mexico are reached, then the parties will have to submit to local merger control. However, if the transaction does not have any impact in regard to Mexico, even if statutory conditions are met, parties do not require a filing in Mexico.

Germany Small Flag Germany

Foreign-to-foreign transactions require German merger approval in the same way as domestic transactions so long as they have sufficient domestic market effects for German antitrust law to apply. Prior to 2009, the domestic effects doctrine played a much larger role in Germany as only one party to a transaction was required to have sales in Germany above the relevant domestic sales threshold. Following the introduction of the second domestic turnover threshold requiring sales of another party to the transaction in excess of EUR 5 million, the FCO has held the view that a foreign transaction ordinarily has sufficient local effects once the parties meet the German merger control thresholds. This effectively limits the application of the effects doctrine to joint venture transactions as the JV parents will often meet the German merger control thresholds but the JV itself may have no nexus to the German market. The FCO has described the situations in which it is prepared to accept that foreign transactions do not fall within the ambit of German merger control in a guidance paper on domestic effects in merger control that was published in 2014. In essence, it exempts only such transaction from a notification requirement in Germany in which the JV is or will be active in a relevant market that does not include Germany and the JV parents have no meaningful market share in the same or any upstream or downstream markets. If there is doubt about whether the application of the effects doctrine does exempt a transaction from notification in Germany, it is possible to request the FCO’s guidance on this very point or submit a precautionary notification to the agency. The downside of the latter approach is only that the prevailing view in Germany is that the parties will then be required to await German merger clearance before closing the transaction.

Italy Small Flag Italy

The ICA does not require the notification of acquisitions and mergers through incorporation involving foreign-registered undertakings which do not have at the time of the transaction, and did not have during the previous three years, directly or indirectly, a turnover in Italy. These transactions are, however, subject to mandatory notification if, following the concentration, the undertaking begins doing business on the Italian market.

The creation of joint ventures and mergers in which at least one of the parties to the transaction is foreign-registered are not subject to mandatory notification if the foreign party does not have at the time of the transaction, and did not have during the previous three years, any turnover in Italy. These transactions are, however, subject to mandatory notification if, following the concentration, the new entity will start operating an economic activity on the Italian market.

The cumulative thresholds mentioned in the response to question 3.2 above, are not capable of catching transactions with little or no nexus to Italy.

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.

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.

Cyprus Small Flag Cyprus

“Foreign-to-foreign” mergers are fully 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 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.

Updated: July 6, 2017