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The International Comparative Legal Guide to:

Merger Control 2013


9th Edition
A practical cross-border insight into merger control

Published by Global Legal Group, with contributions from:


Accura Advokatpartnerselskab Linklaters LLP
Allende & Brea Manyonge Wanyama & Associates Advocates
Anastasios Antoniou LLC Matheson
Ashurst LLP Morais Leito, Galvo Teles, Soares da Silva & Associados
AYR Amar Reiter Jeanne Shochatovitch & Co. Nagashima Ohno & Tsunematsu
Beiten Burkhardt Olivares & Ca., S.C.
Boga & Associates Oliveira Felix Advogados
Chapman Tripp PRA Law Offices, Advocates
Crowell & Moring LLP PUNUKA Attorneys & Solicitors
Drew & Napier LLC Rizkiyana & Iswanto Antitrust and Corporate Lawyers
ELIG, Attorneys-at-Law Schellenberg Wittmer
Estudio Bergstein Schoenherr
Gianni, Origoni, Grippo, Cappelli & Partners SCPA DOGUE-ABBE YAO & Associs
Gide Loyrette Nouel SJ Berwin LLP
Hunton & Williams LLP Skadden, Arps, Slate, Meagher & Flom LLP
Kallel & Associates TRINITI
Kastell Advokatbyr AB Van Doorne
Katten Muchin Rosenman LLP Vasil Kisil & Partners
King & Wood Mallesons Webber Wentzel
Koep & Partners Wiersholm AS
Lee and Li, Attorneys-at-Law
The International Comparative Legal Guide to: Merger Control 2013
General Chapters:
1 A Tale of Three Mergers: The Use of Quantitative Techniques in UK and EU Merger Control
Mat Hughes & David Wirth, Ashurst LLP 1
2 Antitrust Management of the Difficult Deal James J. Calder, Katten Muchin Rosenman LLP 10
3 Identifying Filing Obligations and Beyond: Merger Control in Cross-Border Transactions
Volker Weiss and Michael Mayer, Schoenherr 15
Contributing Editors
Nigel Parr and Ruth 4 EU Merger Control: 2012 and Beyond Frederic Depoortere & Giorgio Motta, Skadden, Arps, Slate,
Sander, Ashurst LLP Meagher & Flom LLP 20

Account Managers Country Question and Answer Chapters:


Brigitte Descacq, Dror
5 Albania Boga & Associates: Sokol Elmazaj & Jonida Skendaj 25
Levy, Maria Lopez,
Florjan Osmani, Samuel 6 Argentina Allende & Brea: Julin Pea 32
Romp, Oliver Smith, Rory
7 Australia King & Wood Mallesons: Sharon Henrick & Wayne Leach 37
Smith, Toni Wyatt
8 Austria Schoenherr: Stefanie Stegbauer & Franz Urlesberger 45
Sub Editors
Beatriz Arroyo 9 Belgium Linklaters LLP: Thomas Franchoo & Niels Baeten 52
Fiona Canning 10 Bosnia Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr:
Editor & Herzegovina Srana Petronijevi & Danijel Stevanovi 59
Suzie Kidd 11 Brazil Oliveira Felix Advogados: Natlia Oliveira Felix 67
Senior Editor 12 Bulgaria Advokatsko druzhestvo Andreev, Stoyanov & Tsekova in cooperation with Schoenherr:
Penny Smale Ilko Stoyanov & Mariya Papazova 73
Group Consulting Editor 13 China King & Wood Mallesons: Susan Ning & Huang Jing 80
Alan Falach
14 Croatia Schoenherr: Christoph Haid 86
Group Publisher 15 Cyprus Anastasios Antoniou LLC: Anastasios A. Antoniou & Rafaella Michaelidou 92
Richard Firth
16 Czech Republic Schoenherr: Martin Nedelka & Radovan Kub 98
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Global Legal Group Ltd. 17 Denmark Accura Advokatpartnerselskab: Jesper Fabricius & Christina Heiberg-Grevy 105
59 Tanner Street 18 Estonia TRINITI: Ergo Blumfeldt & Tnis Tamme 113
London SE1 3PL, UK
Tel: +44 20 7367 0720
19 European Union Crowell & Moring LLP: Dr. Werner Berg & Sean-Paul Brankin 121
Fax: +44 20 7407 5255 20 France Ashurst: Christophe Lemaire & Simon Naudin 131
Email: info@glgroup.co.uk
21 Germany Beiten Burkhardt: Philipp Cotta 140
URL: www.glgroup.co.uk
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GLG Cover Image Source 24 India PRA Law Offices, Advocates: Premnath Rai & P. Srinivasan 165
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Copyright 2012
28 Italy Gianni, Origoni, Grippo, Cappelli & Partners: Eva Cruellas Sada 201
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ISBN 978-1-908070-41-8 31 Kenya Manyonge Wanyama & Associates Advocates: Peter Wanyama & Mohammed Nyaoga 223
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32 Kosovo Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr:
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34 Mexico Olivares & Ca., S.C.: Gustavo A. Alcocer & Carlos Woodworth M. 243
35 Montenegro Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr: Srana Petronijevi
& Danijel Stevanovi 249
36 Namibia Koep & Partners: Peter Frank Koep & Hugo Meyer van den Berg 256
37 Netherlands Van Doorne: Sarah Beeston & Jitske Weber 263
38 New Zealand Chapman Tripp: Grant David & Neil Anderson 270
Continued Overleaf

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720
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Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.
This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified
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www.ICLG.co.uk
The International Comparative Legal Guide to: Merger Control 2013

Country Question and Answer Chapters:


39 Nigeria PUNUKA Attorneys & Solicitors: Anthony Idigbe & Chinwe Chiwete 277
40 Norway Wiersholm AS: Anders Ryssdal & Anette Halvorsen Aarset 285
41 Poland Gide Loyrette Nouel: Dariusz Tokarczuk & Szymon Chwaliski 294
42 Portugal Morais Leito, Galvo Teles, Soares da Silva & Associados: Carlos Botelho Moniz
& Pedro de Gouveia e Melo 300
43 Romania Schoenherr si Asociatii SCA: Mihai Radulescu & Cristina Pan 312
44 Serbia Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr: Srana Petronijevi
& Matija Vojnovi 319
45 Singapore Drew & Napier LLC: Lim Chong Kin & Ng Ee-Kia 328
46 Slovakia Schoenherr: Martin Nedelka & Radovan Kub 338
47 Slovenia Odvetnika pisarna Sorak d.o.o in cooperation with Schoenherr: Jani Sorak & Eva kufca 344
48 South Africa Webber Wentzel: Nkonzo Hlatshwayo & Robert Wilson 354
49 Spain SJ Berwin LLP: Ramn Garca-Gallardo & Manuel Bermdez Caballero 367
50 Sweden Kastell Advokatbyr AB: Kent Karlsson & Pamela Hansson 377
51 Switzerland Schellenberg Wittmer: David Mamane & Dr. Jrg Borer 385
52 Taiwan Lee and Li, Attorneys-at-Law: Stephen Wu & Yvonne Hsieh 392
53 Tunisia Kallel & Associates: Sami Kallel 398
54 Turkey ELIG, Attorneys-at-Law: Gnen Grkaynak 404
55 Ukraine Vasil Kisil & Partners: Denis Y. Lysenko & Mariya V. Nizhnik 411
56 United Kingdom Ashurst LLP: Nigel Parr & Duncan Liddell 418
57 USA Hunton & Williams LLP: Bruce Hoffman 432
58 Uruguay Estudio Bergstein: Leonardo Melos & Jons Bergstein 443

EDITORIAL

Welcome to the ninth edition of The International Comparative Legal Guide


to: Merger Control.
This guide provides corporate counsel and international practitioners with a
comprehensive worldwide legal analysis of the laws and regulations of merger
control.
It is divided into two main sections:
Four general chapters. These are designed to provide readers with a
comprehensive overview of key issues affecting merger control, particularly
from the perspective of a multi-jurisdictional transaction.
Country question and answer chapters. These provide a broad overview of
common issues in merger control in 54 jurisdictions.
All chapters are written by leading merger control lawyers and we are
extremely grateful for their excellent contributions.
Special thanks are reserved for the contributing editors Nigel Parr and Ruth
Sander of Ashurst LLP for their invaluable assistance.
Global Legal Group hopes that you find this guide practical and interesting.
The International Comparative Legal Guide series is also available online at
www.iclg.co.uk.

Alan Falach LL.M


Group Consulting Editor
Global Legal Group
Alan.Falach@glgroup.co.uk
Chapter 3

Identifying Filing Obligations


and Beyond: Merger Control Volker Weiss

in Cross-Border Transactions
Schoenherr Michael Mayer

1. Introduction exceptions); ii) preparation of a filing (bearing in mind, for


instance, deadlines to file); and iii) handling various (parallel)
Multi-jurisdictional merger control filings have gained in merger control proceedings.
complexity in the recent past. For once, more and more countries
around the world have introduced merger control regimes. On the
other hand, many merger control regimes are still ill-equipped to 2. Identifying Filing Obligations
deal with the needs of businesses to have a short and streamlined
review process. For instance, the transaction timetable may be at
risk, if competition authorities take a (too) formalistic approach and 2.1. Pre-selection of the jurisdictions to be reviewed
require information which is both irrelevant for the competitive
assessment and difficult to collect for the parties. In the below we The initial step in a multi-jurisdictional assessment is to select those
aim to provide some guidance how best to manoeuvre around jurisdictions that will be reviewed. Obviously it is costly and time
potential pitfalls in cross-border transactions in order to obtain consuming to review all world jurisdictions considering that
approvals in an efficient and timely manner. globally there are more than 100 merger control regimes in force.
Thus, practitioners often tend to select only those jurisdictions in
At the beginning of each multi-jurisdictional merger control
which the target is currently active (or will become active in the
analysis it is necessary to bear in mind that the merger control
foreseeable future), as it is only in these jurisdictions that the
process is only one of many legal work-streams in an M&A-
transaction will have a direct impact.
transaction. In most cases, the merger control stream cannot be
simply detached from other work-flows, which may conflict in However, it should be borne in mind that certain jurisdictions adopt
some respects. In particular, time is often of the essence. For a catch-all approach. This means that the applicable jurisdictional
example, in restructuring transactions the target will often be in dire thresholds can be met by one party only, i.e., irrespective of the
need to obtain fresh capital, while the investor will inject capital targets activities (see below). Therefore, it is prudent not to rule out
only in return for control rights. However, applicable merger review too many jurisdictions at this first step, but also to have an eye on
regimes may provide for standstill periods during which such those jurisdictions where the target is not (presently) active.
control cannot be exercised. In those circumstances, it is essential
that the merger control lawyers interface with the transactional 2.2. Relevant transactions What constitutes a
lawyers to come up with a realistic plan to structure and implement Concentration?
the transaction.
Carrying out multi-jurisdictional assessments at an early stage of In most countries, merger control rules apply to transactions that
the transaction will often save expenses and stress. In particular, lead to a change of control. Therefore, the acquisition of a
compiling the most important information (for example, a controlling stake in another undertaking is usually relevant for
country-by-country revenue split, a description of the parties' merger control purposes. However, control is not defined
activities and market data) will allow to anticipate if and at what unanimously throughout the different jurisdictions. It typically
time notifications need to be submitted. These matters can then be refers to an undertaking's opportunity to (solely or jointly) exercise
factored into the transaction as a whole. In complex cases, a decisive influence over another undertaking. Sole control is usually
(merger control) feasibility assessment should be carried out in conferred by a majority holding in the voting rights.
advance before the technicalities of the transaction are actually The assessment of control can be difficult where minority
planned. shareholders have been conferred additional rights (for example, in
There are a number of issues that should be considered at the the company's articles or by agreement between the companys
various procedural stages and efficient project management is shareholders). These veto rights are normally deemed to transfer
essential. Setting up a merger control team, including designated control if they relate to strategic decisions on the company's
members at the client and legal advisers, is often (in particular in business policy (for example, budget and business plan). They do
larger and more complex transaction) essential to allow a smooth not transfer control if they do not go beyond the veto rights
execution of the merger control process. normally accorded to minority shareholders in order to protect their
The chapter is divided into three sections along the main stages in financial interests as investors in the company (for example,
the multi-jurisdictional filing process, namely: i) identifying filing changes in the statute, an increase or decrease in the capital or
obligations (dealing with the concepts of control, thresholds and liquidation).

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Schoenherr Merger Control in Cross-Border Transactions

However, there are merger control regimes in which a transaction Lawyers tend to apply the concepts with which they are familiar
constitutes a (notifiable) concentration despite the fact that the from their home jurisdictions. These do not necessarily match with
transaction does not lead to a change of control: In some countries, the concepts of the relevant regime. For instance, while we (with a
the acquisition of a certain stake in a companys shares constitutes European merger control background) would deem it normal to
a concentration, irrespective of whether the stake confers control; in disregard revenues of the seller, there are jurisidictions (e.g., Brazil)
other countries, a concentration arises, while the influence in which the sellers revenues need to be taken into account for
conferred to the acquiring party/parties does not amount to control, assessing whether the jurisdictional thresholds are met.
but to a lesser degree of influence: Therefore, it is advisable to have a jurisdictional review cross-
25%-stake: There are various jurisdictions in which merger checked by local counsel. There can, notably, be particularities
control rules apply if a certain shareholding-level is met or regarding the:
exceeded (irrespective of whether the shareholding confers
Identification of the undertakings whose turnover is to be
control). For example, in Austria, Germany, Israel and the
taken into account.
Ukraine, merely acquiring a non-controlling share of 25% or
more constitutes a relevant event. Calculation of group turnover.
Influence not amounting to control: There are a number of Calculation of the turnover of the parties involved, e.g. there
jurisdictions in which a concentration is deemed to occur are jurisdictions which apply a multiplicator-rule for certain
even if the degree of influence does not amount to the industries (e.g., media).
decisive influence required under the control concept. For Calculation of market shares.
example, the following jurisdictions require varying degrees Reference year for which the turnover needs to be taken into
of influence, e.g. UK: material influence, Canada: account.
significant influence, and Germany: competitively
significant influence. In these regimes it is necessary to As mentioned above, attention should be paid to catch-all
evaluate the factors which are deemed to be sufficient to jurisdictions, i.e. merger control regimes, in which the relevant
bring about the necessary influence (for example, board revenue thresholds may be met by one party to the transaction only.
representation and competitive ties). Typical catch-all-jurisdictions include:
For instance, the concept of the competitively significant Serbia;
influence applied in Germany, may be illustrated by the A- Montenegro;
TEC/NA-decision of the German Federal Cartel Office (FCO) in Ukraine; and
2008. In this case, the FCO ultimately prohibited the acquisition of
Certain Western European countries, such as Austria.
a 13.75% shareholding in Norddeutsche Affinerie AG (NA) by A-
TEC Industries AG (A-TEC). Despite falling short of an acquisition
of control, the FCO found the transaction to be notifiable in 2.4. Exceptions
Germany because it gave A-TEC competitively significant
influence over NA. In view of the constantly low voting presence at In practice, there is frequently a variety of jurisdictions where the
NA's annual general meetings in recent years the shares held by A- relevant thresholds are met, including jurisdictions where the target
TEC represented a blocking minority comparable to a 25% share has very little activity or even no activity at all.
acquisition. The other shareholders of NA also had no expertise in Some jurisdictions provide exceptions to prevent an excess of filings.
the relevant sector of copper and did not pursue any long-term In some countries foreign-to-foreign transactions are excluded from
strategic interests that would influence the competitive behaviour of merger control, even where the jurisdictional thresholds are met. This
NA. A-TEC, on the other hand, was active in all NA's key areas of may apply, for example, where the transaction:
business. The FCO found the combination of the two companies to does not give rise to a direct change in control of a local
be restrictive of competition. Consequently, the FCO prohibited the company (this is a concept known in many Commonwealth
transaction and, as it had already been closed, ordered its of Independent States (CIS) countries); and/or
unwinding. does not affect the competitive structure of the national
market concerned (effects doctrine).
2.3. Jurisdictional thresholds The effects doctrine has considerable importance, particularly for
catch-all-jurisdictions. It provides that foreign-to-foreign mergers
Only those concentrations are notifiable that have, simply put, an are only notifiable, if they have a direct and foreseeable impact on
economic impact. To assess this impact most jurisdictions apply the jurisdictions market. In practice, the question whether or not a
turnover thresholds. This means that it has to be examined, if the filing obligation is triggered frequently falls in a grey area. While
undertakings involved reach certain levels of revenue (the most countries recognise the concept on an abstract level, local
thresholds usually refer to local and worldwide revenues). competition authorities (for example, in Central and Eastern
However, there are a number of countries which have (in addition European countries) may not necessarily be familiar with the
or alternatively), asset- or market-share related thresholds. These application of the concept and/or authorities may take the formal
can raise difficult questions concerning what assets need to be taken stance that whenever the jurisdictional thresholds are met a filing
into account or on what basis the market share must be calculated. obligation is triggered, irrespective of a local effect. Therefore
It is important, when considering this stage, to have access to data excessive reliance on the effects doctrine is dangerous.
concerning the undertakings involved, such as: However, the effects doctrine is not only a useful way to exclude
a country-by-country split of revenue data of the participants filing obligations in catch-all-jurisdictions; it is also often applied to
to the transaction; reduce filing requirements in joint venture-transactions. These
a list of local subsidiaries; and transactions frequently lead to jurisdictional thresholds being met in
ideally, financial statements. various jurisdictions, as typically the revenue of the controlling
parent companies must be taken into account (this applies, for
The review of jurisdictional thresholds is often considered to be a example, under Regulation (EC) No. 139/2004 on the control of
mechanical exercise. However, it is important to be careful. concentrations (Merger Regulation)). However, there are good

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Schoenherr Merger Control in Cross-Border Transactions

arguments against there being effects in a market if the joint venture review process before the competition authority needs to be
is not planned to become active in that country. considered in the transaction planning. In addition, preparation of
Despite the practical importance of the effects doctrine, case law the notification may take considerable time. Short forms and
and practice is scarce. In the EU, there has been a landmark simplified procedures can significantly facilitate the filing process.
decision of the Court of First Instance in the case of Gencor/Lonrho Most jurisdictions foresee a two-phase procedure. The majority of
(Case IV/M.619 OJ 1997 L11/30; Case T-102/96 [1999] ECR 753). cases are cleared within Phase I, which usually takes around a
In that case the court held that the application of the Merger month. Phase II proceedings typically take considerably longer
Regulation to a merger between companies located outside EU (often up to several months). Comparatively fewer mergers end up
territory is justified under public international law when it is in Phase II, where the case undergoes an in-depth investigation by
foreseeable that a proposed concentration will have an immediate the relevant competition authority. For instance, the EU
and substantial effect in the Community. Commission has initiated Phase II proceedings in only about 5% of
EU practice in the aftermath of the Gencor decision is far from the notified cases since the entry into force of the Merger
transparent. Therefore, national decisional practice may provide Regulation.
guidance of when a merger can have effects on the national market. When predicting the timescale, the practice of local authorities
For example, the German Federal Cartel Office (Bundeskartellamt) plays a significant role. In most jurisdictions, there are statutory
(FCO) issued guidelines on the domestic effects doctrine. This may deadlines within which the authority must make a decision.
be a helpful starting point also for the assessment in other However, some authorities employ considerable discretion
jurisdictions. According to these guidelines a merger has a domestic concerning when a notification is considered to be complete and the
effect (even if the target is not active in Germany), if it leads to an timetable starts. In addition, in various regimes the authority can
appreciable increase or an addition of know-how, resources, stop the clock running where further information is required. This
financial strength or IP rights, which would benefit future activities often leads to time delays of several weeks (sometimes even
of the party that operates in Germany. months) compared to time periods set out in the relevant laws.
Jurisdictional assessment and planning, and in particular the
3. Preparation of the Filing assessment of timing aspects, must take into account the potential
substantive competitive issues that the transaction may trigger. For
After the jurisdictional merger review assessment, legal advisers are example, if the parties identify critical issues that may raise
usually able to identify those jurisdictions where the filing competition concerns, they may consider pre-notification contacts
requirements are met. Before the filing may be prepared, several with the relevant authorities to discuss the competitive issues at an
follow-on questions need to be addressed, which are dealt with below: early stage. If the concerns are sufficiently severe, it may be
necessary to consider offering remedies (for example, to divest
businesses to third parties). The parties are usually well advised to
3.1. Are filings mandatory or voluntary? discuss these issues at an early stage so as not to delay the process.

In most jurisdictions filings are mandatory if the jurisdictional


thresholds are met. The filing obligations are usually enforced by 3.4. Questionnaires and briefing of local counsel
severe sanctions for failure to notify. Typically, these include fines
and civil nullity sanctions, which will be dealt with below: Once preliminary measures have been undertaken, the next step of
Fines: Fines for early implementation can be significant. For the process is to prepare the notification. This involves interaction
instance under the EU Merger Regulation the European with local counsel, who not only represent the client before the
Commission can impose fines of up to 10 % of the aggregate respective competition authority, but also put together the
turnover of the undertaking concerned. notification.
Civil nullity sanctions: Many merger control regimes deem a The relevant information must be compiled to draft the
transaction to be invalid unless approval has been obtained. notifications, if this has not already been done. In most cases,
While it may be difficult to assess, which parts of an questionnaires are sent to the parties in order to gather the relevant
agreement underlying the concentration are affected by the
information. There are still major discrepancies between countries
nullity sanction foreseen in the merger control regime in one
concerning the amount and quality of information required. Many
particular country, it is evident that these difficulties
themselves are among the main reasons better not to risk the countries require translated and legalised documents, including
invalidity of an agreement or parts thereof. powers of attorney, annual reports and many others.
Despite the differences between jurisdictions there are some
common features notifications usually have to contain, including a:
3.2. Are there filing deadlines?
description of the parties (containing corporate and business
There are some jurisdictions that require that the filing be submitted information);
within a certain time period of, for example, signing of the relevant description of the transaction;
agreements or announcement of the public bid. For instance, in definition of the relevant markets; and
Serbia, such filing deadline is 15 days. Filing deadlines often competitive assessment of the markets involved.
impose considerable pressure on the parties to prepare the If there are several jurisdictions in which filing obligations are
submissions. In practice, therefore, parties should identify those triggered, it may be practical and encourage consistency to prepare
jurisdictions at an early stage. a master template, based on which local counsel can draft a local
filing.
3.3. Approximately how long will the merger control In terms of information gathering, compiling the required
proceedings take? information often turns out to be a time-consuming exercise, which
may use considerable company resources. To organise the
In most transactions time is scarce. Therefore, the length of the information gathering it is efficient to have one central contact at

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Schoenherr Merger Control in Cross-Border Transactions

the company who serves as an interface between the company and 4.2. Are carve outs appropriate?
the lawyers and distributes the questionnaires within the
organisation to the appropriate contacts. When the parties are planning to close the deal on a certain date and
the clearance process is expected to take longer in some
jurisdictions, the parties may consider setting in place hold-separate
4. Handling (Parallel) Merger Control
arrangements (carve outs) so that the closing of the transaction is
Proceedings not delayed by the merger approval process in a particular
jurisdiction. Jurisdictions where the merger control process is still
Based on the assessment regarding the timing aspect described
pending are then carved out from the transaction (i.e. the transaction
above (see section 3.3 above), merger control proceedings in
is not implemented in these jurisdictions) until clearance has been
various countries may be started concurrently or consecutively. In
obtained in these countries. However, many authorities have
any event (due to different review time-phases foreseen in different
already made clear that they do not, in principle, support
countries), the situation may occur that clearances have been
manoeuvres around the ban on closing, unless a clear-cut structural
received from some national competition authorities, while the
carve-out can be set-up.
proceedings in other countries are still pending. Absence clearance,
the question may arise if the transaction may nonetheless be closed. For instance, in late 2008 the (German) FCO fined Mars for a
This will be dealt with in more detail below. breach of the ban on closing (not acknowledging an alleged carve
out). In detail, the FCO imposed a fine totalling EUR 4.5 million
against Mars, for a breach of the ban on closing. In May 2007,
4.1. Can the transaction be implemented before Mars notified its intention to acquire Nutro Products (a dog food
clearance?
producer) to the authorities in Germany and the US, among others.
After clearance of the transaction by the US authorities and during
The basic principle in all jurisdictions where notification is
the period of ongoing examination by the German authorities, Mars
mandatory is that the transaction must not be closed before the
acquired the majority of the shares in Nutro Products, while the
clearance of the competent competition authority is obtained
distribution rights for Nutro products in Germany were carved out
(standstill period or ban on closing). However, there are exceptions
by transferring them to a company belonging to the seller.
to this rule (for example Italy).
According to the FCO, by acquiring Nutro Products trademark
Some jurisdictions have legal exceptions to the standstill rights and production sites, Mars took possession of all the assets
requirement. For instance, most regimes provide exceptions necessary to enable it to compete successfully (also on the German
(derogations) to the suspension requirement for public bids (Article market) and therefore infringed the German suspension
7, EU Merger Regulation). requirement.
In other jurisdictions, where there are no exceptions, it may be
possible to obtain similar results by applying a narrow definition of
what constitutes an implementation of a transaction. For example,
there are jurisdictions where only the actual exercise of the voting
rights associated with the acquired shares is considered an
implementation, but not the acquisition of the shares.

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Schoenherr Merger Control in Cross-Border Transactions

Volker Weiss Michael Mayer


Schoenherr Schoenherr
Tuchlauben 17 Tuchlauben 17
A-1014 Vienna A-1014 Vienna
Austria Austria

Tel: +43 1 534 37 291 Tel: +43 1 534 37 4051


Fax: +43 1 534 37 6291 Fax: +43 1 534 37 6100
Email: v.weiss@schoenherr.eu Email: m.mayer@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Volker Weiss has been a partner of Schoenherr since the Michael Mayer is an attorney at law and has been working for
beginning of 2008, where he specialises in European and Schoenherr Vienna since 2008. He mainly focuses on Austrian
Austrian competition law. He is also in charge of Schoenherrs and European competition law, particularly merger control and
Brussels office. After graduating from University of Vienna (Mag antitrust law procedures before the European Commission, the
iur, 1998) Volker Weiss obtained a postgraduate degree from the EU courts, the Austrian Competition Authorities and the Austrian
University of Nijmegen in European business law (LLM, 1999). Cartel Courts. Michael has published a number of articles on
Following traineeships with Houthoff Buruma in The Hague, the European and Austrian competition law in national and
Netherlands (telecommunications and EC competition law, 1999) international business law journals and handbooks. Michael
and with the European Commission (DG competition - banking holds degrees from the University of Vienna (Dr. iur. 2011, Mag.
and insurance, 1999-2000), he worked for Linklaters in Brussels, iur. 2004) and the Vienna University of Economics and Business
Belgium (2000-03) and joined Schoenherr in 2003. He was (Mag. rer. soc. oec. 2008). Michaels doctoral thesis deals with
admitted to the bar in Austria in 2005. Volker Weiss practice principles of group liability for competition law infringements.
focuses on European and Austrian competition law, representing Michael is fluent in English, Italian and French.
and advising clients in a wide range of industries. He has
particular industry know-how in the banking, insurance,
construction, retail and travel sector. He is engaged in all types
of public and private litigation as well as out-of-court advice
(including compliance work) and in merger control work.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend
of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be
one of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means
that we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 8

Austria Stefanie Stegbauer

Schoenherr Franz Urlesberger

1 Relevant Authorities and Legislation and sector specific regulation. The Cartel Act contains special
provisions for mergers in the banking (see questions 2.1 and 3.2)
and media (see questions 2.4 and 4.1) sectors.
1.1 Who is/are the relevant merger authority(ies)?
Further, it is foreseen that regulatory authorities in the energy and
The relevant merger authorities in Austria are the Federal telecommunication sectors may submit (ex officio or upon request
Competition Authority (Bundeswettbewerbsbehrde FCA), an by the Cartel Court) advisory opinions on notified transactions that
independent administrative body assigned to the Federal Minister of affect the respective sector. In transactions affecting air transport,
Economics and Labour, the Federal Cartel Prosecutor the Federal Minister for Transport, Innovation and Technology may
(Bundeskartellanwalt FCP, together with the FCA referred to as submit statements. Finally, the Chamber of Commerce, the
the Official Parties), who is assigned to the Federal Minister of Chamber of Labour and the presidential conference of the Federal
Justice, and the Cartel Court (Kartellgericht). Chambers of Agriculture may also submit statements, if the
transaction affects the relevant sector.
The Official Parties assess notifications in phase I proceedings.
Should a notification raise competition concerns, either Official In addition to the Cartel Act, sector specific legislation applies, inter
Party may apply to the Cartel Court to open phase II proceedings. alia, to transactions in the energy and air carrier sector. In the
Decisions of the Cartel Court may be appealed before the Supreme banking, insurance and media sectors, the planned transaction has
Cartel Court (Kartellobergericht). to be notified also to the sector-specific authority.

Finally, the Competition Commission (Wettbewerbskommission) is Furthermore, mergers between collecting societies do not fall
an advisory body that may give (non-binding) recommendations to within the ambit of the Cartel Act merger control. They have to be
the FCA whether or not to apply for an in-depth investigation of a cleared by the respective regulatory authority.
notified merger.
2 Transactions Caught by Merger Control
1.2 What is the merger legislation? Legislation

The relevant merger legislation is the Cartel Act 2005 2.1 Which types of transaction are caught in particular, how
(Kartellgesetz Cartel Act), particularly part I chapter 3 of the is the concept of control defined?
Cartel Act. In addition to the Cartel Act, the Competition Act
(Wettbewerbsgesetz) contains some relevant procedural rules. Section 7 of the Cartel Act catches the following types of
Transactions that are notifiable in Austria may at the same time transactions:
have Community Dimension pursuant to Article 1 of the EC Merger the acquisition of an undertaking or a major part thereof,
Control Regulation (Council Regulation No 139/2004; ECMR). especially by merger or transformation;
Generally, the European Commission has sole jurisdiction to assess the acquisition of rights in the business of another
transactions with a Community Dimension. However, the Cartel undertaking by management or lease agreement;
Act contains specific rules on media mergers (see questions 2.4 and the (direct or indirect) acquisition of shares, if thereby a
4.1). In view of the exemption from the one-stop-shop principle shareholding of 25% or 50% is attained or exceeded;
pursuant to Article 21 (4) ECMR, media mergers might require a the establishment of interlocking directorships whereby at
filing to both the European Commission and the FCA. least half of the management or members of the supervisory
boards of two or more undertakings are identical;
1.3 Is there any other relevant legislation for foreign mergers? any other concentration by which a controlling influence
over another undertaking may be exercised; and
There is no other relevant legislation for foreign mergers. the establishment of a full-function joint venture.
Furthermore, the conclusion of certain agreements between banks
1.4 Is there any other relevant legislation for mergers in (as defined in the Banking Act) also constitutes a concentration
particular sectors? pursuant to the Cartel Act.
However, intra-group transactions are not caught by the Cartel Act.
Merger rules for particular sectors are contained in the Cartel Act The Cartel Act does not provide for a definition of control. In

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practice, one may refer to the notion of control under EC merger subsidiary must be attributed fully. Indirect shareholdings only
rules. Hence, an undertaking has control over another undertaking, have to be considered, if the direct subsidiary (of at least 25%)
if it has influence on decisions concerning management, budget, holds a controlling interest in the indirect subsidiary. Revenues of
business plan or strategically significant investments. According to the seller shall be disregarded (unless the seller remains linked with
the Austrian Supreme Cartel Court, it is decisive whether or not an the target undertaking as defined in Section 7 Cartel Act).
undertaking may enforce its own competitive interests when it Furthermore, specific provisions for the calculation of turnover
comes to decisions regarding the competitive market position of the apply for mergers in the banking, insurance and media sectors. As
Austria

other undertaking. regards media mergers (i.e. mergers involving two undertakings
that are or hold a share of at least 25% in either a media
undertaking, a media service, or a media support undertaking), the
2.2 Can the acquisition of a minority shareholding amount to
a merger?
Cartel Act stipulates that, with regard to the first and second
turnover thresholds mentioned above, the turnover of media
undertakings and media service undertakings has to be multiplied
Yes, the Cartel Act catches any (direct or indirect) acquisition of a
by 200, whereas the revenues of media support undertakings have
shareholding of 25% or more in another undertaking, regardless of
to be multiplied by 20.
whether or not control is conferred by the transaction. Therefore only
the acquisition of a non-controlling interest of less than 25%, by
which no atypical rights are conferred, does not constitute a merger. 2.5 Does merger control apply in the absence of a
However, please note that the 25% threshold may also be triggered substantive overlap?
if only 25% of the voting rights are acquired or similar rights to
those of a 25% shareholder. Merger control also applies in the absence of a substantive overlap.

2.3 Are joint ventures subject to merger control? 2.6 In what circumstances is it likely that transactions
between parties outside Austria (foreign to foreign
transactions) would be caught by your merger control
In line with Article 3 ECMR the creation of a full function joint
legislation?
venture is subject to merger control. Austrian merger control rules
catch both concentrative and cooperative full function joint ventures.
The Cartel Act only applies to agreements and practices that may
The concept of full functionality corresponds with EC merger rules: impact the Austrian market. Hence, a transaction, despite meeting
a joint venture is deemed to be full function if it will perform on a the turnover thresholds, does not require notification if it has no
lasting basis, all functions of an independent economic entity, i.e. it domestic effect, i.e. generally if the target is not active in Austria (or
has to possess sufficient resources, it has to be established a larger market that Austria is a part of) and the transaction is also
permanently and must not only fulfil auxiliary functions for, or not apt to enhance the acquirers market position in Austria (or a
depend on, the business relations to its founders. larger market that Austria is a part of).
However, the creation of a non-full function joint venture could So far, the Cartel Court has been rather negligent to decline a
nevertheless constitute a notifiable transaction if the assets notification obligation for lack of domestic effects. However, with
contributed to the joint venture are considered (substantial parts of) regard to the acquisition of a Czech and a Slovakian savings bank
undertakings. In this case, the transaction would qualify as a with purely local businesses by the Austrian Erste Bank, the
concentration within the meaning of the Austrian merger control Supreme Cartel Court overturned the decision of the Cartel Court
regime since each mother company of the joint venture acquires by ruling that a strengthening of resources, such as an increase of
shares in/control over an undertaking previously solely financial power of Erste Bank in Austria, alone would not suffice in
owned/controlled by the other mother company. order to establish an effect on the Austrian market, if the target
undertaking is active in a different limited geographic market (not
2.4 What are the jurisdictional thresholds for application of including Austria) and has no turnover in Austria.
merger control?
2.7 Please describe any mechanisms whereby the operation
A concentration has to be notified to the FCA if the following of the jurisdictional thresholds may be overridden by other
accumulative thresholds are fulfilled (based on the revenues of the provisions.
last business year):
1. the combined worldwide turnover of all undertakings In addition to transactions that are not deemed concentrations
concerned exceeds EUR 300 million; pursuant to the Cartel Act, the operation of the jurisdictional
2. the combined Austrian turnover of all undertakings thresholds may be overridden by the application of the effects
concerned exceeds EUR 30 million; and doctrine (see question 2.6 above), and the one-stop-shop under the
3. the individual worldwide turnover of each of at least two of ECMR (see question 1.2 above).
the undertakings concerned exceeds EUR 5 million.
However, even if the above thresholds are satisfied, no obligation to 2.8 Where a merger takes place in stages, what principles
notify exists if: are applied in order to identify whether the various stages
the Austrian turnover of only one of the undertakings constitute a single transaction or a series of transactions?
concerned exceeds EUR 5 million; and
the combined worldwide turnover of all other undertakings There is no Austrian provision similar to Article 5 (2) ECMR.
concerned does not exceed EUR 30 million. However, several concentrations that are part of the same project
and are therefore economically linked may be notified in one
For calculating the turnover thresholds, the revenues of all entities
joint filing, even if the various transactions amount to different
that are linked with an undertaking concerned as defined in Section
types of concentrations.
7 of the Cartel Act must be attributed, i.e. also the turnover of a 25%

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3 Notification and its Impact on the Transaction claimed), and (iii) that the transaction did not lead to competition
Timetable concerns. However, there is no established practice of the
authorities yet as regards the amount of fine to be imposed for gun-
jumping. Another case currently pending before the Supreme
3.1 Where the jurisdictional thresholds are met, is notification Cartel Court, where the parties filed retrospectively on their own
compulsory and is there a deadline for notification?
account, is expected to bring further clarifications.

Austria
For the sake of completeness, please note that a fine of up to 1% of
Concentrations that meet the turnover thresholds must be notified to
the worldwide annual turnover may be imposed, if:
the FCA (unless the transaction has Community Dimension
pursuant to Article 1 ECMR; see also question 1.2 above). There is i) (in cases as described under question 3.2 above) an acquirer
no formal filing deadline; however, a transaction must not be does not comply with an order of the court not to execute its
voting rights or to resell the shares acquired;
implemented prior to obtaining clearance.
ii) incorrect or misleading information was given in a
notification; or
3.2 Please describe any exceptions where, even though the
iii) an undertaking does not comply with an order of the court to
jurisdictional thresholds are met, clearance is not
provide information or to submit documents.
required.

With regard to the banking sector, the Cartel Act excludes certain 3.4 Is it possible to carve out local completion of a merger to
transactions from the applicability of the merger control provisions avoid delaying global completion?
irrespective of whether the turnover thresholds are met, if an
interest in an undertaking is acquired: There is no provision or Court ruling on the permissibility of carve-
i) by a bank for the sole purpose of reselling the interest out mechanisms. On the one hand, any action by which the
acquired; transaction is implemented in the sense of the Cartel Act (see
question 3.7 below) constitutes an infringement of the suspension
ii) by a bank for the sole purpose of restructuring the
undertaking in which the interest is acquired or serving as a clause (see question 3.3 above). On the other hand, the Cartel Act
guarantee for a claim against the respective undertaking; or only applies to facts that may have an impact on the Austrian
market. In view of this, carving out the Austrian part of the
iii) for the sole purpose of managing and commercialising the
interest acquired (investment fund or financing of capital transaction should be possible.
business).
In such a scenario, the acquirer is restricted in the use of his voting 3.5 At what stage in the transaction timetable can the
rights. In case of i) or ii), the acquirer has to resell the interest notification be filed?
acquired within one year or after the restructuring has been
accomplished or after the purpose of the guarantee has ceased to A notification may be filed as soon as the undertakings concerned
exist respectively. can demonstrate their intention to enter into the ultimate transaction
For other exceptions by which the operation of the jurisdictional agreements and close the transaction in the foreseeable future (e.g.
thresholds is overridden, see question 2.7 above. by means of a Memorandum of Understanding or a Letter of
Intention).

3.3 Where a merger technically requires notification and


clearance, what are the risks of not filing? Are there any 3.6 What is the timeframe for scrutiny of the merger by the
formal sanctions? merger authority? What are the main stages in the
regulatory process? Can the timeframe be suspended by
the authority?
Companies must not implement a transaction prior to obtaining
formal clearance. Possible sanctions for the infringement of this
The Official Parties have four weeks upon submission of a
suspension clause are twofold: first, the underlying agreements/acts
notification (provided that the filing fee has been paid in due form;
are null and void; and second, the undertakings may be fined up to
10% of the worldwide annual turnover (by the Cartel Court upon see question 3.10 below) to assess the transaction and decide
application of the Official Parties). Non-compliance with remedies whether to open phase II proceedings before the Cartel Court (by
imposed on the parties is tantamount to breaching the suspension applying for an in-depth investigation).
clause and may lead to similar fines. (See also question 5.6.) A transaction is cleared in phase I if the statutory four-week period
When assessing the amount of fine, the Cartel Court will, in expires and neither of the Official Parties has lodged an appeal for
particular, take into account the severity and duration of the phase II proceedings (the Official Parties have to issue a declarative
infringement, the enrichment achieved by the infringement, the clearance notice to confirm that no application has been lodged). In
degree of fault and the economic capacity of the undertaking. So addition, a transaction is also cleared if both Official Parties waive
far, the highest fine imposed by the Cartel Court for an infringement their right to apply for an in-depth investigation. However, the
of the suspension clause amounted to EUR 1.5 million. In another Official Parties are rather reluctant to grant early clearance.
case, the Cartel Court, however, imposed only a symbolic fine of According to a Notice of the FCA, it will generally only waive
EUR 5,000 for a breach of the suspension clause, as the undertaking its right after two weeks and three days following publication of the
in question filed the acquisition retrospectively on its own initiative. transaction on the FCAs website (which will usually occur on the
Further grounds for the low amount of fine were (i) a minor degree day of submission or the next working day) and only if it
of fault, as the transaction was focussed on Germany and therefore, safeguarded that the transaction does not raise competition
the obligation to notify in Austria, was according to the Cartel concerns.
Court less obvious as in a purely Austrian case, (ii) the fact that Phase II proceedings must be completed within five months after
the belated notification had no negative impact on competition (in the Official Parties have requested an in-depth investigation by the
particular, no enrichment of the purchasing undertaking was Cartel Court. A transaction is cleared in phase II if either of the

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Official Party(ies) withdraw(s) the application for phase II the activities of the parties involved overlap and the parties
proceedings or the Cartel Court clears the transaction (with our account for a combined market share of at least 15%; or
without conditions). the undertakings involved are active on markets up-or
Neither merger authority can expand the timeframe there is no downstream of each other and a market share of 25% is
achieved.
stop-the-clock mechanism. Therefore, if the Official Parties need to
expand the timeframe of the phase I proceeding (for instance, since The only way of obtaining early clearance is by way of applying to
Austria

they have not been provided with the additional information the Official Parties to waive their right to request phase II
required in an information request) they will request an in-depth proceedings (see question 3.6). There are no informal ways to
proceeding before the Cartel Court in order to have more time to speed up the process.
assess the case. If subsequently, they come to the conclusion that
the transaction does not raise concerns, they would withdraw their 3.10 Who is responsible for making the notification and are
application. there any filing fees?

3.7 Is there any prohibition on completing the transaction Every undertaking concerned is entitled to file the notification. In
before clearance is received or any compulsory waiting addition, the seller is generally deemed to be entitled to submit a
period has ended? What are the risks in completing filing.
before clearance is received? The filing fee is EUR 1,500 and has to be paid in cash to a specific
account of the FCA. The original deposit slip has to be submitted with
Transactions must not be consummated prior to obtaining formal the filing in order to trigger the statutory four-week waiting period.
clearance. Infringements of the suspension clause may lead to fines
Should phase II proceedings be opened, the Cartel Court may
of up to 10% of the worldwide turnover of the infringing
impose a (additional) lump sum on the undertakings concerned of
undertaking and nullity of the implementing measures (see question
up to EUR 30,000. When assessing the costs, the court will take
3.3 above). However, we note that the meaning of
into consideration the politico-economic significance of the
implementation has not been clarified ultimately by the Cartel
proceeding, its complexity, the economic capacity of the payer and
Act or the Cartel Court. One ruling suggests, however, that the
to what extent the payer gave reason for the official acts. No
mere acquisition of shares and/or voting rights without the acquirer
additional fees have to be paid for proceedings before the Supreme
exercising any controlling influence does not amount to an unlawful
Cartel Court (i.e. if a decision of the Cartel Court is challenged).
implementation of the transaction. Again, this question has not
been clarified yet.
3.11 What impact, if any, do rules governing a public offer for a
listed business have on the merger control clearance
3.8 Where notification is required, is there a prescribed
process in such cases?
format?

The Austrian merger control regime does not provide for special
The Cartel Act only requires that, in the notification, accurate and
rules for transactions concerning a public offer.
complete information must be provided with regard to all facts by
which a market dominant position may be established or enhanced;
these facts are, in particular, the structure of ownership, the turnover 3.12 Will the notification be published?
on the relevant markets and the respective market shares of each
undertaking concerned, as well as information regarding the general After submission, the FCA will (usually still on the same day or
structure of the market. However, the Official Parties have otherwise on the next working day) publish a short statement on the
published a Form Notification which undertakings are well-advised filing of the notification on its website stating the parties to the
to adhere to. Should the Official Parties find that the submitted concentration, the intended transaction and the affected industry.
information does not suffice to assess the transaction, they usually The publication of this statement triggers the two-week period for
apply for an in-depth investigation to gain time for the assessment, third parties to submit comments on the intended concentration (see
as requests for information do not prolong the statutory four-week question 4.4 below).
period (see question 3.6 above).

4 Substantive Assessment of the Merger and


3.9 Is there a short form or accelerated procedure for any Outcome of the Process
types of mergers? Are there any informal ways in which
the clearance timetable can be speeded up?
4.1 What is the substantive test against which a merger will
If there are no affected markets in the meaning of the Form be assessed?
Notification published by the FCA and the FCP, not all sections of
the Form have to be completed. A merger has to be prohibited by the Cartel Court if it is expected
to lead to the creation or strengthening of a market dominant
An affected market is a market where:
position. An undertaking is dominant in the meaning of the Cartel
the transaction leads to or enhances a market dominant Act if it can act on the market largely independently of other market
position (the Cartel Act provides for a presumption of market
participants. However, the Austrian Cartel Act contains a refutable
dominance if the following market shares are achieved: (i) a
market share exceeding 30%; (ii) a market share exceeding presumption of market dominance if certain market share
5%, if no more than two competitors are active on the same thresholds are met (see question 3.9 above).
market; or (iii) a market share exceeding 5%, if the The Cartel Act foresees that a media merger (see question 2.4) shall
undertaking concerned is one of the four largest undertakings be assessed not only against its compatibility with competition
on the relevant market, which together account for a market rules, but also against the likelihood of the transaction adversely
share exceeding 80%);
affecting media plurality in Austria.

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4.2 To what extent are efficiency considerations taken into 5 The End of the Process: Remedies, Appeals
account? and Enforcement
The Cartel Act explicitly foresees that even if the transaction
creates or strengthens a market dominant position it has to be 5.1 How does the regulatory process end?
cleared if (i) its efficiencies outweigh its detrimental effects, or (ii)

Austria
the merger is economically justified and essential for the Phase I proceedings may end by (i) time lapse, if neither Official Party
international competitiveness of the undertakings concerned. has applied for an in-depth investigation or withdrew their respective
Accordingly, the notification form published by the FCA also asks application(s) within the period of four weeks, or (ii) issuance of a
for such efficiencies in its section 7. waiver by the Official Parties (see also question 3.6 above).
Phase II proceedings before the Cartel Court end by (i) the Official
Parties withdrawing the application for an in-depth investigation,
4.3 Are non-competition issues taken into account in
assessing the merger? (ii) the Cartel Court rejecting the application of the Official Parties,
as the merger was not notifiable, (iii) the Cartel Court declaring the
Non-compete clauses are not assessed by the Official Parties in the merger not compatible with merger control rules, or (iv) the Cartel
merger process. It is the parties responsibility to self-assess Court clearing the notified transaction (subject to conditions or
whether a non-compete is indeed ancillary. When looking at the unconditionally). Decisions of the Cartel Court may be appealed
permissibility of non-compete covenants, the EU benchmark before the Supreme Cartel Court.
(which in principle allows for a two-year non-compete imposed on In addition, the proceedings also end if the parties withdraw their
the seller of a business, and a three-year non-compete if know-how notification.
is transferred together with the divested business) should also be
considered under Austrian law. 5.2 Where competition problems are identified, is it possible to
negotiate remedies which are acceptable to the parties?
4.4 What is the scope for the involvement of third parties (or
complainants) in the regulatory scrutiny process? The Cartel Act expressly foresees the possibility of the undertakings
concerned with the Official Parties on acceptable remedies, in both
Within two weeks upon publication of the filing on the website of phase I and phase II proceedings. Also, the Cartel Court may clear
the FCA, any third party whose legal or economic interests are a transaction subject to restrictions or conditions.
affected by the transaction may submit a written statement to the
FCA and/or the FCP. However, the intervenient has no right to a 5.3 To what extent have remedies been imposed in foreign-
specific treatment of its statement. to-foreign mergers?
Within four weeks upon the publication of the fact that phase II
proceedings have been initiated before the Cartel Court, undertakings As far as can be gathered from the information publicly available,
could submit written statements to the Cartel Court. However, during there have been two cases relating to foreign-to-foreign
the Court proceedings, interveners have no right to a specific treatment transactions, where the undertakings involved agreed on
of their statements and no standing as a party to the proceedings. commitments with the FCA in order to avoid phase II proceedings
With regard to the involvement of the relevant regulatory before the Cartel Court. However, from the limited information
authorities and chambers, see question 1.4 above. available, it may not be excluded that also in these two cases,
Austrian subsidiaries have been involved.

4.5 What information gathering powers does the regulator


enjoy in relation to the scrutiny of a merger? 5.4 At what stage in the process can the negotiation of
remedies be commenced? Please describe any relevant
Generally, the FCA is vested with all the investigative powers that procedural steps and deadlines.
are necessary in order to fulfil its duties. In particular, the FCA may
ask undertakings to provide all necessary information, as well as Remedies can be suggested at any stage during the merger control
review and copy relevant documents. In practice, the FCA sends proceedings as there are no formal deadlines for their submission.
information requests to the undertakings concerned, as well as other If competition concerns are expected, the notifying parties are well-
market participants, i.e. competitors, suppliers and/or customers. advised to submit commitment proposals already in phase I (even
together with the merger notification) in order to avoid that the
Furthermore, the FCA also has the right to conduct a dawn raid, if
Official Parties file an application for an in-depth investigation.
it suspects an infringement of the prohibition to implement a merger
before clearance.
5.5 If a divestment remedy is required, does the merger
authority have a standard approach to the terms and
4.6 During the regulatory process, what provision is there for conditions to be applied to the divestment?
the protection of commercially sensitive information?
There is no official statement of the Official Parties with regard to
When submitting a notification, a non-confidential version of the terms and conditions to be applied to divestments, as remedies are
filing has to be provided. Generally, the FCA does not grant access set individually in each case.
to its file. However, the FCA may forward a non-confidential
version of submissions to third parties for their comments.
5.6 Can the parties complete the merger before the remedies
With regard to proceedings before the Cartel Court, the Cartel Act
have been complied with?
provides for the protection of business secrets: third parties may
only access the file of the Court if all parties to the proceeding agree.
Non-compliance with commitments is tantamount to a breach of the

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suspension clause, i.e. it may entail fines and the respective acts are 6 Miscellaneous
exposed to nullity. It therefore depends on the wording of the
remedy, whether it is allowed to close the transaction prior to
6.1 To what extent does the merger authority in Austria liaise
complying with the undertaken commitment.
with those in other jurisdictions?

5.7 How are any negotiated remedies enforced? The FCA is entitled to provide the European Commission and the
Austria

competition authorities of other EC Member States with all


Non-compliance with remedies is tantamount to a breach of the information and documents required for the fulfilment of their
suspension clause (see also question 3.3 above). Furthermore, the duties. Vice versa, the FCA may also ask for the provision of such
Cartel Court may (upon application of the Official Parties, of the information and documents.
regulatory authorities, of the Chambers of Commerce, Labour or As the FCA is a member of the European and the International
Agriculture or of any undertaking having a legal or economic Competition Network, the FCA cooperates closely with all other
interest in the proceeding) impose subsequent measures or hand- members of the networks. Furthermore, the FCA is part of the
down an order to stop the non-adherence to the remedies imposed. Marchfeld Forum, a platform for Central and Eastern European
Finally, penalties amounting to 5% of the average daily turnover in competition authorities; it attends the annual meetings of the
the preceding business year may be imposed for each day of European Competition Authorities (ECA) and it recently joined the
infringement. Central European Competition Initiative (CECI), a platform for
Currently, the FCA investigates all cases since 2002 (51 merger information exchange between Central European competition
control and 4 antitrust cases), which involved decisions on authorities.
remedies. For this purpose, the FCA sends out questionnaires to
undertakings concerned in order to assess the level of compliance 6.2 Are there any proposals for reform of the merger control
and the effectiveness of the restrictions and conditions imposed. regime in Austria?
The investigation is still ongoing and its completion date is not
foreseeable for the time being. The entering into force of an amendment to the Cartel Act and the
Competition Act is envisaged for 1 January 2013. According to the
5.8 Will a clearance decision cover ancillary restrictions? draft available (which, however, still remains to be adopted), the
most significant amendment to the merger control regime is an
The Cartel Court is believed to follow the EC Notice on ancillary intended introduction of a possibility to extend the deadlines for
restraints, i.e. anti-competitive provisions that are pivotal for the phase I and phase II proceedings. Subject to a respective
success of the concentration and are proportionally covered by the application of the notifying undertaking, the four-week period
clearance decision. (phase I) will be extended to six weeks (such an application may be
reasonable to grant the authorities more time for their assessment in
order to avoid phase II proceedings). Further, phase II proceedings
5.9 Can a decision on merger clearance be appealed? will subject to a respective application by the notifying party be
extended to six (instead of five) months (this amendment shall give
A clearance decision may be appealed before the Supreme Cartel the parties more time to negotiate with the court whether remedies
Court which has two months to decide on the appeal. could solve possible competition concerns).
Other intended changes relate to the abolition of the qualification of
5.10 What is the time limit for any appeal? the conclusion of certain agreements between banks as a notifiable
concentration and a remote increase in the fees for phase II
The ruling of the Cartel Court may be appealed within four weeks proceedings.
upon receipt of the decision.
6.3 Please identify the date as at which your answers are up
5.11 Is there a time limit for enforcement of merger control to date.
legislation?
Our answers are up to date as of September 2012.
A fine may only be imposed by the Cartel Court if either of the
Official Parties has applied for fines within five years from the day
the infringement has been terminated.

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Schoenherr Austria

Stefanie Stegbauer Franz Urlesberger


Schoenherr Schoenherr
Tuchlauben 17 Tuchlauben 17
A-1014 Vienna A-1014 Vienna
Austria Austria

Tel: +43 1 53437 4059 Tel: +43 1 53437 196

Austria
Fax: +43 1 53437 6100 Fax: +43 1 53437 6196
Email: s.stegbauer@schoenherr.eu Email: f.urlesberger@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Stefanie Stegbauer is an attorney at law with Schoenherr in Franz Urlesberger became partner with Schoenherr in 2007. He
Vienna, where she focuses on Austrian and European heads the firms EU & Competition practice group and works in
competition law. Her main areas of practice are merger control the Vienna office. His practice focuses on all aspects of
and antitrust proceedings, both before Austrian competition European and Austrian competition law and on multi-national
authorities and the European Commission, as well as the competition law matters in CEE. Franz represents and advises
implementation of antitrust compliance programmes. She clients in a wide range of industries, including paper and
advises national and international clients in a wide range of packaging, energy, oil and media. He is engaged in all types of
industries, including in particular, undertakings active in the public and private litigation, as well as out-of-court advice, and in
energy and paper sectors. She graduated from law school in merger control work. In addition, he has gained broad experience
2004. Before joining Schoenherr in 2008, she practiced in supporting firms to implement comprehensive anti-trust
competition law with another leading Austrian firm. She is the compliance programmes. Recent headline cases include:
author of numerous articles on Austrian and European representation of Siemens AG sterreich in the European GIS
competition and regulatory law. cartel; of collecting society AKM in the European CISAC case; a
Slovenian Utility company before the European Courts; ASK in
the printing chemicals cartel; and a German company in the
freight forwarding cartel. In 2011, Franz received the award for
Competition practitioner Austria from UK legal publisher ILO.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend
of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be
one of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means
that we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 10

Bosnia & Srana Petronijevi

Herzegovina
Moravevi Vojnovi Zdravkovi
Danijel Stevanovi
in cooperation with Schoenherr

1 Relevant Authorities and Legislation Notice), which governs the required form and content of
merger notifications, as well as certain procedural issues.
The Notice on Defining a Relevant Market (Official Gazette
1.1 Who is/are the relevant merger authority(ies)?
of Bosnia and Herzegovina, no. 18/06), which regulates how
relevant markets are to be defined.
The authority with competence over merger control in Bosnia and
The Notice on the Setting of Periodic Fines providing for
Herzegovina (BiH) is the Competition Council [Konkurencijski daily penalties that can be imposed by the Council (Official
savjet] (Council), an independent administrative body established Gazette of Bosnia and Herzegovina, no. 31/06).
in 2004 and operative as of 2005. The Council is competent for
The Notice on the Amount of Administrative Fees for
enforcing merger control rules in the entire territory of Bosnia and Proceedings before the Council (Official Gazette of Bosnia
Herzegovina covering both entities (the Republic of Srpska and the and Herzegovina, nos. 30/06 and 18/11).
Federation of Bosnia and Herzegovina), as well as the District of
Brcko. The website of the Council is accessible at
www.bihkonk.gov.ba. 1.3 Is there any other relevant legislation for foreign mergers?

In 2010, the Council was composed of six Council members, nine


There are no specific rules regarding foreign mergers. General
employees comprising the technical service, nine employees
merger control rules apply also to foreign mergers provided that the
comprising the support service and two trainees. No information on
respective jurisdictional thresholds are met (please see questions
the composition of the Council is available for 2011 as the Council
2.4 and 2.6 below).
did not publish an annual report for the year 2011.
Pursuant to the information available on the website of the Council
(no 2011 annual report was published), the Council reviewed 1.4 Is there any other relevant legislation for mergers in
particular sectors?
eighteen notifications in 2011, of which it cleared eleven, and
dismissed seven (either because they did not meet the notification
thresholds (five), or because they did not constitute a concentration The Competition Act applies to mergers irrespective of the sectors
in terms of merger control rules (two)). they pertain to. However, certain sector-specific regulations apply
to mergers in certain sectors:
Merger control decisions can be challenged before the Court of
Banking: Direct or indirect acquisitions of a qualified
Bosnia and Herzegovina [Sud Bosne i Hercegovine].
shareholding (i.e. 10%, 33%, 50% and above 66.7%) in
banks are subject to approval by regulatory agencies
1.2 What is the merger legislation? competent for the Republic of Srpska and the Federation of
Bosnia and Herzegovina. Also the acquisition of control
over a company by a bank requires prior approval by the
Merger control rules are regulated by the Law on Competition
respective agencies.
[Zakon o konkurenciji] (Official Gazette of Bosnia and
Herzegovina, nos. 48/05, 76/07 and 80/09) (the Competition Act), Media: Rules for broadcasting licences stipulate that any
change in the shareholding structure of a licence holder
which came into force on 27 July 2005 and was last amended in
relating to more than 10% of the shares is subject to approval
2009.
by the competent agencies.
The Competition Act regulates both the substantive and procedural Telecommunications: Under the Communications Act
aspects of merger control. To the extent that some procedural rules (Official Gazette of Bosnia and Herzegovina nos. 31/03,
are not regulated by the Competition Act, the Law on General 75/06 and 32/2010), the Agency of Communications of
Administrative Proceedings [Zakon o optem upravnom postupku] Bosnia and Herzegovina can stipulate the conditions and
(Official Gazette of Bosnia and Herzegovina, nos. 29/02, 12/04 and actions in view of preventing abuse of strong positions in
88/07) applies subsidiarily. the telecommunications market.
Certain aspects of merger control are further regulated in secondary Concessions: The laws on concessions regulating
legislation, namely: infrastructure building and exploitation of natural resources
establish three different concession authorities (one for the
The Notice on the Form of a Merger Notification and the whole territory of Bosnia and Herzegovina, and two for each
Criteria for evaluating a Concentration (Official Gazette of of the two states), as well as three similar, but different,
Bosnia and Herzegovina, no. 34/10; the Implementing concession regimes.

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2 Transactions Caught by Merger Control business year preceding the concentration is at least BAM
Legislation 100 million (approximately EUR 50 million); and
Bosnia & Herzegovina

the aggregate revenue of each of at least two undertakings


concerned achieved by selling goods and/or services on the
2.1 Which types of transaction are caught in particular, how market of Bosnia and Herzegovina in the business year
is the concept of control defined? preceding the concentration is at least BAM 8 million
(approximately EUR 4 million) or their joint market share on
The Competition Act catches the following types of concentrations: the relevant market(s) exceeds 40%.
mergers and acquisitions of two or more independent Article 2 of the Implementing Notice further specifies the turnover
undertakings or parts thereof; thresholds prescribed by the Competition Act, i.e. pursuant to
any acquisition of direct or indirect control over another Article 14 of the Competition Act, the worldwide and national
undertaking or parts thereof by one (sole control) or more turnover thresholds must be cumulatively met in order for an
undertakings (joint control); and obligation to notify a transaction to be established; the
establishments of joint ventures performing on a long-term Implementing Notice, however, sets out that (i) in case the
basis all functions of an autonomous undertaking. undertakings concerned are registered outside Bosnia and
An undertaking is deemed to have control over another undertaking Herzegovina, the notification obligation exists if the thresholds are
if it can exercise decisive influence on the latters activities. Such met cumulatively, while (ii) in case the undertakings concerned are
influence can be based on (ownership or voting) rights, agreements registered in Bosnia and Herzegovina the notification obligation
or any other legal or factual basis. exists even if only the local thresholds are met. Thus, although it
Pursuant to numerous official opinions and conclusions rendered by can be argued that the Council via its interpretation of the
the Council (see e.g. Council Conclusion no. 01-26-1-02-5-II/11 of Competition Act actually defined a rule that it is not coherent with
23 March 2011 and Council Opinion no. 01-26-7-852-2-I/10 of 18 the one prescribed by the Competition Act (and that thereby it
January 2011), intra-group acquisitions and restructurings are not exceeded its competences), the Council enforces Article 2 of the
caught by merger control rules. Implementing Notice in practice and therefore transactions without
a cross-border element only have to meet the national thresholds in
order to be notifiable (see Council Decision no. 01-05-26-033-22-
2.2 Can the acquisition of a minority shareholding amount to II/09 of 23 March 2010 in case Optima Grupa/Zovko/Zovko Oil). In
a merger? return, local presence is not required for a transaction to be
notifiable as long as the national thresholds are met by selling goods
Yes, provided that the acquisition of a minority shareholding and/or services on the market of Bosnia and Herzegovina (see
confers (sole or joint) de facto or de jure control over the target on Council Opinion no. 01-01-26-738-5-I/09 dated 21 October 2009).
the acquiring undertakings (see also question 2.1).
Turnovers are calculated by taking into account all revenues
For example, in HVB Capital Partners/Comtrade Group (Council derived from sale of products or provision of services in the year
Decision 01-04-26-002-16-II/08 of 13 May 2008) the Council preceding the year in which the concentrations is notified, after the
decided that the acquisition of a 20% interest conferred decisive deduction of exercise duties. The turnover of an undertaking
influence on HVB Capital Partners by enabling HVB Capital assumes the total turnover of the group it belongs to, save for intra-
Partners to take strategic commercial decisions in the target company group sales which are not taken into account. For the calculation of
and thus amounted to the acquisition of control over Comtrade. local (national) turnover, in addition to the foregoing, the value of
Therefore, it is advisable that the Council is approached for an exports has to be deducted. If control is acquired over part of an
official opinion if it is not clear whether the acquisition of minority undertaking, only the turnover attributable to that part is to be taken
interest (and or certain veto rights) confers control over the target. into account. In case of joint ventures, total group turnovers of both
joint venture partners are to be taken into account. However, there
are no guidelines or clearly developed practice that would provide
2.3 Are joint ventures subject to merger control?
sufficient guidance on which are the undertakings concerned and
how revenues are to be allocated. Such a state of affair in certain
Yes, joint ventures are subject to merger control. However, only
instances results in uncertainties in practice.
certain joint ventures are subject to merger control, i.e. when two or
more independent undertakings establish a new undertaking, which Special rules for calculation of revenue apply to banks, insurance
operates on a lasting basis and has all the functions of an companies and other financial institutions. In that regard, the
independent undertaking (i.e. full-function joint ventures) and relevant revenues consists of the net aggregate income generated
which does not purport to coordinate the market activities of the from (i) interests, (ii) commissions, (iii) net profits from financial
independent undertakings acquiring control. transactions, (iv) income from equity securities and share capital,
and (v) income from other business activities. Regarding insurance
However, if the establishment of a joint venture purports to
companies, the thresholds are calculated by taking into account the
coordinate the market activities of two or more independent
value of written gross premiums.
undertakings, the joint venture is not deemed a concentration, but
shall be assessed under rules regulating restrictive agreements. As for the 40% relevant market threshold, the Competition Act calls
for a joint market share; however, there are no guidelines or clearly
developed practice whether the market share can be reached by a
2.4 What are the jurisdictional thresholds for application of single undertaking or only jointly by two undertakings.
merger control?
Nonetheless, it can be assumed that the Council would find the
market share threshold is met even by a single undertaking and/or
Under the Competition Act, a transaction has to be notified if both where there is no horizontal overlap (i.e. in the case of vertical and
of the following thresholds are met: conglomerate mergers). The relevant market is defined pursuant to
the aggregate worldwide revenue of all the undertakings the Notice on Defining a Relevant Market (Official Gazette of
concerned achieved by selling goods and/or services in the Bosnia and Herzegovina, no. 18/06), under which the Council

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assumes national markets, but may consider markets wider than irrespective of the aggregate turnovers of the parties to the
national if Bosnia and Herzegovina forms part of such a market. concentration. However, if the jurisdictional thresholds are
exceeded, merger clearance is also required in addition to the

Bosnia & Herzegovina


Thus, if the prescribed thresholds are met, a filing obligation is
triggered. A transaction shall be assessed by the Council on the approval of the sector-specific regulator.
basis of various factors provided for by the Competition Act and the
Implementing Notice. A concentration has to be notified even 2.8 Where a merger takes place in stages, what principles
where the merger does not raise any competition concerns and/or are applied in order to identify whether the various stages
has no domestic effect. constitute a single transaction or a series of transactions?
However, a concentration may be appraised by the Council ex
officio even if the prescribed thresholds are not met. Namely, upon In the event of staggered transactions, the notification obligation is
learning of an implemented concentration, the Council may carry triggered at the moment of the acquisition of the share that enables
out an assessment of the respective concentration ex officio if the the acquirer to exercise decisive influence over the target.
Council considers that the merger is likely to cause a considerable Therefore, prior as well as subsequent acquisition(s) of shares in the
prevention, restriction or distortion of competition. The same target do not trigger a (additional) filing obligation(s). Two or
Competition Act does not prescribe deadlines in which it may open more concentrations between identical undertakings performed in
ex officio proceedings and/or impose measures for removing the period of less than two years shall be considered as one
competitive concerns. However, such transactions may voluntarily concentration that occurred on the date of the last of such
be notified to the Council on a fail-safe basis, or alternatively, the consecutive concentrations.
parties to a transaction may request the Council to render an official
opinion on whether the transaction is notifiable.
3 Notification and its Impact on the Transaction
Timetable
2.5 Does merger control apply in the absence of a
substantive overlap?
3.1 Where the jurisdictional thresholds are met, is notification
compulsory and is there a deadline for notification?
Yes. The applicability of merger control rules does not require the
existence of a substantive overlap. The only criterion for the
Notification is compulsory when the thresholds set by the
applicability of merger control rules is the fulfilment of one of the
Competition Act are met (please see question 2.4 above), save for
turnover thresholds outlined in question 2.4 above.
certain exceptions (please see question 3.2 below).
This was made clear by the Council in ez/Mol (no. 01-06-26-015-
A concentration has to be notified within fifteen days following any
5-II/08, dated 12 June 2008), provided that the jurisdictional
of the following acts, whichever occurs first: (i) conclusion of an
thresholds are exceeded, a concentration has to be notified even
agreement representing the legal basis for a concentration (e.g.
where the merger does not raise any competition concerns in Bosnia
share purchase agreement, joint venture agreement, agreement on
and Herzegovina.
incorporation, etc.); (ii) publication of a public bid; or (iii) the
acquisition of control.
2.6 In what circumstances is it likely that transactions Since the 2009 amendments of Competition Act, the Bosnian
between parties outside Bosnia (foreign-to-foreign
competition regime provides for a possibility that a transaction be
transactions) would be caught by your merger control
notified on the basis of serious intent to implement a concentration
legislation?
(e.g. on the basis of a Framework Agreement, a Letter of Intent, a
Memorandum of Understanding signed by all the parties to the
Any foreign-to-foreign merger is subject to merger control in
concentration or based on a publicly announced intent to submit a
Bosnia and Herzegovina if the jurisdictional thresholds are met. A
public bid).
domestic effects doctrine has not yet been adopted by the Council,
although Article 2 of the Competition Act provides that the Under the Competition Act, if control over the whole or part of one
Competition Act applies to acts which have, or might have, effects or more undertakings is acquired by another undertaking, the
on competition in the territory of Bosnia and Herzegovina. notification has to be submitted by the undertaking acquiring
However, the decisional practice so far is not supporting the view control. In all other cases, the notification has to be submitted
that a transaction, besides meeting the jurisdictional thresholds, also jointly by the undertakings concerned.
needs to have an effect on competition in Bosnia and Herzegovina The Competition Act provides for fines of up to 1% of the total
in order to trigger a filing obligation. Hence, foreign-to-foreign annual worldwide revenue of the undertaking(s) that fail to meet the
transactions that meet the jurisdictional thresholds of the notification deadline. In its practice, the Council determines fines
Competition Act trigger a filing obligation in Bosnia and in relation to the total annual worldwide revenue of the notifying
Herzegovina. undertaking(s), i.e. the applicant(s) (see e.g. Council Decision no.
01-05-26-033-22-II/09 of 23 March 2010 in case Optima
2.7 Please describe any mechanisms whereby the operation
Grupa/Zovko/Zovko Oil and Council Decision no. 01-01-26-012-
of the jurisdictional thresholds may be overridden by other 12-II/08 of 19 June 2008 in case Volkswagen AG/Scania AB.).
provisions. The Councils fining policy for delays in notifying transactions (i.e.
notifying after deadlines for notifying have lapsed) has proven very
There are no mechanisms which provide for the jurisdictional strict in practice. In Telekom Slovenia/Blic.Net (Council Decision
thresholds to be overridden. However, the applicability of the no. 01-02-26-039-3-II/07 of 30 January 2008), the Council fined the
sector-specific regulation outlined in question 1.4 does not require applicant (Telekom Slovenia) with BAM 200,000 (approximately
the turnover thresholds stipulated in the Competition Act to be met. EUR 100,000) for a 10 month delay. In Cez/Mol/JV (Council
Direct or indirect acquisitions of qualified shareholdings in certain Decision no. 01-06-26-015-5-II/08 of 12 June 2008), the Council
sectors, in principle, require approval of the competent regulator imposed on the applicants (Cez and Mol) a fine of BAM 150,000

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(approximately EUR 75,000) in for a 4-month delay, while in turnover realised in the last financial year by the
Volkswagen AG/Scania AB (Council Decision no. 01-01-26-012- undertakings concerned. Besides the undertakings, the
12-II/08 of 19 June 2008), a fine in the same amount was imposed responsible person(s) within the company is/are also exposed
Bosnia & Herzegovina

on the applicant (Volkswagen AG) for a 26 day delay. In January to fines up to BAM 15,000 (approximately EUR 7,500).
2009, in the case Dukat/Kim (Council Decision no. 01-06-26-040- In Integral/Jedinstvo (Council Decision no. 01-03-26-004-14-II/09
17-II/08 of 13 January 2009), the applicant (Dukat) was fined BAM of 23 April 2009) and Optima Grupa/Zovko/Zovko Oil (Council
20,000 (approximately EUR 10,000) even for a delay of two days. Decision no. 01-05-26-033-22-II/09 of 23 March 2010), the
Council ex officio initiated proceedings over alleged failure to
obtain clearance before closing. Although the transactions were
3.2 Please describe any exceptions where, even though the
jurisdictional thresholds are met, clearance is not
subsequently cleared, the Council imposed fines of BAM 260,000
required. (approximately EUR 130,000, i.e. 0.10-0.15% of total annual
worldwide revenue) and BAM 200,000 (approximately EUR
Pursuant to the Competition Act, the following transactions are not 100,000 i.e. 0.79% of total annual worldwide revenue) on the
caught by merger control rules irrespective of the revenue of the respective would-be applicants for closing without obtaining
undertakings concerned: clearance.
the temporary acquisition of shares by a bank, other financial
institution or an insurance company for resale within 12 3.4 Is it possible to carve out local completion of a merger to
months (this duration can be extended by 6 months), avoid delaying global completion?
provided that during this period the shareholders rights are
not exercised to influence business decisions of the Hold separate structures have not yet been tested before the
respective undertaking in a manner that would affect market Council. Having in mind the Councils conservative approach, such
competitiveness of the undertaking concerned or prevent
carve-out mechanisms might not be accepted. Undertakings may
competition on the relevant market;
consider making use of the financial institution exception in order
the acquisition of control by persons acting as a bankruptcy to carve-out clearance proceedings in Bosnia and Herzegovina.
or liquidation receiver [stecajni ili likvidacioni upravnik];
However, acquisitions of companies by banks are subject to control
and
by the respective financial authority (please see question 3.2
the establishment of a co-operative joint venture (which is
above).
not full-function), i.e. a joint venture which coordinates the
market activities between the joint venture partners (as it
shall be assessed under rules regulating restrictive 3.5 At what stage in the transaction timetable can the
agreements). notification be filed?

3.3 Where a merger technically requires notification and Parties to a transaction may notify it to the Council as soon as they
clearance, what are the risks of not filing? Are there any can demonstrate their serious intent to enter into an agreement, e.g.
formal sanctions? by signing a letter of intent, publicising their intent to make an offer
or by any other way which precedes any of the triggering events
The undertakings concerned are under an obligation to notify the (please see question 3.1 above).
transaction within the prescribed deadline and to suspend the
implementation of the transaction until the transaction is cleared (or 3.6 What is the timeframe for scrutiny of the merger by the
legally deemed to have been cleared). Undertakings that do not merger authority? What are the main stages in the
notify the transaction or infringe the suspension clause may face the regulatory process? Can the timeframe be suspended by
following sanctions: the authority?
If the transaction is found to have resulted in a considerable
restriction of competition, especially by the creation or After the filing of the notification, the Council assesses the
strengthening of a dominant position on the market of Bosnia completeness of information and documents provided in the filing.
and Herzegovina or on a part thereof, the Council is In case the notification is incomplete, the Council will request the
authorised to impose fines of up to 10% of the total annual notifying parties to complete it within 8 days. In exceptional cases,
turnover realised in the last financial year by the the Council may prolong the deadline for an additional 15 days.
undertakings concerned. In addition, the responsible
person(s) within the undertaking concerned is/are also However, once the Council finds that the notification is complete, it
exposed to fines up to BAM 50,000 (approximately EUR may either: (i) decide to clear the concentration in a summary
25,000). The Council can also impose appropriate measures proceeding (Phase I) within 30 days if it finds that the concentration
to restore effective competition on the relevant market. Such is unlikely to raise competition concerns; or (ii) open a formal
measures may take the form of (i) the re-transfer of the investigation (Phase II) if it finds that the concentration may raise
acquired shares, (ii) the suspension or limitation of voting competition concerns.
rights in undertakings participating in concentration, and/or
(iii) the termination of control over joint venture and other In case the Council decides to initiate a formal investigation, it is
forms of concentration. So far, no decisions have been obliged to render a decision within 3 months of the beginning of
rendered in this respect. In general it can be perceived that such Phase II proceedings. The investigation begins with a formal
the wide competences would enable the Council to written decision of the Council. Once the investigation is opened,
effectively unwind concentrations performed without prior the Council has a spectrum of possibilities to acquire relevant
merger clearance, if the respective concentration leads to a evidence: to request data, statements (oral and/or written) and
considerable restriction of competition on the relevant documents from the parties; to inspect documents and databases, if
market. required on the premises of the parties (including movable property,
If the transaction has not resulted in a considerable restriction i.e. vehicles); or to acquire data, statements and documents from
of competition on the market of Bosnia and Herzegovina, the third parties. The Council can prolong the investigation for an
Council may impose fines of up to 1% of the total annual

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additional 3 months if the circumstances of a given case demand so. control. In all other cases, the notification has to be submitted
After the investigation has been concluded, the Council may clear jointly by the undertakings concerned.
the concentration conditionally or unconditionally or prohibit the

Bosnia & Herzegovina


Filing fees amount to BAM 2,000 (approximately EUR 1,000). In
concentration. addition, the parties have to pay a clearance fee of BAM 2,500
(approximately EUR 1,250) if the concentration is cleared in Phase
3.7 Is there any prohibition on completing the transaction I proceedings, whereas the fee amounts to BAM 25,000
before clearance is received or any compulsory waiting (approximately EUR 12,500) if an investigation procedure in Phase
period has ended? What are the risks in completing II is initiated.
before clearance is received?

3.11 What impact, if any, do rules governing a public offer for a


The undertakings concerned are under the obligation to suspend the
listed business have on the merger control clearance
implementation of the transaction until the transaction is cleared or process in such cases?
until the waiting period has lapsed (see question 3.6 above). The
Competition Act deals with possible restrictions of competition on Pursuant to the Competition Act, in case of acquisition of control
the market of Bosnia and Herzegovina and it should be presumed through a public offer that has been duly notified to competition
that the suspension effects should be local rather than global. authorities, the parties to a concentration may finalise the public
However, there is neither an explicit provision in the Competition offering notwithstanding the general rule that concentrations must
Act, nor any decisional practice in this respect. For the risks of be suspended until they are cleared (or respective waiting periods
completing a concentration before obtaining clearance, please see have passed).
question 3.3 above.

3.12 Will the notification be published?


3.8 Where notification is required, is there a prescribed
format?
The Competition Act provides that some information on the
notification has to be published in the daily press. The publication
Besides the Competition Act, rules regulating the form and the data
shall contain (i) the names of the undertakings concerned, (ii) a
to be provided by a merger notification are set out in the
brief description of the transaction, and the (iii) affected industry.
Implementing Notice, which provides only a single form for merger
notifications, i.e. it does not provide for a short-form notification. The Council shall also publish its decisions (with respect to the
In its practice, the Council is rather formalistic, as it (in principle) legitimate interests of the parties to the concentration and third
requires certified excerpts from commercial registers (properly parties) in the Official Gazette of Bosnia and Herzegovina, as well
legalised where applicable), certified financial statements/annual as on the Councils website (www.bihkonk.gov.ba).
reports (properly legalised where applicable), legalised power of
attorney, and legalised copies of two separate documents which 4 Substantive Assessment of the Merger and
form part of the merger notification: (i) the Statement on the
Outcome of the Process
Correctness and Accuracy of Data provided in the Merger
Notification; and (ii) the Report on the Reasons for carrying out the
Concentration. All documents have to be coupled with a 4.1 What is the substantive test against which a merger will
corresponding certified translation to one of the languages officially be assessed?
in use in Bosnia and Herzegovina (Bosnian, Serbian and Croatian).
The Council is empowered to request any other information it Pursuant to the Competition Act, the Council makes a prospective
considers relevant for the assessment of the intended concentration. analysis of whether a notified concentration would cause a
Similarly, the applicant may submit other information and considerable restriction of competition, in particular, as a result of
documents that it considers relevant for the assessment of the the creation or strengthening of a dominant position. When
envisaged concentration. carrying out its assessment, the Council will take into account the
following factors:
the structure of the relevant market;
3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which the effects of the concentration on existing and potential
the clearance timetable can be speeded up? competitors;
the positions of undertakings concerned, their market shares
There is no short-form procedure for any types of mergers. The and their economic and financial power;
Implementing Notice prescribes only one type of the format in freedom of choice when choosing suppliers and consumers;
which the merger notification shall be submitted to the Council. economical, legal and other market entry barriers;
The only way to speed up the clearance timetable is to supply the the domestic and international level of competitiveness of the
Council with a notification that is as detailed as possible, in undertakings involved in the concentration;
accordance with relevant rules applicable to the contents of trends of supply and demand of the relevant goods and/or
notifications (please see question 3.8 above). services;
trends of technical and economic development; and
3.10 Who is responsible for making the notification and are consumers interests.
there any filing fees? In the Klas/Sprind case (Council Decision no. 01-06-26-033-65-
II/08 of 6 April 2009), the Council found that an envisaged merger
Under the Competition Act, if control over the whole or part of one of pastry producers active in the municipality of Sarajevo would
or more undertakings is acquired by another undertaking, the amount to a considerable restriction of competition by the
notification has to be submitted by the undertaking acquiring strengthening of a dominant position; consequently, the Council

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prohibited the merger. The test applied by the Council included the 4.6 During the regulatory process, what provision is there for
assessment on the market shares of the parties, their competitors, the protection of commercially sensitive information?
the possibilities to expand production, the parties trend of growth,
Bosnia & Herzegovina

the barriers to entry and the consumers freedom of choice. This The Competition Act provides that an applicant may request that
was the first, and so far the only, merger prohibited by the Council. certain information submitted to the Council is treated as
confidential. Such information cannot be disclosed or published if
it relates to sensitive commercial information and information
4.2 To what extent are efficiency considerations taken into
affecting the privacy of third parties. The Councils website
account?
(www.bihkonk.gov.ba) contains detailed rules and guidelines on the
classification of information and relevant procedures.
Neither the Competition Act, nor the applicable by-laws, explicitly
mention or discuss efficiency considerations. However, the
Implementing Notice requires that expected benefits resulting from 5 The End of the Process: Remedies, Appeals
the concentration be named. The Implementing Notice particularly and Enforcement
mentions benefits such as lower prices, better quality, innovation
and greater consumer choice. Thus, efficiency considerations form
part of the substantive assessment, although this is not reflected in 5.1 How does the regulatory process end?
the Councils decisional practice.
Pursuant to the Competition Act, the Council may either:
reject the notification if the jurisdictional thresholds are not
4.3 Are non-competition issues taken into account in
met or the notified transaction is not a concentration in terms
assessing the merger?
of merger control rules;
cease the procedure if the notification is withdrawn;
No. The Competition Act and applicable by-laws are not concerned
with non-competition issues, nor are they given a prominent role in clear the concentration unconditionally;
merger analysis, although they may be reflected upon by the clear the concentration subject to conditions; or
Council in the course of review. prohibit the concentration.

4.4 What is the scope for the involvement of third parties (or 5.2 Where competition problems are identified, is it possible
complainants) in the regulatory scrutiny process? to negotiate remedies which are acceptable to the
parties?
The Competition Act provides that some information on the
notification has to be published in the daily press. The publication Even though the Competition Act does not explicitly provide for the
shall contain the names of the undertakings concerned, a brief submission of remedy proposals, the Council may clear a
description of the transaction and the affected industry. Although, transaction subject to conditions. If it finds that a concentration
the matter is not regulated further by the Competition Act or by- may be cleared only subject to commitments, it shall set forth the
laws, we believe third parties can provide the Council with measures to be taken and the corresponding timeline to be complied
information, data and opinions relevant for the transaction under with. However, neither the Competition Act, nor applicable by-
review. laws, make a distinction between behavioural and structural
remedies. Nonetheless, it does allow for any measure to be taken in
order to restore effective competition in the market. In that sense,
4.5 What information gathering powers does the regulator
the Council may impose the following measures (i) the re-transfer
enjoy in relation to the scrutiny of a merger?
of the acquired shares, (ii) the suspension or limitation of voting
rights in undertakings participating in concentration, and/or (iii) the
In general, the Competition Act vests the Council with broad
termination of control over joint venture and other forms of
investigative powers, as it has a spectrum of possibilities to acquire
concentration. It is believed that remedy proposals can be
relevant evidence: to request data, statements (oral and/or written)
submitted at any stage during the review process.
and documents from the parties; to inspect documents and
databases, if required on the premises of the parties (including
movable property, i.e. vehicles); as well as to acquire data, 5.3 To what extent have remedies been imposed in foreign-
statements and documents from third parties. The Council is to-foreign mergers?
entitled to request information irrespective of whether such
information is confidential or not. The Council may also issue To the best of our knowledge, no (foreign-to-foreign) concentration
interim measures. has yet been approved subject to conditions.
Pursuant to the Competition Act, non-compliance with investigative
measures may lead to fines of up to up to 1% of the total annual 5.4 At what stage in the process can the negotiation of
(worldwide) revenue in the last business year. Moreover, the Notice remedies be commenced? Please describe any relevant
on the Setting of Periodic Fines provides for daily penalties procedural steps and deadlines.
amounting to a maximum of 5% of the average daily revenue in the
preceding year for failing to disclose true and complete data. Please see question 5.2.
Persons responsible for the accuracy and correctness of data were
fined with BAM 5,000 (approximately EUR 2,500) in several cases 5.5 If a divestment remedy is required, does the merger
for supplying inaccurate information in merger notifications (e.g. in authority have a standard approach to the terms and
Anex/Koming-Pro (Council Decision no. 01-03-26-054-15-II/08 of conditions to be applied to the divestment?
16 March 2009) and Klas/Sprind (Council Decision no. 01-06-26-
033-65-II/08 of 6 April 2009)). The Competition Act does not address divestment remedies in

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detail, but only provides that a transaction can be cleared subject to 5.10 What is the time limit for any appeal?
conditions. As described, the Competition Act applies to foreign-
to-foreign transactions and the Council may impose any measure it The time limit for appeal is 30 days from the day of receipt (or

Bosnia & Herzegovina


deems necessary to restore effective competition including the publication) of a decision.
obligation of the parties to divest assets. However, it should be
noted that the Competition Act does not explicitly recognise the
5.11 Is there a time limit for enforcement of merger control
ability of the Council to request a divestiture outside of Bosnia and
legislation?
Herzegovina and such a request has not yet been tested in practice.
The limitation period for imposing a fine for infringing the
5.6 Can the parties complete the merger before the remedies suspension clause is 5 years, while the limitation period for
have been complied with? imposing fines for (i) notifying the transaction based on false and
inaccurate data, (ii) failing to notify in due time, or (iii) failing to
Pursuant to the Competition Act, the parties cannot implement the observe the Councils decision/order, is 3 years. The limitation
merger before meeting all conditions determined by the conditional period for enforcing a fines decision is 5 years following the
clearance. The Council may revoke conditional clearance if the decision becoming legally binding. The absolute limitation period
parties fail to fulfil the imposed obligations or it may modify the is twice the limitation period for the breach.
clearance if the relevant conditions are violated due to
circumstances which could not be foreseen or prevented and which
are not dependent on the will of the parties. In exceptional 6 Miscellaneous
circumstances, the Council may allow the parties to consume a
transaction prior to meeting the respective conditions. 6.1 To what extent does the merger authority in Bosnia liaise
with those in other jurisdictions?
5.7 How are any negotiated remedies enforced?
The Council is a member of the International Competition Network
since 2005. It also signed a number of memorandums of
Remedies are enforced in several ways. Firstly, a conditionally
understanding with the national competition authorities of Serbia,
approved concentration may be performed only once the terms and
Croatia, Macedonia, Bulgaria and Turkey. The memorandums have
conditions have been complied with (unless the Council for
not been publicised and are only described in very broad terms on
justified reasons decides otherwise). Secondly, the Council may
the Councils website (i.e. that they relate to exchanges of sources
change (and thus revoke) its conditional decision. Thirdly, the
of legal rules). Only in relation to the memorandum of
Council may impose fines of up to 10% of the total annual turnover
understanding signed with the competition authority of Croatia, is it
realised in the preceding financial year, while responsible person(s)
stated that non-confidential information pertaining to actual cases
within the undertaking concerned is/are also exposed to fines up to
before these authorities may be exchanged. It is not known that the
BAM 50,000 (approximately EUR 25,000).
Council has used some of the possibilities stemming from these
agreements in merger control proceedings.
5.8 Will a clearance decision cover ancillary restrictions?

6.2 Are there any proposals for reform of the merger control
Neither the Competition Act, nor any by-laws, regulate the issue of
regime in Bosnia?
ancillary restraints. To the best of our knowledge, the Council has
not dealt with the issue of ancillary restraints in its case law.
There are currently no proposals for reform of the merger control
However, at the same time, there is nothing to prevent the Council
regime in Bosnia.
from also clearing ancillary restraints in its decisions.

6.3 Please identify the date as at which your answers are up


5.9 Can a decision on merger clearance be appealed?
to date.

Yes. Merger control decisions of the Council can be appealed 18 September 2012.
before the Court of Bosnia and Herzegovina.
Most appeals brought before the Court of Bosnia and Herzegovina
concerned fines imposed by the Council for delayed notifications,
but the Court confirmed most Council decisions. For example, it
refused to lower the fine in amount of BAM 260,000 (approx. EUR
130,000) imposed in the Integral/Jedinstvo case (Council Decision
no. 01-03-26-004-14 -II/09 of 23 April 2009), for closing without
clearance.

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Srana Petronijevi Danijel Stevanovi


Bosnia & Herzegovina

Moravevi Vojnovi Zdravkovi Moravevi Vojnovi Zdravkovi


in cooperation with Schoenherr in cooperation with Schoenherr
Francuska 27 Francuska 27
11000 Belgrade 11000 Belgrade
Serbia Serbia

Tel: +381 11 320 2600 Tel: +381 11 320 2600


Fax: +381 11 320 2610 Fax: +381 11 320 2610
Email: s.petronijevic@schoenherr.rs Email: d.stevanovic@schoenherr.rs
URL: www.schoenherr.rs, www.schoenherr.eu URL: www.schoenherr.rs, www.schoenherr.eu

Srana Petronijevi is a partner (Serbia) with Moravevi Danijel Stevanovi has been an associate with Moravevi
Vojnovi Zdravkovi in cooperation with Schoenherr where she Vojnovi Zdravkovi in cooperation with Schoenherr since 2009
heads up the firms competition and white-collar crime practice. and is a member of the firms EU & Competition practice. He
She has been involved in numerous high-profile merger control deals with all aspects of competition law in several jurisdictions
proceedings before the Serbian competition authorities and (Serbia, Montenegro, Bosnia and Herzegovina, Macedonia,
coordinated global merger control filings, particularly in the former Albania and Kosovo) with a particular emphasis on merger
republics of Yugoslavia. In addition, she also advises clients on control. Danijel has advised international clients in various
all aspects of antitrust law and while-collar criminal law. She has sectors (including oil & gas, basic resources, construction &
designed a number of compliance programmes for our larger materials, industrial goods & services, automobiles & parts, food
corporate clients, tailor-made to their individual needs. Another of & beverage, personal & household goods, retail, media,
Sranas key tasks is advising clients on all aspects of criminal telecommunications and technology) in respect of multi-
compliance and white-collar crime matters in Serbia, while also jurisdictional merger control filings and behavioural
providing full coverage in Bosnia and Herzegovina, Macedonia, investigations, as well as on various aspects of market behaviour
Montenegro and Kosovo via specialised country desks. Sranas and competition law compliance. Danijel holds an LL.M. degree
client base is wide and varied and covers the from the Central European University in Budapest where he
telecommunications, energy, insurance, banking, construction, focused on EU competition law. He is fluent in English,
real estate, road development, pharmaceutical, media and IT Hungarian and Serbian.
industries. Srana holds a LL.M in International Business Law.

Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr has been active on the Serbian market since 2002. The firms
practice is client-orientated, with specialised practice groups that provide industry-focused services to meet the demand of a
competitive, developing and rapidly changing marketplace.
In addition to the Serbian practice, Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr is frequently engaged in
Bosnia and Herzegovina, Montenegro, Macedonia and Kosovo. The firms client list includes leading companies, financial
institutions, organisations and governments. The Belgrade office, via its specialised country desks, acts as a hub for Bosnia-
Herzegovina, Macedonia, Montenegro and Kosovo.
Schoenherr is a leading corporate law firm in Central and Eastern Europe, operating through offices in Belgrade, Bratislava,
Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna, Warsaw and Zagreb. Operating in a
rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of experienced lawyers and young
talent. Our comprehensive coverage of the region means we can offer solutions that perfectly fit the given industry, jurisdiction
and company.

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Chapter 12

Bulgaria Ilko Stoyanov

Advokatsko druzhestvo Andreev, Stoyanov


& Tsekova in cooperation with Schoenherr Mariya Papazova

1 Relevant Authorities and Legislation only criterion for the appraisal whether a concentration shall be
notified at CPC.

1.1 Who is/are the relevant merger authority(ies)?


1.4 Is there any other relevant legislation for mergers in
Commission for the Protection of Competition particular sectors?

The authority primarily empowered to enforce merger control rules


In addition to the LPC, specific rules apply to concentrations (see
in Bulgaria is the Commission for the Protection of Competition
question 2.1 below), inter alia, in the banking and insurance
(CPC, www.cpc.bg), established in 1991. CPC is an independent
sectors. In particular, the acquirer of shares in a bank or an
and specialised state body. The CPC consists of five members a
insurance company is obliged to seek the prior approval of the
chairperson, a deputy chairperson and three members who are
Bulgarian National Bank or the Financial Supervision Commission,
elected by the National Assembly. The members of the CPC board
respectively, if the acquisition will lead to an increase of its
are elected for a five-year period.
shareholding above certain thresholds. Absent clearance, the
The current board of the CPC was elected in 2011. acquirer must not exercise the rights attached to the acquired shares.
Supreme Administrative Court
CPC decisions may be appealed before the Supreme Administrative 2 Transactions Caught by Merger Control
Court.
Legislation

1.2 What is the merger legislation?


2.1 Which types of transaction are caught in particular, how
is the concept of control defined?
The main regulatory act is the new Law on Protection of
Competition (LPC), published in the Official Gazette 102/2008 Pursuant to Art. 22 LPC, a concentration arises where:
(latest amendments published in the Official State Gazette 54 from
two or more independent undertakings merge;
16 July 2010). The LPC contains the substantive and procedural
legal framework. The substantive legal provisions are fully one or more persons, already holding control over at least
harmonised with Regulation 139/2004. The proceedings before the one undertaking, or one or more undertakings directly or
indirectly acquire control over one or more undertakings or
CPC are also governed by the Administrative Procedure Code.
parts of them; or
Certain issues relevant for merger control have been expanded upon a full-function joint venture is established.
by the CPC in secondary legislation, such as the Organisational
Control means the possibility to exercise, as a result of rights,
Rules of the Commission for the Protection of Competition and the
contracts, or other elements, individually or taken together, thereby
Tariff of the Fees Charged by the Commission for the Protection of
also considering de facto and de jure circumstances, decisive
Competition under the LPC. Of further material importance are the
influence over an undertaking, especially through:
Methodology of Investigation and Definition of the Market Position
of Undertakings in the Relevant Market (the Methodology), the rights of ownership or of possession over the whole or part
Notification Form and the Guidelines for Submitting the of an undertakings assets of an undertaking; or
Notification Form (adopted 20 January 2009), as well as the rights or contracts which confer decisive influence on the
Methodology for Determination of the Pecuniary Sanctions and composition, voting or decision-making of the bodies of an
Fines under LPC. At the end of 2011, the CPC adopted Rules for undertaking.
the imposition of measures for the prevention of competition within As a rule, sole control is achieved by the acquisition of:
merger control. the majority of the share capital or assets of the target
undertaking;
1.3 Is there any other relevant legislation for foreign mergers? the majority of the voting shares of the target undertaking; or
the right to appoint more than half of the members of the
The LPC applies equally to foreign-to-foreign mergers which meet target undertakings decision-making bodies.
the turnover thresholds (see question 2.4 below). The turnover of Joint control generally arises where shareholders are granted equal
the undertakings concerned within the territory of Bulgaria is the voting rights or equal rights to nominate executive bodies or where

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shareholders are granted veto rights in relation to decisions on the 2.5 Does merger control apply in the absence of a
appointment of the management, the determination of the budget, substantive overlap?
adopting the business plan or future investments.
It should be noted that not only the acquisition of control, but also Yes, concentrations that meet the turnover thresholds set out in
the change in quality of control (from joint control to sole control question 2.4 require notification to the CPC irrespective of their
and vice versa) is deemed a concentration. impact on competition.
Bulgaria

2.2 Can the acquisition of a minority shareholding amount to 2.6 In what circumstances is it likely that transactions
a merger? between parties outside Bulgaria (foreign-to-foreign
transactions) would be caught by your merger control
legislation?
Yes, there are constellations where control can also be exercised by
minority shareholders on a de jure or a de facto basis: de jure control
All foreign-to-foreign transactions that meet the cumulative
may be conferred upon a minority shareholder who is granted
turnover thresholds (see question 2.4) must be notified to the CPC.
preferential shares on the basis of which the minority shareholder
It is not required that the turnover thresholds are achieved by a
holds the majority of voting rights or is vested the power to decide
Bulgarian subsidiary. Rather, it is sufficient for the establishment
on the commercial behaviour of the target undertaking. De facto
of jurisdiction of the CPC that the thresholds are met by indirect
control may be obtained by a minority shareholder if, for instance,
sales.
the remaining voting rights are widely spread.

2.7 Please describe any mechanisms whereby the operation


2.3 Are joint ventures subject to merger control?
of the jurisdictional thresholds may be overridden by other
provisions.
Yes, joint-ventures are subject to merger control, provided they
purport to carry out a commercial activity on a lasting basis and Except for the one-stop-shop principle pursuant to the EC Merger
function as an autonomous economic entity. LPC does not Regulation, i.e. that all concentrations having a Community
differentiate explicitly between coordinative and concentrative Dimension fall within the sole jurisdiction of the European
joint-ventures but respects the principles laid down in the EC Commission, there are no further provisions whereby the authority
merger legislation. of the CPC may be overridden.

2.4 What are the jurisdictional thresholds for application of 2.8 Where a merger takes place in stages, what principles
merger control? are applied in order to identify whether the various stages
constitute a single transaction or a series of transactions?
Pursuant to Article 24 LPC a concentration must be notified to the
CPC if the following thresholds are met: If several transactions (or the same transaction implemented in
the combined Bulgarian turnover of the undertakings several stages) take place among the same undertakings within a
concerned in the previous financial year must exceed BGN period of less than two years which, taken together, fulfil the
25 million (approximately EUR 12.8 million); and turnover thresholds mentioned at question 2.4, such transactions are
at least two of the undertakings concerned or the target assessed as a single concentration subject to notification as of the
undertaking alone must have a turnover in Bulgaria in the date of the latest transaction. The current wording does not
previous financial year, which exceeds BGN 3 million expressly cover staggered transactions performed by different
(approximately EUR 1.5 million). undertakings part of the same group. Please also see question 2.4
Turnover above.
The concept of turnover refers to net revenues of the undertakings
concerned, i.e. revenues from sales of products, goods and services
3 Notification and its Impact on the Transaction
after deduction of (i) allowances, (ii) discounts, (iii) rebates, and
(iv) value added tax. Intergroup sales shall be disregarded.
Timetable
The turnover of an undertaking concerned comprises the total
turnover of the group it belongs to, i.e. its subsidiaries, mother 3.1 Where the jurisdictional thresholds are met, is notification
undertakings, its mother undertakings subsidiaries and any other compulsory and is there a deadline for notification?
undertakings jointly controlled by two or more companies
belonging to the group. As a general rule, if a group contains a Where the thresholds set forth in question 2.4 are met, notification
joint-venture, the joint-ventures turnover shall be allocated equally is compulsory. In general, the LPC does not stipulate a filing
to its mother undertakings after deduction of sales to mother deadline.
undertakings. Such a rule is explicitly provided only with respect
to situations where the mother undertakings controlling the joint- 3.2 Please describe any exceptions where, even though the
venture are also undertakings concerned to the economic jurisdictional thresholds are met, clearance is not
concentration. required.
If the concentration relates to the establishment of a joint venture,
the group turnover of the two mother undertakings must be taken Pursuant to section 23 LPC the following concentrations do not
into account. require merger control clearance:
Special rules for the calculation of turnover apply to banks, credit Credit institutions or other financial institutions or insurance
companies that hold on a temporary basis securities of a
institutions, financial entities and insurance companies which are
given undertaking with a view of reselling them, provided
similar to those established by the EC merger control rules. that they:

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(i) do not exercise the corresponding voting rights in has to start reviewing the filing to assess whether it is complete.
order to influence the competitive conduct of the There is no statutory deadline for the CPC to declare a notification
target undertaking; or complete. If the CPC deems the filing incomplete, it will request
(ii) exercise the voting rights only in order to prepare the further documents from the parties. If the latter do not provide CPC
disposal of the securities, which should be done within with the requested documents within seven days, the CPC ceases
one year from their acquisition. the procedure.

Bulgaria
The acquisition and exercise of control by a trustee or a Once the notification is deemed complete the CPC has 25 working
liquidator a person who, according to the legislation in force, days to assess the concentration. This time period may be
performs certain functions related to the winding-up of the
prolonged by up to 20 working days in case the parties want to alter
undertaking or the declaration of the insolvency thereof.
the notified transaction.
The acquisition and exercise of control by a financial holding
company with the sole purpose of maintaining the full value The 25 working-day period always stops running when the parties
of the investment in the company. have to provide additional documents.
Finally, no notification is required in case of group internal Should the CPC still have competition concerns at the end of Phase
restructurings and reorganisation measures. I, it may open Phase II proceedings. Phase II proceedings may take
up to four months and may be prolonged by 25 working days due to
factual or legal complexity of the transaction.
3.3 Where a merger technically requires notification and
clearance, what are the risks of not filing? Are there any In Phase II the parties may propose remedies. If they do, Phase II
formal sanctions? may be prolonged by 15 working days irrespective of whether the
Phase II has been already prolonged with 25 working days or not.
Administrative fines This prolongation starts as of the day on which CPC receives the
complete information concerning the remedies.
Undertakings which violate the prohibition to implement a
transaction prior to obtaining clearance are subject to administrative
fines up to 10% of the worldwide group turnover in the preceding 3.7 Is there any prohibition on completing the transaction
business year. Other criteria to be taken into account by the CPC before clearance is received or any compulsory waiting
when setting the fine are, inter alia: the gravity of the infringement; period has ended? What are the risks in completing
the length of duration of the infringement; the relevant market; and before clearance is received?
cooperation with the CPC during the investigation, etc.
As set out in question 3.4 above, parties are prohibited from
Restoration measures
implementing the respective transaction before obtaining approval
The CPC is vested with the power to order appropriate measures to by the CPC with the exception for public bids and series of
restore the position of the undertakings on the market concerned transactions with securities traded on regulated markets of financial
prior the concentration, including orders for the divestment of instruments where different persons acquire control. For the risks
capitals, shares and assets brought together and/or for the of closing prior to clearance please refer to question 3.3.
termination of joint control.

3.8 Where notification is required, is there a prescribed


3.4 Is it possible to carve out local completion of a merger to format?
avoid delaying global completion?
The CPC published a notification form, which can be downloaded
In general, all actions that implement the transaction prior to under http://www.cpc.bg/Additional/ConcentrationTemplate.aspx.
obtaining clearance are prohibited. However, we deem it arguable
If any document is in a foreign language it has to be translated into
that agreements pursuant to which the Bulgarian business of the
Bulgarian and legalised. All copies shall be authenticated with
target undertaking is kept strictly separate from the remaining
True to the original statement and a signature of the
business until clearance is obtained are permissible.
representative of the notifying undertaking. Official documents
issued by non-Bulgarian authorities must be notarised and
3.5 At what stage in the transaction timetable can the superlegalised, where applicable.
notification be filed?
In order to avoid any delay in merger control proceedings, parties
should liaise with the CPC prior to submitting a notification in order
There are no legal deadlines for the notification of a concentration. A to ensure that the submission contains all necessary information.
merger may be notified upon (i) signing of an agreement, (ii)
announcement of a public bid, or (iii) acquisition of control, but before
the parties undertake any actions for implementation of the agreement. 3.9 Is there a short form or accelerated procedure for any
The parties may request the CPC to assess the concentration even at types of mergers? Are there any informal ways in which
the clearance timetable can be speeded up?
an earlier stage provided they can produce documents that manifest
their intention to implement the transaction under consideration (e.g.
by a memorandum of understanding, preliminary agreements, Other than clearance in Phase I, there is no accelerated procedure.
decisions of the managing bodies, etc.). The Bulgarian merger control rules do not provide for a short form
filing either. No other informal ways for speeding up the clearance
timetable are provided.
3.6 What is the timeframe for scrutiny of the merger by the
merger authority? What are the main stages in the
regulatory process? Can the timeframe be suspended by 3.10 Who is responsible for making the notification and are
the authority? there any filing fees?

Within 3 days following the registration of the notification, the CPC The notification has to be submitted:

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in case of acquisition of sole control by the party acquiring for providing a clearance, when the concentration under
sole control; consideration may lead to the creation or strengthening of a market
in case of acquisition of joint control, by the parties acquiring dominant position.
joint control; and
in case of mergers by the merging parties. 4.3 Are non-competition issues taken into account in
Prior to submission of the filing, a filing fee in the amount of BGN assessing the merger?
Bulgaria

2,000 (approx EUR 1,000) has to be paid.


Even if a transaction leads to the creation or strengthening of a
market dominant position (see question 4.1), the CPC may clear a
3.11 What impact, if any, do rules governing a public offer for a
listed business have on the merger control clearance
transaction provided that the transaction leads to:
process in such cases? general improvement of the existing market structure;
modernisation of an entire business sector;
Parties may request the CPC to assess the concentration before the promotion of the consumers interests; or
announcement of the public offer if they have announced publicly overall benefits for the economy as a result of the entry of
their intention to make a public offer. new investments.
Currently the LPC provides for an exemption of the prohibition of the
implementation of the concentration prior clearance by public bids
4.4 What is the scope for the involvement of third parties (or
and series of transactions with securities traded on regulated markets complainants) in the regulatory scrutiny process?
of financial instruments where different persons acquire control. In
order for the exemption to be applicable: (i) the parties have to notify
Upon registration of a new transaction, the CPC publishes the
the CPC without delay (see question 3.1); and (ii) the acquirer(s) must
transaction on its website and invites third parties to submit
not exercise the voting rights associated with the acquired shares
comments on the concentration to the CPC.
except for maintaining the full value of the investment.
All third parties (competitors and customers alike) whose interests
may be affected by the concentration may participate in the merger
3.12 Will the notification be published? control proceedings at the stage of in-depth inquiry. As parties to
the proceedings, they have access to the file (except for those
The notification will not be published. However, CPC publishes a documents and information containing business secrets), they may
short announcement for the notification on its website which attend hearings and have a right to be heard.
contains the names of the parties and markets concerned. Within
seven days of publishing the announcement, every third part which
4.5 What information gathering powers does the regulator
may be affected by the concentration may submit information or
enjoy in relation to the scrutiny of a merger?
statement to the CPC.

Beside the power to contact interested third parties, as well as other


4 Substantive Assessment of the Merger and state authorities, the CPC is entitled to request from the parties any
Outcome of the Process information and documentation that is considered necessary for the
assessment of the transaction. The member of the CPC responsible
for the case in cooperation with the case handlers may also request
4.1 What is the substantive test against which a merger will
a meeting with representatives of the undertakings concerned or any
be assessed?
other written explanation. If the CPC has to establish facts which
require special knowledge, the CPC may appoint one or more
The substantive test applied by the CPC in merger control
external experts to produce expert opinions. Moreover, the CPC
proceedings is whether a concentration leads to the creation or
may request information and assistance by other national
strengthening of a market dominant position that would
competition authorities in the Member States of the EU, as well as
significantly impede effective competition on the relevant market
from the European Commission. The CPC may conduct raids to
(SIEC).
find out facts only within the Phase II.
When assessing whether this is the case for the respective
Failure to provide complete and accurate information entails the
concentration, the CPC takes into account, inter alia, the following
risk of fines in the amount of up to 1% of the aggregate of the
criteria:
turnover of the undertaking for the last financial year. In addition,
the position of the involved undertakings on the market the CPC may also revoke a clearance decision that was based on
concerned; incorrect or incomplete information.
their economic and financial power;
access to supply and markets for the relevant goods and
4.6 During the regulatory process, what provision is there for
services;
the protection of commercially sensitive information?
the legal or other barriers to entry in the markets; and
the future development of the market as a result from the The notifying party shall submit to the CPC a non-confidential
respective transaction and the change in supply and demand version of the notification and all its enclosures which contain
conditions. business secrets as enclosures to the original notification, therein
deleting all information which is considered a business secret.
4.2 To what extent are efficiency considerations taken into When the whole document is a business secret, the parties have to
account? provide the CPC with a short description of this document. Copies
of documents which contain sensitive information shall be marked
Efficiency might be considered by the CPC as one of the grounds with a Business secret statement. A list of documents which have

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to be considered business secrets should be enclosed with the certain time period, to provide additional evidence and to propose
notification. remedies.
All decisions of the CPC are publicly available. However, the CPC When CPC receives the remedies which are proposed by the
only publishes non-confidential versions of its decisions. notifying party/ies, the CPC conducts a market test. Within the
latter, the CPC enquires from the relevant competitors, suppliers
and clients on their opinion on the effectiveness of the proposed
5 The End of the Process: Remedies, Appeals

Bulgaria
remedies.
and Enforcement
The CPC assesses the proposed remedies once the notifying
party/ies has/have provided all details about the remedies. The CPC
5.1 How does the regulatory process end? qualifies as admissible only those remedies which meet the criteria
set in the rules such as efficiency, objectivity, proportionality,
As mentioned in question 3.6 when the CPC finds the notification adequacy and sufficiency, concreteness, etc. If the proposed
to be complete, the CPC has 25 working days (which may be remedies do not meet the criteria set in the rules or if the market test
extended) to decide whether to: shows that they will not be efficient, the CPC may provide the
establish that the transaction is not a concentration (see undertakings concerned with an additional time period to propose
question 2.1 above); new remedies.
permit the concentration; The notifying party/ies and the third interested parties might be
permit the concentration with the amendments made by the heard by the CPC in an open hearing session, if they make such a
undertakings concerned; or request, before the issuance of the final decision. The CPC decides
launch an in-depth inquiry. on the remedies with its final decision.
In the latter case, the CPC has a further four-month period (which
again can be extended) to ultimately decide whether to (i) clear the 5.5 If a divestment remedy is required, does the merger
transaction unconditionally, (ii) clear it subject to conditions, or (iii) authority have a standard approach to the terms and
prohibit it. conditions to be applied to the divestment?
If a transaction is cleared, the parties have to pay a clearance fee in
According to the new remedies rules the divested business should
the amount of 0.1% of the aggregate turnover of the undertakings
be viable and capable to be run independently. If these criteria are
concerned. The fee is capped at BGN 60,000 (approx EUR
not fulfilled, at least the purchaser of the divested business should
30,000).
have such additional assets or should be capable to easily acquire
such assets so that he can start running the divested business
5.2 Where competition problems are identified, is it possible independently. The divested business should encompass all
to negotiate remedies which are acceptable to the necessary personnel, assets, consumables, etc. The business
parties? relations between divested business and the divesting party/ies
should continue on at arms length.
The CPC may impose measures directly related to the
Divesting party/ies may conclude a binding contract with the
implementation of the concentration which it deems necessary for the
potential purchaser of the divested business, but the completion of
preservation of the effective competition and for restriction of the
the transfer can be completed after the approval of the measure by
negative effects of the concentration on the relevant market(s). The
the CPC. However, if the purchase of the divested business consists
notifying party/ies may also propose such measures which have to be
of a concentration, the general rule should apply.
approved by the CPC. In the Rules for the imposition of measures for
the preservation of competition within merger control, the CPC
recommends the notifying party/ies to propose alone remedies. It is 5.6 Can the parties complete the merger before the remedies
the CPCs discretion to decide on the remedies to be imposed on the have been complied with?
parties or on approval of the remedies proposed by the parties.
In general, yes. However, constellations are an option where the
CPC links closing a subsidiary by the closing date.
5.3 To what extent have remedies been imposed in foreign-
to-foreign mergers?
5.7 How are any negotiated remedies enforced?
The CPC may impose remedies in foreign-to-foreign mergers if it
deems such measures necessary for the preservation of the effective The parties have to inform the CPC of the enforcement of the remedies
competition and for the restriction of the negative effects of the within one month after the expiration of the term which is provided by
concentration on the relevant market(s). the CPC for the enforcement of remedies but not later than one year
after the CPCs decision became effective. The procedure for
verification of the enforcement of remedies may take up to three
5.4 At what stage in the process can the negotiation of
remedies be commenced? Please describe any relevant months.
procedural steps and deadlines. Non-compliance with imposed remedies may entail fines of up to 10%
of the worldwide group turnover of the implicated undertakings in the
Remedies may be negotiated in Phase II proceedings only before preceding financial year. The CPC may also impose behavioural
the open hearing of the party/ies at the CPC. Within the Phase II and/or structural measures to restore effective competition including
proceedings, the CPC collects further evidence and makes demerger of capitals and/or ceasing the joint control.
preliminary conclusions about the effect of the transaction on Failure to comply with remedies imposed may also entail periodic
competition. The parties have the right to be informed about the payments of up to 5% of the average daily turnover in the previous
CPCs preliminary conclusions, to comment on them within a financial year.

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5.8 Will a clearance decision cover ancillary restrictions? 6 Miscellaneous

Parties are advised to disclose information on ancillary restraints in


6.1 To what extent does the merger authority in Bulgaria
the notification. The CPC will assess the ancillary restraints during
liaise with those in other jurisdictions?
the review period and the clearance decision will also cover them.
Bulgaria

Following Bulgarias accession to the European Union, the CPC


5.9 Can a decision on merger clearance be appealed? has become a member of the European Competition Network
(ECN).
A decision by the CPC may be appealed before the Supreme The CPC provides assistance to and exchanges information with the
Administrative Court (i) by the parties after the decision has been European Commission and the other national competition
announced to the parties in the assessment procedure, or (ii) by authorities in the EU Member States pursuant to Article 11,
every interested third party after the decision has been announced in paragraph (6), Article 12 and Article 13, paragraph (5) of
the electronic register on the CPC webpage. Regulation (EC) No. 139/2004. The CPC may also request
information or assistance from other national competition
5.10 What is the time limit for any appeal? authorities as well as from the European Commission.
The CPC has also been a member of the International Competition
A decision by the CPC may be appealed before the Supreme Network (ICN) since 2003.
Administrative Court within 14 days as of: (i) the day when the
parties were informed about the decision; or (ii) the day when the
6.2 Are there any proposals for reform of the merger control
decision was announced for every interested party.
regime in Bulgaria?

5.11 Is there a time limit for enforcement of merger control There are no proposals for reform of the merger control regime.
legislation?

6.3 Please identify the date as at which your answers are up


The statutory prescription period for failure to notify a merger or for
to date.
implementation thereof is five years.
These answers are up to date as of September 2012.

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Ilko Stoyanov Mariya Papazova


Advokatsko druzhestvo Andreev, Stoyanov Advokatsko druzhestvo Andreev, Stoyanov
& Tsekova in cooperation with Schoenherr & Tsekova in cooperation with Schoenherr
56 Alabin 56 Alabin
BG-1000 Sofia BG-1000 Sofia
Bulgaria Bulgaria

Bulgaria
Tel: +359 2 933 1070 Tel: +359 2 933 1087
Fax: +359 2 986 1105 Fax: +359 2 986 1105
Email: i.stoyanov@schoenherr.bg Email: m.papazova@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu
Ilko Stoyanov has been a partner with Advokatso druzhestvo Mariya Papazova has been an attorney at law at Advokatsko
Andreev, Stoyanov & Tsekova in cooperation with Schoenherr druzhestvo Andreev, Stoyanov & Tsekova in cooperation with
since 2007 where he specialises in Corporate/M&A, Competition Schoenherr since 2007. Her main area of specialisation is EU and
Law and Banking & Finance. Ilko regularly acts for clients on competition law. Her further areas of specialisation are unfair
multinational acquisitions and corporate restructurings in the competition and consumer protection law. Before joining the firm,
telecom, technology, insurance, manufacturing and energy she worked in the Bulgarian Commission for Protection of
industries (such as Austrian Broadcasting Services (ORS), Competition for four years. During her work in the Commission she
Siemens, Uniqa, Generali, Advent (as investor in KAI Group) and did a four-month traineeship at the European Commission, DG
Edison). Further, he advises clients on matters of antitrust Competition under the supervision of the Consumer Liason Officer.
(including investigations) and merger control, and regularly Since Mariya joined Schoenherr Sofia in 2007, she advised
instructs companies on competition compliance. Ilko has international firms from different economic sectors in merger control
graduated in law from the Sofia University and has LL.M. degree proceedures in front of the Bulgarian Commission for Protection of
from Columbia University Law School where he was also an editor Competition (Uniqa, Strabag, Procter & Gamble, DUROPACK AG,
of the Columbia Journal of East European Law. He is a member of etc.), as well as on a number of antitrust matters including the cartel
the Dobrich bar since 2004. Ilko is speaker on conferences investigation in the consumer cyclicals and gas retail industry (OMV
regarding competition law and foreign investments. He is author of Bulgaria OOD). Mariya frequently advises clients from the food/non-
publications and manuals in the fields of mergers and acquisitions, food retail industries in unfair competition and consumer protection
merger control and competition law enforcement, as well as joint law matters (Rauch Bulgaria, Lidl Bulgaria, OMV Bulgaria). Mariya
contributor to annual reports on insolvency law for the International holds degrees from the Sofia University St. Kliment Ohridsky
Swaps and Derivatives Association. (Master of Law) and University of Friedrich-Alexander Universitaet
Erlangen-Nuernberg-Germany (LL.M.). She has been admitted to
the Sofia Bar Association since 2007. The working languages of
Mariya are English, German and Bulgarian.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend
of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be
one of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means
that we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 14

Croatia

Schoenherr Christoph Haid

1 Relevant Authorities and Legislation of Joint Stock Companies (Official Gazette nos. 109/07, 36/09 and
108/12), the Labour Act (Official Gazette nos. 149/09, 61/11 and
82/12), the Civil Obligations Act (Official Gazette nos. 35/05 and
1.1 Who is/are the relevant merger authority(ies)?
41/08) and the Electronic Communications Act (Official Gazette
nos. 73/08, 90/11 and 125/11). Pursuant to Article 74 of the CCA,
In the Republic of Croatia, the general relevant merger authority is
if legal gaps in the area regulated within the reach of the CCA arise,
the Croatian Competition Agency (hereinafter the Agency). It
competition law provisions of the EU apply.
was established in 1997 and is responsible for assessing restrictive
practices, abuses of market dominance and compatibility of
concentrations with competition rules. At the same time, there are 1.3 Is there any other relevant legislation for foreign mergers?
additional authorities who play an important role for mergers in the
following specific sectors: Croatian law does not discriminate between foreign and domestic
the Croatian Financial Service Supervisory Agency investors. Still, some specifics do exist, i.e. all direct foreign
(hereinafter the CFSSA), supervising acquisitions in the investments should be reported to the Croatian National Bank
following fields: investment funds, leasing and investment within 30 days upon the completion of the transaction. This
companies; requirement is for statistical purposes only, which means that there
the Croatian Post and Electronic Communications is no clearance/approval requirement.
Agency, supervising mergers on the telecommunication
market;
1.4 Is there any other relevant legislation for mergers in
the Electronic Media Agency, supervising mergers in the particular sectors?
area of electronic media; and
the Croatian National Bank, supervising mergers of banks. Certain sectors which are considered as being risky are regulated
separately. The relevant provisions are laid down in the:
1.2 What is the merger legislation? Credit Institutions Act (Official Gazette nos. 117/08, 74/09,
153/09 and 108/12);
Pursuant to Article 70 (2) of the Stabilisation and Association Media Act (Official Gazette nos. 59/04 and 84/11);
Agreement between the Republic of Croatia and the European Electronic Media Act (Official Gazette nos. 153/09 and
Union (hereinafter EU) and its Member States, competition law 84/11); and
provisions of the EU are to be regarded as the basis for the Electronic Communication Act (Official Gazette nos.
interpretation and application of the Croatian competition law 73/08 and 90/11).
legislation. This creates a legal framework for the developments in
Croatia in this field. Already since 1995 the Republic of Croatia is
developing its legislation, concerning competition law in general 2 Transactions Caught by Merger Control
and mergers in particular. Entering into force as of 1 October 2010, Legislation
the Croatian Competition Act (Official Gazette no. 79/2009)
(hereinafter CCA) became the main merger control legislation in 2.1 Which types of transaction are caught in particular, how
the Republic of Croatia. Pursuant to its substantive and procedural is the concept of control defined?
provisions, it is introducing far-reaching changes to the Croatian
competition law landscape, broadening the scope of the Agencys Pursuant to Article 15 paras 1 and 3 of the CCA, the following types
authority. Proceedings before the Agency are regulated pursuant to of transactions are caught:
the General Administrative Proceedings Act (Official Gazette no. mergers or acquisitions of undertakings;
47/09). For proceedings before the Administrative Court against
the acquisition of control over one or more undertakings or a
decisions issued by the Agency, the Administrative Dispute Act
(Official Gazette no. 20/10) applies. At the same time various (substantial) part of an undertaking; and
legislation exists, which include provisions applicable to mergers, the establishment of a full-functional joint venture, i.e. a joint
i.e. the Companies Act (Official Gazette nos. 111/93, 34/99, 52/00, venture that will perform on a lasting basis all functions of an
118/03, 107/07, 137/09, 152/11 and 111/12), the Capital Market Act independent economic entity.
(Official Gazette nos. 88/08, 46/08 and 74/09), the Act on Takeover Article 15 para 2 CCA provides a definition of the concept of

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control: An undertaking is deemed to control another undertaking require clearance from the Croatian National Bank, and all media
if it, directly or indirectly, holds more than half of its shares, may mergers have to be notified to the Agency, irrespective of the
exercise more than half of the voting rights, has the right to appoint turnover thresholds (pursuant to Article 36 Media Act), as well as
more than half of the members of the management board, any change in the shareholder structure of a Croatian electronic
supervisory board or similar managing or supervising bodies, or in media (TV, radio broadcaster, provider of a media service, etc.),
any other way is able to exercise decisive influence on the business irrespective of whether it leads to a change in control and/or
of the controlled undertaking. whether the turnover thresholds are met. Furthermore,

Croatia
telecommunication operators with significant market power and
operators who have been granted licences to use radio frequencies
2.2 Can the acquisition of a minority shareholding amount to
a merger?
at the level of the Republic of Croatia must notify Croatian Post and
Electronic Communications Agency in writing of intention to
merge with, or acquire, other telecommunication operator on the
Minority shareholding can be caught under merger control rules, in
market, regardless of the requirements prescribed by the CCA.
case such a stake entails one of the above-described situations,
meaning, the acquisition of a minority shareholding requires merger
control approval in case the transaction confers on the acquirer de 2.8 Where a merger takes place in stages, what principles
jure or de facto control over the target undertaking. are applied in order to identify whether the various stages
constitute a single transaction or a series of transactions?

2.3 Are joint ventures subject to merger control?


Under the CCA, special provisions exist for mergers which take
place in stages. Two or more transactions that are taking place
The creation of a joint venture is subject to merger control if the
between the same parties within a period of two years will be
joint venture will be performing functions of an independent
considered one single concentration that is realised on the day of the
economic unit on a lasting basis.
last transaction pursuant to Article 17 para 5 CCA.

2.4 What are the jurisdictional thresholds for application of


merger control? 3 Notification and its Impact on the Transaction
Timetable
A concentration has to be notified to the Agency if (i) at least one
of the parties to the concentration has its seat and/or branch office 3.1 Where the jurisdictional thresholds are met, is notification
in the Republic of Croatia, and (ii) the following turnover compulsory and is there a deadline for notification?
thresholds are met:
the combined worldwide turnover of all undertakings Where the jurisdictional thresholds are met notification is
concerned is at least HRK 1 billion (about EUR 133 million) compulsory. The CCA does not provide for a filing deadline. In
in the financial year preceding the concentration; and principle, a notification can be submitted, as soon as the contract
the aggregate national turnover in Croatia of each of at least between the undertakings has been signed, or after the public offer
two undertakings concerned is at least HKR 100 million has been made (Article 19 para 3 CCA). The CCA provides for the
(about EUR 13.3 million) in the preceding financial year. possibility to file the notification even before signing the contract,
as long as an intention of good-faith to enter into the transaction
2.5 Does merger control apply in the absence of a agreement can be demonstrated.
substantive overlap?
3.2 Please describe any exceptions where, even though the
There is no direct relation between the merger control filing jurisdictional thresholds are met, clearance is not
threshold and the substantive overlap. Upon receipt of a complete required.
merger notification, the Agency decides whether a filing obligation
exists, or if the notification shall be dismissed. If the turnover In cases where the jurisdictional thresholds are met, clearance for
thresholds are met, a filing obligation exists irrespective of whether some case constellations is not required. These situations are as
a transaction concerns horizontal overlaps or vertical links between follows:
the parties. group internal restructurings;
banks, investment funds or insurance companies and other
2.6 In what circumstances is it likely that transactions financial institutions that in their ordinary course of
between parties outside Croatia (foreign-to-foreign business (which includes transactions and dealing with
transactions) would be caught by your merger control securities) hold shares on a temporary basis for their own
legislation? account or for the account of third parties, with a view to
reselling them, provided that they do not exercise their
Foreign-to-foreign transactions are caught by the CCA if the voting rights in respect of those shares for the purpose of
determining the competitive behaviour of that undertaking,
requirements set out in question 2.4 are met.
but solely with a view to prepare the divestment of all, or part
of the undertaking or its shares, and provided that they do not
2.7 Please describe any mechanisms whereby the operation undertake any operation which may distort, restrict or
of the jurisdictional thresholds may be overridden by other prevent competition and carry out the divestment within one
provisions. year following the acquisition. Even though no formal
merger control filing has to be made, the parties to the
concentration have to inform the Agency of such an
This depends on the nature of the operation, and is subject to special
exempted transaction; and
merger control provisions. Pursuant to Article 71 para 5 of the
the acquisition of control in the course of proceedings
Credit Institutions Act, all concentrations in the banking sector

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relating to bankruptcy, liquidation or winding up by an submit their arguments and to conduct an oral hearing before the
office-holder or administration officer according to the final decision will be made.
national Bankruptcy Act and the Companies Act.

3.7 Is there any prohibition on completing the transaction


3.3 Where a merger technically requires notification and before clearance is received or any compulsory waiting
clearance, what are the risks of not filing? Are there any period has ended? What are the risks in completing
Croatia

formal sanctions? before clearance is received?

Closing a notifiable transaction before clearance is prohibited and Pursuant to Article 19 paras 5 and 6 CCA, completion of the
may entail fines of up to 10% of the worldwide turnover of the transaction prior to the obtainment of the formal clearance is
implicated undertakings. From the ban on closing it follows that prohibited. In case of breaching the suspension obligation, the
corporate and legal actions taken in violation of the suspension undertaking shall be fined up to 10% of the total annual turnover in
obligation are to be considered null and void. the financial year preceding the year when the infringement was
committed.
3.4 Is it possible to carve out local completion of a merger to
avoid delaying global completion? 3.8 Where notification is required, is there a prescribed format?

Under Croatian merger control rules, the (even partial) The Regulation on notification and assessment of concentration
implementation of a transaction is prohibited prior to obtaining (Official Gazette no. 38/11) (hereinafter the Regulation) provides
formal clearance (Article 19 paras 5 and 6 CCA). It therefore might for two distinct forms of merger control notifications, which closely
be difficult to justify local carve-outs before the Agency. At the follow the Short Form CO and Form CO at EU level.
same time, the CCA should only apply to facts that potentially
The notification should be accompanied by:
impact competition in Croatia. This general principle provides for
arguments that local carve-outs should be possible. Ultimately, the the original or a certified copy, or a certified translation (if
the original official text is not written in Croatian) of the
Agency has never commented officially on carve-outs so that
document representing the legal grounds for the
parties should consider carefully whether they want to go ahead concentration. An apostille is required if there is no bilateral
with closing before clearance in Croatia and carve-out the Croatian agreement on the recognition of foreign certifications;
angle of the transaction. annual financial reports for the parties to the concentration
Pursuant to Article 19 para 6, the Agency can allow the for the financial year preceding the concentration (if not in
implementation of certain actions before the clearance. Such Croatian, accompanied by a certified translation); and
derogation from the suspension clause requires a request by the other information and documents required by the Regulation:
undertakings involved and a consequent approval by the Agency, copies of all analyses, reports, studies, surveys, and any
which it will only grant after reviewing the facts at stake. comparable documents prepared by or for any member(s) of
the board of directors, or the supervisory board, or the other
person(s) exercising similar functions (or to whom such
3.5 At what stage in the transaction timetable can the functions have been delegated or entrusted), or the
notification be filed? shareholders meeting, for the purpose of assessing or
analysing the concentration with respect to market shares,
As mentioned in question 3.1, the CCA does not provide for a competitive conditions, competitors (actual and potential), the
specific filing deadline. The filing can be submitted as soon as the rationale of the concentration, potential for sales growth or
agreement between the undertakings is signed or after the public expansion into other product or geographic markets, and/or
general market conditions. Also, in the case of media mergers,
offer has been made. The notification can be submitted even before
an additional document will be required a decision of the
signing or publishing the bid, if the parties can prove a bona fide Electronic Media Agency stating that by implementing the
intention to enter into the transaction agreement. notified concentration no illegal concentration within the sense
of the Electronic Media Act will arise.
3.6 What is the timeframe for scrutiny of the merger by the In addition to the obligatory information and documents set out under
merger authority? What are the main stages in the the Regulation, the Agency may require additional information and
regulatory process? Can the timeframe be suspended by documents, also beyond the list provided for in the Regulation.
the authority?

The regulatory process is divided into two phases (Phase I, Phase II). 3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which
Phase I starts from the day the Agency receives a complete filing and
the clearance timetable can be speeded up?
has to be completed within 30 days. After these 30 days, the Agency
can adopt a decision granting clearance or a decision to initiate Phase
There is a short form for the notification, which permits an accelerated
II. The concentration is deemed cleared if the Agency does not issue
procedure before the Agency. The CCA sets out 4 constellations under
a decision within 30 days following the initiation of Phase I.
which a short form filing can be submitted, as in the respective
Phase II may take 3 months, with the possibility of an extension by constellations it is very likely that the transaction will not have a
another 3 months. Phase II ends by the Agency adopting a written negative effect on competition in the relevant market.
decision, either permitting (possibly without conditioning or with
On the other hand, the Agency did not publish information on any
conditioning) or prohibiting the merger.
informal way which would speed up the clearance timetable or
The CCA also provides that the Agency, after opening Phase II, is prioritise merger cases. However, parties to a transaction may enter
obliged to publish a Notification on Facts determined in the into pre-notification talks with the CCA which could secure a clear
proceedings, allowing all parties to the concentration (and all other framework for possible bordering factual or legal issues.
parties holding a legal interest in the result of the procedure) to

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3.10 Who is responsible for making the notification and are 4.3 Are non-competition issues taken into account in
there any filing fees? assessing the merger?

Responsibility for filing rests with the acquirer(s) in case of the Media diversity is a criterion which underlies the provisions of the
acquisition of control. In all other cases, the obligation to notify Media Act and the Electronic Media Act related to concentration in
rests with all undertakings concerned, separately. specified sectors. However, general competition rules do not
address this question.

Croatia
The filing fee may amount to up to HRK 10,000 (approx. EUR
1,400) or up to HRK 5,000 (approx. EUR 700) for filings submitted
under sector-specific laws. 4.4 What is the scope for the involvement of third parties (or
For filings approved in Phase I, the Agency may charge a fee of up complainants) in the regulatory scrutiny process?
to HRK 10,000 (approx. EUR 1,400) or a fee of up to HRK 5,000
(approx. EUR 700) for filings approved under sector-specific laws. Third parties are entitled to participate in the regulatory scrutiny
For filings approved in Phase II, the Agency may charge a fee of up process on condition they are able to prove a legal interest in the
to HRK 150,000 (approx. EUR 20,500) or HRK 15,000 (approx. outcome of the process. In Phase II of the regulatory procedure, the
EUR 2,000) for filings approved under sector-specific laws. Agency, after receipt of the complete notification, publishes a
public request to all interested parties to submit their comments on
the notified concentration within 8 to 15 days.
3.11 What impact, if any, do rules governing a public offer for a
listed business have on the merger control clearance
process in such cases? 4.5 What information gathering powers does the regulator
enjoy in relation to the scrutiny of a merger?
The Agency will dismiss prior notification of concentration or suspend
the procedure, if it has already started, if there are no legal The parties to the concentration are obliged to submit to the Agency
requirements for initiating the procedure or its continuation, such as a the documentation they consider to be relevant. The Agency may
valid legal ground of a concentration. Therefore, rules which govern request from undertakings concerned, as well as other third parties,
a public offer are of relevance throughout the clearance process. all the information which it deems necessary. In addition, the
Agency will also hold an oral hearing in order to enable the
undertakings concerned to provide new facts or commitment
3.12 Will the notification be published?
proposals aimed at removing negative effects of the concentration.
The notification will not be published, but information that the
notification has been submitted will be revealed. Following the 4.6 During the regulatory process, what provision is there for
receipt of a complete notification of concentration, the Agency shall the protection of commercially sensitive information?
publish a request for information on its webpage, aimed at all
interested parties who may respond to this request in writing. Also, The notifying party is obliged to clearly mark any data in the filing
summary decisions assessing the compatibility of concentrations that may be considered confidential. The same applies to
and imposed measures will be published in the Official Gazette and accompanying and other documents and evidence submitted by the
on the webpage of the Agency. notifying party or other undertakings.
A list of different general categories of data, and information that
4 Substantive Assessment of the Merger and will be considered a business secret, is included in Article 53 CCA.
According to this Article, the members of the Agency are obliged to
Outcome of the Process
keep all information and documents classified and, as such,
confidential.
4.1 What is the substantive test against which a merger will
be assessed?
5 The End of the Process: Remedies, Appeals
The substantive test applied by the Agency is whether the and Enforcement
transaction results in a significant impediment of effective
competition. The Agency takes into consideration possible pro-
5.1 How does the regulatory process end?
and anti-competitive effects caused by the concentration, it
appraises the structure of the relevant market, the market share, the
The concentration is deemed cleared if the Agency does not issue a
position of the undertakings concerned and their competitors, and
decision and publishes it on its webpage within 30 days following
the effects of the concentration on other undertakings, etc. The
the initiation of Phase I. In this Phase, the Agency may also issue
Agency takes into account in particular the impact of the transaction
an express clearance decision. In Phase II, the Agency may, by
on consumer welfare and assesses whether the concentration will
decision, approve the transaction conditionally or unconditionally,
contribute to a decrease in prices of goods and/or services, an
improvement in the distribution of goods, etc. or prohibit the concentration.

5.2 Where competition problems are identified, is it possible


4.2 To what extent are efficiency considerations taken into
to negotiate remedies which are acceptable to the
account?
parties?

Regulation on notification and assessment of concentrations in


If the Agency considers that the concentration in question may be
Article 9 makes it possible for the undertakings to submit data on
declared compatible only subject to remedies, it shall without delay
the overall market context and possible efficiencies. The Agency
inform the notifying party or parties thereof. The notifying party is
will take into account efficiency considerations, if consumer benefit
will be shown as a final result of a merger. then obliged to submit the proposal of possible commitments

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(whether behavioural or structural remedies) to the Agency in order respective practice at EU level. Hence, restrictions on the parties,
to alleviate the competition concerns identified by the Agency. The in line with the EU Commission notice on ancillary restraints,
time limit for submitting the remedy proposal shall be set by the should be permissible in Croatia.
Agency and shall not exceed 30 days. Though negotiating remedies
is not explicitly foreseen, there is certainly the possibility to interact
5.9 Can a decision on merger clearance be appealed?
with the Agency over the expected content of a remedy.
Croatia

There is no right to appeal against decisions issued by the Agency,


5.3 To what extent have remedies been imposed in foreign- but according to the Administrative Dispute Act (ADA), the parties
to-foreign mergers? involved in the procedure have the right to initiate an administrative
procedure within 30 days of receipt of the decision.
The Agency has never imposed remedies in foreign-to-foreign
merger cases. It needs to be emphasised that foreign-to-foreign
5.10 What is the time limit for any appeal?
mergers are only caught by the CCA if requirements set out in the
answer to question 2.4 are met.
Against the decisions of the Agency which establish the
infringements of the CCA no appeal is allowed, but the injured
5.4 At what stage in the process can the negotiation of party may bring a claim before the Administrative Court within 30
remedies be commenced? Please describe any relevant days of receipt of the decision. The same applies to procedural
procedural steps and deadlines. orders issued by the Agency, unless otherwise prescribed by the
CCA.
Parties can propose remedies at any stage in the merger control
proceedings, even together with the notification. If the parties do
not propose remedies pro-actively and competition concerns arise, 5.11 Is there a time limit for enforcement of merger control
the Agency will set a time limit for the parties to come up with legislation?
remedy suggestions (see question 5.2 above).
According to Article 71 CCA, the limitation period is five years
If the Agency accepts these proposed remedies, it shall publish its
from the last day of the infringement. This period is interrupted by
decision on its website, inviting all interested parties to submit their
every action taken by the Agency; nevertheless, there is also an
objections. Such objections should be submitted within 20 days of
absolute time limit of 10 years after the infringement.
the publishing of the decision on the website.

5.5 If a divestment remedy is required, does the merger


6 Miscellaneous
authority have a standard approach to the terms and
conditions to be applied to the divestment? 6.1 To what extent does the merger authority in Croatia liaise
with those in other jurisdictions?
The divestment of one or more business activities performed by the
parties to the concentration is a structural remedy. The Agency The Agency cooperates with international competition authorities
prescribes short deadlines for its execution. Additional terms and as well as with international organisations and institutions, in
conditions can be introduced, but this is dealt with on a case-by- particular with the Commission of the EU. At the same time, it is
case basis. concluding cooperation agreements with several national
authorities of EU Member States and neighbouring non-EU
5.6 Can the parties complete the merger before the remedies countries. These cooperation agreements have as their essential aim
have been complied with? the deepening of cooperation between the different authorities.

According to the CCA, the parties are permitted to proceed with the 6.2 Are there any proposals for reform of the merger control
implementation of the concentration from the day of the obtainment regime in Croatia?
of the decision from the Agency, declaring the proposed transaction
permitted, but subject to conditionality. In May 2012, the Agency decided to file an initiative to the Ministry
of Economy, as the legislative holder, in order to provoke the
5.7 How are any negotiated remedies enforced? amendment of the CCA. The said decision has been publicly
reasoned as a need of the Agency to obtain broader regulatory
First and foremost, not complying with remedies can entail fines of powers with the date of the EU accession. The influence of possible
up to 10% of the total turnover of the undertakings concerned for amendments on the merger control regime is unknown, but it is not
the preceding financial year. In addition, depending on the nature expected to be substantial. Furthermore, the Agency will take over
of the remedy, it might be necessary to obtain prior approval by the authority regarding concentrations in the banking and financial
Agency for certain steps (e.g. if closing of the notified transaction sector from the date of accession to the EU.
is subject to divesting a certain business to a suitable third party up-
front). Thereby, the Agency safeguards adherence to any negotiated 6.3 Please identify the date as at which your answers are up
remedies. to date.

September 2012.
5.8 Will a clearance decision cover ancillary restrictions?

The Croatian merger control regime does not provide for special
rules on ancillary restraints. However, the Agency follows the

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Christoph Haid
Schoenherr
Tuchlauben 17
A-1010 Vienna
Austria

Tel: +43 1 534 37 119

Croatia
Fax: +43 1 534 37 6119
Email: c.haid@schoenherr.eu
URL: www.schoenherr.eu

Christoph Haid is a partner at Schoenherr in Vienna, who joined


the EU & Competition team in January 2004. He has since then
been involved in numerous high-profile merger control
proceedings before the Austrian competition authorities and the
European Commission and coordinated global merger control
filings, particularly in CEE, where his focal point of work is. In
addition, he also advises clients on all aspects of antitrust law,
including infringement proceedings before the European courts
with respect to alleged anticompetitive practices. Christoph is
frequently involved in supporting clients to implement
comprehensive anti-trust compliance programmes.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend
of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be
one of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means
that we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 16

Czech Republic Martin Nedelka

Schoenherr Radovan Kub

1 Relevant Authorities and Legislation 2 Transactions Caught by Merger Control


Legislation
1.1 Who is/are the relevant merger authority(ies)?
2.1 Which types of transaction are caught in particular, how
The authority responsible for applying merger control legislation is is the concept of control defined?
the Office for the Protection of Competition (ad pro ochranu
hospodsk soute) (the Office). Please see www.compet.cz. The Act applies to the following types of transactions:
merger (consolidation) of two or more previously
1.2 What is the merger legislation?
independent undertakings;
transactions where an undertaking acquires an enterprise of
Since the Czech Republic is a Member State of the European another undertaking or a part thereof on the basis of an
agreement, in a public auction or in another manner;
Union, all concentrations are potentially subject to the EC Merger
Regulation where the relevant financial thresholds are met. If the transactions where one or more persons already controlling
EC Merger Regulation does not apply, the Czech merger regime at least one undertaking, or one or more undertakings
directly or indirectly acquire control over another
may be applicable, i.e. the Act on the Protection of Competition
undertaking (target undertaking) either by acquisition of
(Act No. 143/2001; the Act), particularly section IV. An shares or ownership interest or by an agreement or by any
unofficial English translation of the Act is available at the Offices other means, which enables the acquiring undertaking(s) to
website. control the acquired undertaking; and
Decree No. 252/2009 implementing the Act provides for a merger the creation of joint control by more undertakings over
notification form and lists other documents necessary for filing a another undertaking, which performs, on a lasting basis, all
concentration. the functions of an autonomous economic entity.
The Office has also published several notices, i.e.: (i) the Notice on The Act defines control as the possibility to exercise decisive
the calculation of turnover; (ii) the Notice on pre-notification influence over another undertaking, in particular by:
contacts; (iii) the Notice on the concept of merger control; (iv) the ownership or the right to use an enterprise of the controlled
Notice on the concept of undertakings; (v) the Notice on undertaking or a part thereof; or
implementation of a concentration prior to the approval of the rights or other legal facts which confer decisive influence on
Office; (vi) the Notice on the application of the failing firm defence the composition, voting or decisions of the organs of the
concept in the assessment of concentration of undertakings; and controlled undertaking.
(vii) the Notice on simplified procedure. The Act does not stipulate a fixed shareholding threshold, the
meeting of which would constitute a control. The Office always
1.3 Is there any other relevant legislation for foreign assesses the actual situation.
mergers? Not only the acquisition of control, but also the change in the
quality of control (from joint control to sole control and vice versa)
There is no other relevant legislation for foreign mergers. is deemed a concentration within the meaning of the Act.

1.4 Is there any other relevant legislation for mergers in 2.2 Can the acquisition of a minority shareholding amount to
particular sectors? a merger?

The merger control regime applies across all industry sectors. For There is no explicit regulation of this question in the Act. Based on
certain sectors, however, specific approvals are necessary. This is the case law of the Office, the acquisition of a minority
particularly true for the financial sector, where the approval of the shareholding can also amount to a concentration. The condition is
Czech National Bank may be required. that by the acquisition of a minority shareholding, a decisive
influence over the applied undertaking can be exercised either on a
de jure or a de facto basis. De jure decisive influence may be

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conferred upon a minority shareholder who is granted preferential For banks, the net turnover is understood as the sum of the incomes,
shares on the basis of which the minority shareholder holds the particularly interest incomes, incomes from securities, incomes
majority of voting rights or is vested the power to decide on the from participating interests, commissions receivables and incomes
commercial behaviour of the target undertaking. De facto decisive from financial operations. For insurance undertakings, the net

Czech Republic
influence may be obtained by a minority shareholder if the turnover should be understood as the total sum of premiums written
remaining voting rights are widely spread. A minority shareholder resulting from all concluded insurance contracts.
may also exercise de facto decisive influence if the shareholder has
the right to determine the target undertakings market behaviour.
2.5 Does merger control apply in the absence of a
substantive overlap?
2.3 Are joint ventures subject to merger control?
Yes, concentrations that meet the turnover thresholds set out in the
The creation of a joint venture performing on a lasting basis, all the Act require notification to the Office irrespective of their impact on
functions of an autonomous economic entity (concentrative joint competition.
ventures), is subject to merger control.
Joint ventures whose purpose is the coordination of behaviour of 2.6 In what circumstances is it likely that transactions
the parties controlling them (cooperative joint ventures) are not between parties outside the Czech Republic (foreign-to-
considered mergers. However, they may be subject to the scrutiny foreign transactions) would be caught by your merger
of the Office as potential cartel agreements. control legislation?

The Act stipulates that it also applies to concentrations abroad if


2.4 What are the jurisdictional thresholds for application of
these have, or may have, an impact on competition in the Czech
merger control?
market.
A concentration is subject to approval by the Office, if: If the turnover thresholds in the Act are met, it is presumed with
regard to the turnover thresholds taking into account primarily
the aggregate net turnover of all parties to the concentration
in the last completed accounting period within the market of Czech turnover of the parties to the concentration, that a foreign-to-
the Czech Republic exceeds CZK 1.5 billion (approximately foreign concentration might have an impact in the Czech Republic
USD 84,800,000; EUR 61,000,000) and the aggregate net and must therefore be notified to the Office.
turnover of each of at least two of the parties to the
concentration for the last completed accounting period
2.7 Please describe any mechanisms whereby the operation
within the market of the Czech Republic exceeds CZK 250
of the jurisdictional thresholds may be overridden by other
million (approximately USD 14,100,000; EUR 10,100,000);
provisions.
or
the aggregate net turnover of: (i) at least one undertaking
The EC Merger Control Regulation, where applicable, takes
being a party to the merger (consolidation); (ii) an enterprise
precedence over Czech merger control legislation.
or its part being acquired; (iii) an undertaking whose control
is being acquired (target); or (iv) at least one of the
undertakings creating a concentrative joint venture, for the 2.8 Where a merger takes place in stages, what principles
last completed accounting period within the market of the are applied in order to identify whether the various stages
Czech Republic exceeds CZK 1.5 billion (approximately constitute a single transaction or a series of transactions?
USD 84,800,000; EUR 61,000,000) and the aggregate
worldwide net turnover of the other party to the
If several transactions (or the same transaction implemented in
concentration for the last completed accounting period
exceeds CZK 1.5 billion (approximately USD 84,800,000; several stages) take place among the same parties to the
EUR 61,000,000). concentration within a period of 2 years, these transactions are
considered to be a single concentration.
Aggregate net turnover is comprised of the net turnover:
of all parties to the concentration;
of all persons which control the parties to the concentration 3 Notification and its Impact on the Transaction
and persons which will be controlling the parties to the Timetable
concentration after completion of the concentration;
of all persons controlled by the same person that will control 3.1 Where the jurisdictional thresholds are met, is notification
the parties to the concentration after completion of the compulsory and is there a deadline for notification?
concentration; and
of all persons jointly controlled by two or more persons Where the turnover thresholds set forth in the Act are met,
referred to in the previous items. notification is compulsory. There is no deadline for filing the
For the purpose of calculating the turnover, the turnover resulting notification, but the transaction may not be implemented unless,
from the sale of products between the parties to the concentration and until, it has been approved by the Office.
and those persons listed above in respect of the calculation of the The notification proceeding is opened upon delivery of a complete
net turnover, shall not be taken into account. notification to the Office. If the notification is not complete, the
If only part of an undertaking is subject to the concentration, only Office will ask the notifying party to complete it.
that portion of the turnover achieved by this part shall be taken into Pre-notification contacts with the Office are possible. The details
account when calculating the turnover. are provided in the Offices Notice on pre-notification contacts.
Two or more concentrations which take place within a 2-year period
between the same parties to the concentration are treated as one and
the same concentration.

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3.2 Please describe any exceptions where, even though the If the Office fails to decide on the filed notification within the above
jurisdictional thresholds are met, clearance is not time period, the concentration is deemed to be approved after the
required. lapse of such time period.
Czech Republic

The transaction must be notified to the Office if the respective


3.7 Is there any prohibition on completing the transaction
transaction constitutes a concentration within the meaning of the
before clearance is received or any compulsory waiting
Act and the turnover thresholds in the Act are met.
period has ended? What are the risks in completing
before clearance is received?
3.3 Where a merger technically requires notification and
clearance, what are the risks of not filing? Are there any The parties to the concentration are prohibited from implementing
formal sanctions? the concentration before obtaining approval from the Office. For
the risks of closing prior to clearance, please refer to question 3.3.
If the Office discovers that a concentration was not notified to it, or The above prohibition does not prevent the implementation of a
if the parties to the concentration violated the prohibition to public bid, provided that the transaction is immediately notified to
implement a concentration prior to clearance by the Office, the the Office and the acquiring party does not exercise the voting
Office may take measures which it considers necessary to restore rights attached to the securities in question.
effective competition on the relevant market, particularly a
Upon request, the Office may grant the notifying party an
demerger obligation. It may further impose a fine to the party to
exemption to the prohibition on completing the concentration
the concentration which is in breach of the notification obligation.
before clearance is received, if the acquiring undertaking or any
The fine may be up to CZK 10 million (approximately USD
third party runs the risk of suffering substantial damage or another
525,000; EUR 390,000) or 10% of the net turnover of the
serious detriment. The Office must decide on a petition for granting
undertaking(s) which are in breach of the notification obligation.
such an exemption without delay after receiving the petition, but no
There are no other sanctions in addition to the fine. There is a risk,
later than 30 days from the receipt of the petition. The Office may
however, that the respective transaction will be deemed invalid.
attach conditions and obligations necessary for undistorted
This question has not been clarified yet under Czech law.
competition to its decision on exemption.

3.4 Is it possible to carve out local completion of a merger to


avoid delaying global completion? 3.8 Where notification is required, is there a prescribed
format?
The Act does not provide for an exemption of the prohibition to
The notification must be made in a notification form prescribed by
implement concentration prior to clearance by the Office. Still, it
Decree No. 252/2009. It can be downloaded at http://www.compet.cz.
can be argued that agreements pursuant to which the Czech
The notification form must be filed in Czech.
business of the target undertaking is kept strictly separate from the
remaining business until clearance is obtained and could therefore The Decree also specifies the documents that must accompany the
facilitate closing of the transaction without the Czech part. filed notification. If any document is in a foreign language, it must
be translated into Czech. If the translation is not made by an
authorised translator, it must be accompanied by a statement of
3.5 At what stage in the transaction timetable can the
accuracy and be signed by the representatives of the notifying party.
notification be filed?
For long documents, only the relevant parts of these documents
need to be translated.
There is no legal deadline for the notification of a concentration. The
parties may file it as soon as the legally binding transaction If simple copies of the documents required are submitted to the
documents have been signed. The notification may even be Office, they shall be authenticated with the statement of accuracy
submitted prior to the signing of the relevant transaction agreements, and signed by the representatives of the notifying party.
if the parties have at least agreed on the structure of the transaction.
3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which
3.6 What is the timeframe for scrutiny of the merger by the
the clearance timetable can be speeded up?
merger authority? What are the main stages in the
regulatory process? Can the timeframe be suspended by
the authority? If there is no overlap in the activities of the parties to the
concentration, or their aggregate market share is below 15% in case
The Office has 30 days to assess a concentration and decide: of a horizontal concentration, or the market share of any party to the
that the concentration does not constitute a concentration that concentration is below 25% in case of a vertical concentration, it is
must be notified pursuant to the Act; not necessary to fill in parts 6 and 7 of the notification form
(information about relevant markets).
to clear the concentration; or
to open a second phase investigation, because there are The amendment of the Act in 2009 introduced a simplified
serious concerns that the concentration would significantly procedure for concentration approval which allows the parties to the
impede competition. concentration to provide less information and fewer supporting
documents.
If the Office decides to open a second phase investigation, a
decision must be rendered no later than 5 months from the date of The simplified notification of the concentration could be filed
opening the notification proceeding. when:
The period for the Office to decide does not start to run until the none of the undertakings involved is operating in the same
notification filing is complete, i.e. the Office has obtained all relevant market, or their combined share in such a market
does not exceed 15%, and at the same time, none of the
required information and documentation.

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undertakings concerned is operating in the market vertically number of legal and economic aspects that must be taken into account
connected to the relevant market in which another when pursuing the test (such as the necessity of maintaining and
undertaking operates, or their share in every such market further developing competition, the structure of all affected markets,
does not exceed 25%; or the market shares of the parties to the concentration, the economic

Czech Republic
the undertaking acquires exclusive control over the joint and financial power of the parties, the legal and other barriers to entry
venture in which it has participated in joint control so far. to the market, the ability of suppliers and customers of the parties to
Detailed information and requirements are set out in the Offices switch, the development of supply and demand in the affected
Notice on the simplified procedure. However, if the Office came to markets, the needs and interests of consumers and research and
the conclusion that it needs additional information, it could require development). Jurisprudence of the EC courts and the decision-
such information within 20 days from the notification. making practice of the European Commission should also be taken
There are no informal ways in which the clearance timetable can be into account. A concentrations impact on competition must be
sped up. assessed with regard to all these combined criteria. Therefore, a
concentration of parties whose aggregate market share is less than
30%, where one of the merging parties owns an important patent,
3.10 Who is responsible for making the notification and are might be regarded as a significant impediment to competition. On the
there any filing fees? other hand, if the contemplated concentration faces strong
competition even a concentration of parties whose combined market
The notification has to be submitted: share is 60% may be regarded as not impeding competition
in case of merger by the merging parties; significantly. These situations rarely occur in practice, however, and
in case of acquisition of sole control by the parties acquiring the most important factor remains the assessment of whether a
sole control; and dominant position has been created or strengthened.
in case of acquisition of joint control, by the parties acquiring Since the substantive test under the Czech merger legislation does
joint control. not comprise only the creation or strengthening of a dominant
The notification is subject to the payment of an administrative fee position, it is applicable to vertical, as well as horizontal and
of CZK 100,000 (approximately USD 5,200; EUR 3,900). conglomerate concentrations.

3.11 What impact, if any, do rules governing a public offer for a 4.2 To what extent are efficiency considerations taken into
listed business have on the merger control clearance account?
process in such cases?
If the Office has established that a concentration may lead to a
Prohibition of not implementing the concentration before the substantial lessening of competition, the merging parties bear the
clearance decision, shall not apply to concentrations that should burden of demonstrating the existence of circumstances that may
occur on the basis of a public bid or on the basis of a sequence of justify a clearance, such as substantiated concentration-related
operations with listed securities, provided that the notification was efficiencies. However, we are not aware of cases where the Office
filed immediately and the voting rights have not been exercised. considered efficiencies of the concentration.

3.12 Will the notification be published? 4.3 Are non-competition issues taken into account in
assessing the merger?
The Office publishes only an announcement regarding the
notification of concentrations without delay in the Commercial The Office recognises that non-competition clauses are often
Bulletin and also on its website. The announcement contains an integral to concentrations. With respect to concentrations, the
invitation to third parties to submit their potential objections and Office assesses the non-compete obligation in line with the
comments. Commission practice.

4 Substantive Assessment of the Merger and 4.4 What is the scope for the involvement of third parties (or
complainants) in the regulatory scrutiny process?
Outcome of the Process
The Office publishes an announcement regarding the initiation of
4.1 What is the substantive test against which a merger will the notification proceeding in the Commercial Bulletin without
be assessed? delay after the receipt of the concentration notification. The
announcement is also published on the Offices website. The
The Office assesses the notified concentrations against a test which announcement contains an invitation to third parties to submit any
basically corresponds to the test of substantial impediment to potential objections.
effective competition under the EC Merger Regulation. The
When the deadline for submitting objections expires, the role of
Office shall prohibit implementation of concentrations that would
third parties in the regulatory scrutiny process is extremely limited.
significantly impede competition in the relevant market. A
The Office can, for instance, invite them to provide their opinion
significant impediment to competition can be caused by the creation
concerning the impact of the contemplated concentration. Third
or strengthening of a dominant position. If an aggregate combined
parties thus can express their concerns about the concentration.
market share of all parties to the concentration does not exceed
25%, the transaction is considered to not significantly impede
competition. 4.5 What information gathering powers does the regulator
enjoy in relation to the scrutiny of a merger?
Nevertheless, the substantive test is not only restricted to the
creation or strengthening of a dominant position. There are a
The Office is entitled to require all relevant information and

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documents from the parties to the concentration, third parties and order to decrease share in the affected markets or to remove
other public authorities. In extreme cases, the Office is also entitled competitive overlap; adopting a commitment of the parties that they
to physically enter land plots, premises, rooms and vehicles owned will not increase prices in a certain time, or to increase prices only
by the parties to the concentration, to examine their accounting for objective reasons; terminating all exclusive agreements; or
Czech Republic

books and other records and to make copies, as well as to require easing the market entry for new competitors by providing access to
explanations. own infrastructure, etc.
If the information and/or documents provided by the parties to the
concentration are not complete, accurate and true, the Office may 5.3 To what extent have remedies been imposed in foreign-
impose a fine of up to CZK 300,000 (approximately USD 15,800; to-foreign mergers?
EUR 11,800) or up to 1% of their yearly net turnover. The Office
can also impose a fine of up to CZK 100,000 (approximately USD Until now, the Office did not impose remedies on foreign-to-foreign
5,200; EUR 3,900) on third parties if they obstruct the proceedings. concentrations.

4.6 During the regulatory process, what provision is there for 5.4 At what stage in the process can the negotiation of
the protection of commercially sensitive information? remedies be commenced? Please describe any relevant
procedural steps and deadlines.
Parties to the concentration, as well as third parties, cannot withhold
confidential information from the Office. The Office is, however, The parties to the concentration can propose remedies before or
obliged to respect the confidentiality of all business secrets during the first phase notification proceedings or within 15 days
indicated by the parties in all submitted documents. In addition to from initiating the second phase proceedings. This deadline can be
the confidential version of the respective documents, the Office prolonged only in exceptional circumstances.
may also require non-confidential versions. The Office then decides on imposing remedies in its final decision.
All business secrets indicated by the parties must be deleted from
the published documents and must not be disclosed to third parties.
5.5 If a divestment remedy is required, does the merger
Business secrets may only be disclosed to the parties to the
authority have a standard approach to the terms and
concentration. The final decision can only be published in its non- conditions to be applied to the divestment?
confidential version.
Under the Act, the Office staff are also obliged (during their The Office does not have a standard approach with regard to the
employment at the Office, as well as after its termination) not to terms and conditions to be applied to divestments. The Offices
disclose business secrets and other confidential information about approach is formulated on a case-by-case basis.
which they learned during their employment at the Office.

5.6 Can the parties complete the merger before the remedies
5 The End of the Process: Remedies, Appeals have been complied with?
and Enforcement
In the case of remedies consisting in the promise of prospective
behaviour, the parties to the concentration can complete the
5.1 How does the regulatory process end? concentration before the remedies have been complied with. The
Office may, however, also impose remedies which must be
In the first phase of the notification proceedings, the Office has 30 complied with before the implementation of the concentration.
days to decide whether to:
declare that the transaction does not constitute a
concentration that requires notification pursuant to the Act; 5.7 How are any negotiated remedies enforced?

approve the concentration;


If the parties to the concentration do not comply with the remedies
refer the case to the Commission; or stated in the Office decision, the Office can order them to sell shares
initiate the second phase of the proceedings. or ownership interest or an enterprise or its part acquired through
In the last case, the Office must ultimately decide whether to clear the implementation of the concentration. The Office can also order
the transaction or not within 5 months from the beginning of the the parties to terminate the contract on the basis on which the
notification proceedings at the latest. concentration was implemented or to take other appropriate
measures.
5.2 Where competition problems are identified, is it possible Furthermore, the Office may impose fines for a breach of the
to negotiate remedies which are acceptable to the negotiated remedies specified in question 3.3.
parties?
5.8 Will a clearance decision cover ancillary restrictions?
In order to avoid a negative decision by the Office on the notified
concentration, the parties to the concentration may offer remedies to Yes, if any ancillary restrictions are considered as appropriate for
the Office, which should eliminate the possible negative effects of implementing the concentration, they shall be concerned in the
the notified concentration. The decision on acceptance of the clearance decision.
proposed remedies is fully at the discretion of the Office.
The Office itself may also propose certain remedies and, if they are
5.9 Can a decision on merger clearance be appealed?
accepted by the parties to the notification proceeding, can
incorporate them into its clearance decision.
Within 15 days from the date of delivery of the decision, the party
The proposed remedies might be: selling an enterprise or its part in

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to the proceeding is entitled to appeal the decision of the Office. 6 Miscellaneous


The appealed body is the Chairman of the Office.
The decision of the Chairman of the Office can be challenged by 6.1 To what extent does the merger authority in the Czech
bringing an administrative action to the Regional Court in Brno.

Czech Republic
Republic liaise with those in other jurisdictions?
However, the administrative action has no suspensive effect to the
decision of the Office unless the court grants it at the special request At the level of know-how exchange, the Office cooperates with the
of the plaintive. European Commission and with the competition authorities of other
Third parties are prevented from appealing the decision. They are countries within the European Competition Network (ECN), the
only entitled to raise objections regarding the concentration to the International Competition Network (ICN) and the Organisation for
Office (see question 4.2). Cooperation and Development (OECD).

5.10 What is the time limit for any appeal? 6.2 Are there any proposals for reform of the merger control
regime in the Czech Republic?
The Offices decision can be appealed within 15 days to the
Chairman of the Office. The Chairmans decision can be reviewed At present, there are no new proposals to reform the merger control
by the Regional Court in Brno. The action to the Regional Court regime.
has to be lodged within 2 months.
6.3 Please identify the date as at which your answers are up
5.11 Is there a time limit for enforcement of merger control to date.
legislation?
This chapter is up to date as of September 2012.
The merger control legislation can be enforced within 10 years of
the breach of the merger control legislation (objective limitation
period). In addition, the Office can initiate its proceedings only
within 5 years of the moment when it found out about the breach of
law (subjective limitation period).

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Schoenherr Czech Republic

Martin Nedelka Radovan Kub


Schoenherr Schoenherr
nm. Republiky 1079/1a nm. Republiky 1079/1a
CZ-110 00 Prague CZ-110 00 Prague
Czech Republic

Czech Republic Czech Republic

Tel: +420 225 996 500 Tel: +420 225 996 515
Fax: +420 225 996 555 Fax: +420 225 996 555
Email: m.nedelka@schoenherr.cz Email: r.kubac@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Martin Nedelka is a partner in Schoenherrs Prague office. He Radovan Kub is an attorney at law with Schoenherrs Prague
obtained his law degrees from the Charles University in Prague office since 2008. He specialises in competition, state aid,
(M.A.; PhD), the University of Regensburg (LL.M.) and the regulatory and public procurement law. Radovan received a
University College Dublin (LL.M.). Martin Nedelka is a member of Master of Law degree from Palack University in Olomouc and an
the Czech, Slovak and Brussels bars. LL.M. degree from the University of Saarbrcken. He worked as
Martin specialises in all aspects of Czech, Slovak and EU an intern with DG Competition of the European Commission as
antitrust law, including merger control law. He has notified a large well as with the Ministry of Economy of Baden-Wrttemberg.
number of mergers to the Czech and Slovak competition Radovan advises both local and international clients from various
authorities. Martin also has broad experience in representing sectors in investigations of the Czech and Slovak competition
enterprises and individuals before the Czech or Slovak authorities and the European Commission (e.g. Siemens, J&T,
competition authorities, as well as the European Commission in Panasonic) as well as in merger control cases (e.g. Strabag, Intel,
respect of cartel or dominance cases. He also advises on issues Procter & Gamble). He also provides competition compliance
of state aid, as well as in regulatory matters (energy, trainings to the clients and advises while developing their
telecommunications). compliance programmes (such as Samsung, Linde, Assa Abloy).
In the field of public procurement law, Radovan acts for clients
from the public sector in the process of conducting public tenders
(such as Carlsbad Region, Region st nad Labem), as well as in
the proceedings before the Czech competition authority
(Sobslav Municipality). He also advises private companies
while filing complaints (e.g. Deutsche Bank, EvoBus). Thanks to
his internship with the European Commission, Radovan got a
broad experience in state aid law. Within Schoenherr, he has
advised for instance Agrofert, the City of Ostrava and the Prague
Congress Centre on state aid matters. Radovan published
several articles on competition and state aid law. He is fluent in
Czech, English and German.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend
of experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be
one of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means
that we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 23

Hungary Anna Turi

Schoenherr Christoph Haid

1 Relevant Authorities and Legislation 2003 on Electronic Communications, Act XL of 2008 on Natural
Gas Supply). In case of a merger of financial institutions - in
addition to obtaining authorisation from the GVH, if necessary - a
1.1 Who is/are the relevant merger authority(ies)?
special approval from the Hungarian Financial Supervisory
Authority (PSZAF) is required. Also, in other sectors (e.g.
The relevant merger authority is the Hungarian Competition Office
energy, railroad-transportation) the approval by the respective
(Gazdasgi Versenyhivatal GVH, website: www.gvh.hu) and its
authorities (for example the Hungarian Energy Office, Hungarian
decision-making body, the Competition Council. The GVH is a
Railway Office) is required in addition to the GVHs authorisation.
state administrative authority that is independent from the
Government and only reports to the Hungarian Parliament. In August 2011 a new concept related to key business entities for
the national economy (providing essential national public service
Decisions of the GVH may be challenged before the Metropolitan
or services of general economic interest, in the following: key
Court of Budapest (Fvrosi Brsg).
business entity) was introduced to the Competition Act. Acquiring
control in a liquidation proceeding over a key business entity
1.2 What is the merger legislation? involves e.g. different rules for the submission obligation, or
different control rights, as well as different procedural deadlines.
The relevant merger legislation is the Hungarian Competition Act Please see also the answer to questions 3.1, 3.6 and 3.7 for details.
(Act LVII of 1996 on the Prohibition of Unfair and Restrictive
Market Practices, Competition Act) in particular part I chapter 6.
2 Transactions Caught by Merger Control
The Competition Act sets out both substantive and procedural rules
of merger proceedings. As the GVH is part of the public Legislation
administration, Act CXL of 2004 on the General Rules of
Administrative Proceedings and Services is applicable to the 2.1 Which types of transaction are caught in particular, how
GVHs procedure when the Competition Act does not contain is the concept of control defined?
special provisions regarding the issue in question.
In addition, there are relevant guidelines (including so-called According to the Competition Act, a concentration occurs when:
position statements) and notices of the GVH such as two or more previously independent undertakings merge;
differentiating between concentrations subject to authorisation in one or more persons already controlling at least one
simplified or full procedure or notice on conditions and undertaking, or one or more undertakings acquire, whether
obligations in merger clearance decisions. by purchase of shares/securities or assets, by contract or by
any other means, direct or indirect control of the whole or
parts of one or more other undertakings; or
1.3 Is there any other relevant legislation for foreign mergers?
two or more undertakings create a joint venture performing
on a lasting basis all the functions of an autonomous
There is no other relevant legislation for foreign mergers. The economic entity.
Competition Act applies to any transaction that meets the stipulated
Control shall be constituted by rights, contracts or any other means
turnover thresholds.
which, either separately or in combination, confer the possibly of
exercising decisive influence over an undertaking, in particular by
1.4 Is there any other relevant legislation for mergers in way of:
particular sectors? a) holding over 50% of the shares, stocks or voting rights in the
controlled company;
Sectors regulated by specific legislation include the financial, b) having the power to designate, appoint or dismiss the
media and telecommunication, energy (electricity and gas majority of the executive officers of the other company;
industries), pharmaceutical and railroad transport sectors.
c) having the power, by contract, to assert major influence over
Merger rules for these particular sectors are partly contained in the the decisions of the other company; and
Competition Act and partly in the sector specific regulatory acts d) acquiring the ability to assert major influence over the
(i.e. Act CXII of 1996 on Credit Institutions and Financial decisions of the other company (de facto control).
Enterprises, Act LXXXVI of 2007 on Electric Energy, Act C of

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2.2 Can the acquisition of a minority shareholding amount to 2.7 Please describe any mechanisms whereby the operation
a merger? of the jurisdictional thresholds may be overridden by other
provisions.
The acquisition of a minority shareholding amounts to a merger
only if it confers (sole or joint) control over the target undertaking. Temporary acquisitions of control for less than one year by
insurance undertakings, financial institutions, investment

Hungary
companies or property managing organisations do not have to be
2.3 Are joint ventures subject to merger control?
notified, if the purpose of the acquisition was resale and if the
exercise of control is limited to the extent to what is absolutely
A joint venture which is capable of performing all the functions of
indispensable. The period of one year may be extended upon
an autonomous business entity on a permanent basis (full function
request, if the undertaking can prove that it was not possible to
joint venture) is subject to merger control, except if the joint venture
divest within one year.
has as its object or effect the co-ordination of the activities of the
joint venture partners. Such coordinative joint ventures must be Moreover, the GVH has generally no competence to assess
assessed against cartel provisions. transactions that have a Community Dimension pursuant to the
European Merger Regulation (EUMR).

2.4 What are the jurisdictional thresholds for application of


merger control? 2.8 Where a merger takes place in stages, what principles
are applied in order to identify whether the various stages
constitute a single transaction or a series of transactions?
A merger must be notified to GVH if:
the total net group turnover of the undertakings concerned
The principles are similar to the ones under the EUMR: if the steps
exceeded HUF 15 billion (approximately 54 million) in the
together constitute an economically linked (single) transaction, only
previous business year; and
one joint filing is necessary.
there are at least two undertakings concerned whose total
group turnover in the preceding business exceeded HUF 500
million (approximately 1.8 million) each. 3 Notification and its Impact on the Transaction
Please note that for the purpose of calculating the turnover Timetable
thresholds:
Intra group revenues must be disregarded. The notion of 3.1 Where the jurisdictional thresholds are met, is notification
intra group refers to revenues from sales within the group compulsory and is there a deadline for notification?
of one undertaking concerned, and also to revenues from
sales between the groups of undertakings concerned.
If the thresholds and other requirements of the Competition Act are
In the case of foreign undertakings only the net sales
met, a filing for an authorisation of the GVH is compulsory (except
revenues generated from the goods sold or services rendered
for transactions with a Community Dimension, see question 2.7
in Hungary are to be taken into account.
above).
Special rules apply for the calculation of turnover for
financial institutions and insurance companies. The applicant(s) must notify the GVH of the transaction within 30
For the purposes of calculating the HUF 500 million calendar days from the occurrence of the first of the following events:
threshold, turnovers of undertakings that were acquired from the publication of the invitation to tender;
the same group within two years preceding the acquisition of the conclusion of the binding contract; or
control by the acquirer group must also be considered, even
the acquisition of the controlling right, where control is
if such acquisitions were at that time not subject to
acquired through other means.
notification.
If control is acquired over a key business entity during the
liquidation proceeding, the application for the authorisation for
2.5 Does merger control apply in the absence of a such control has to be submitted to the GVH within 15 days from
substantive overlap?
the date of the earliest of the above.

Yes, all concentrations must be notified to the GVH if the relevant


thresholds are met. 3.2 Please describe any exceptions where, even though the
jurisdictional thresholds are met, clearance is not
required.
2.6 In what circumstances is it likely that transactions
between parties outside Hungary (foreign to foreign Please see the answer to question 2.7.
transactions) would be caught by your merger control
legislation?
3.3 Where a merger technically requires notification and
All foreign to foreign transactions that meet the turnover thresholds clearance, what are the risks of not filing? Are there any
have to be notified. In order to avoid having to notify too many formal sanctions?
transactions without actual relevance for the Hungarian market, the
Competition Act uses a special method for calculating turnover Failure to notify a transaction within the 30-day deadline may lead
thresholds for foreign undertakings whereby only Hungarian to daily fines of up to HUF 200,000 (approximately 714), with no
turnover of undertakings established outside Hungary must be maximum for the total fine.
considered, please see question 2.4 above. The Competition Act does not contain an explicit suspension
clause, i.e. that the implementation of a transaction prior to closing
is forbidden (please see also question 3.7).

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3.4 Is it possible to carve out local completion of a merger to If, however, a transaction that has been closed early is finally
avoid delaying global completion? prohibited by the Authority, the Authority may impose all measures
necessary to restore effective competition (including divestments).
In the absence of a suspension clause, there is no express In addition, one may argue that contracts underlying the prohibited
requirement for a hold separate solution. Therefore, carving out transaction are not enforceable.
local completion may not be needed. For possible risks of closing The head of the Competition Council recently declared that the
Hungary

before clearance, please see question 3.7. Competition Act does not prohibit implementation before
clearance.
3.5 At what stage in the transaction timetable can the
notification be filed?
3.8 Where notification is required, is there a prescribed
format?
A notification may be filed as soon as (but not earlier than) the
transaction agreements have been signed, the public bid announced Yes. Hungarian and English language versions of the filing form
or the controlling interest acquired. Unlike under European law, can be downloaded from the website of the GVH (www.gvh.hu),
prior notification (e.g. on the basis of a good faith intention to but may only be submitted in Hungarian.
conclude an agreement) is not permitted under Hungarian law. No
formal procedure is available during which an unsigned contract
could be pre-reviewed and evaluated by the GVH. As a result of a 3.9 Is there a short form or accelerated procedure for any
recent amendment to the merger control system a new guidance on types of mergers? Are there any informal ways in which
the clearance timetable can be speeded up?
pre-notification contacts was issued, detailing the informal rules
and practice of the GVH in case of such talks. Practice shows that
these talks can speed up the proceeding as the parties can The Authority issued a new filing form applicable as of 1 February
incorporate the GVHs recommendations into the formal filing 2012. This also created the availability of a short filing form (i.e.
form, and thereby reduce the chances of an additional data request. the last sections of the full filing form do not have to be completed
if certain conditions - regarding the market shares - are fulfilled).
As a result, less data has to be provided for non-problematic cases,
3.6 What is the timeframe for scrutiny of the merger by the which account for most cases before the Authority.
merger authority? What are the main stages in the
Practice shows that the informal pre-notification talks can speed up
regulatory process? Can the timeframe be suspended by
the authority? the proceeding as the parties can incorporate the GVHs
recommendations and requests into the formal filing form, and
Following the submission of a notification, the GVH may return the thereby reduce the chances of an additional data request. Further,
filing within 15 calendar days and request that the parties provide there are shorter deadlines for key business entities for the national
further information within a time period specified by the case economy.
handler, usually around one month (which may be extended once at
the request of the parties). Issuing such data request stops the clock 3.10 Who is responsible for making the notification and are
for the GVH until receipt of the applicants response. Once the there any filing fees?
GVH has received the complete filing, it has 45 calendar days to
assess the impact of the transaction (Phase I). Within Phase I - The responsibility for submitting the filing rests with the acquirer.
which may be extended by 20 calendar days - the Competition In case of a merger or a joint venture (as opposed to other types of
Council (on the basis of a report prepared by a case handler) decides control), both undertakings concerned are obliged to file the
whether to clear the transaction or open Phase II proceedings in notification. Regardless of who is responsible for submitting the
order to assess the transaction in more detail. A final decision in filing, a Power of Attorney has to be provided from both the
Phase II has to be adopted within four months (three months in case acquirer and the target. Upon submission of the notification, a
of acquisition of control over a key business entity during a filing fee of HUF 4 million (approximately 14,300) is payable. An
liquidation proceeding) from having received the complete filing. additional fee of HUF 12 million (approximately 43,000) is
Phase II may be extended by another two months (and only by payable if Phase II proceedings have been opened. The Phase II fee
another 20 calendar days in case of key business entities). For the has to be paid within eight days of the Authoritys decision to open
concept of key business entities please see also question 1.4. Phase II proceedings.

3.7 Is there any prohibition on completing the transaction 3.11 What impact, if any, do rules governing a public offer for a
before clearance is received or any compulsory waiting listed business have on the merger control clearance
period has ended? What are the risks in completing process in such cases?
before clearance is received?
The rules governing a public offer applicable to the public offer at
There is no specific prohibition in the Competition Act for hand are relevant in a merger control clearance process from the
completing the transaction before clearance is granted. Once perspective of determining the date of the publication of a public
clearance is granted, it has retroactive effect to the day of bid (from which the notification has to be submitted within 30
conclusion of the contract underlying the merger (until clearance days). If the public bid is published outside Hungary, the national
contracts are provisionally considered as not having come into (takeover) laws of the country where the public bid is published will
existence). Provided the parties have filed a notification in due time be applicable. The correct application of the rules of the public bid
and merger clearance is granted, no sanction may be imposed on the is significant as a failure to comply with the merger notification
parties simply for the reason of having completed the transaction deadline in Hungary triggers daily fines.
before clearance (as opposed to imposing fines for not notifying
within the required time limit).

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3.12 Will the notification be published? (e.g. financial supervisory authority) in separate procedures.
However, some acts for particular sectors (e.g. media) oblige the
The Authority does not have a clear practice concerning publication GVH to obtain the opinion of the special sectoral/industrial body in
about the start of a merger control proceeding (as opposed to the a merger related to that specific sector. In a recent case the special
initiation of cartel proceedings which are always published on its body in the industrial sector denied its consent to the transaction.
website). The Merger Control Division of the Authority decides on The GVH signalled that it would also prohibit the transaction, as a

Hungary
when a notification will be published on a case by case basis. In the result of which the applicant withdrew its application and the GVH
last two years an insignificant number of publications (of a very terminated the proceedings.
short summary of the facts, not the notifications themselves) took
place on the initiation of merger control proceedings. However,
after final decision, press releases as well as the non-confidential 4.4 What is the scope for the involvement of third parties (or
complainants) in the regulatory scrutiny process?
version of the (final) decisions of the Authority on the
concentrations are published on the Authoritys website.
Any third person may submit a complaint about alleged
infringements of the Competition Act - e.g. a failure to submit a
4 Substantive Assessment of the Merger and merger notification - to the GVH, which has two months from
Outcome of the Process receipt of the complaint to decide whether to open proceedings. A
dismissal of the complaint may be appealed before the Metropolitan
Court of Budapest.
4.1 What is the substantive test against which a merger will
be assessed? Third parties may submit (informal) comments on a notified
transaction to the GVH. Such an informal comment does not confer
The GVH may not prohibit a transaction if it does not lead to a any rights on the third party, in particular the third party will not
substantive impediment of competition in the affected market. The have access to the file.
new substantive test was introduced with effect from 1 June 2009
which replaced the previously applied dominance test. The 4.5 What information gathering powers does the regulator
explanatory notes of the amendment introducing the effective enjoy in relation to the scrutiny of a merger?
competition test refers to both the SLC tests (significant lessening
of competition used in the USA) and the SIEC (significant The GVH has the right to request information from the parties to the
impediment of effective competition, applied in the European transactions and also from third parties (e.g. competitors, trade
Union). The new wording of the Competition Act is not identical unions, customers, etc.). Failure to supply the requested
to that of the EUMR but reflects more the SLC test: the GVH may information or submission of incorrect/misleading information may
not prohibit the transaction if it does not lead to a substantive entail fines from HUF 50,000 (approximately 180) to a maximum
impediment of competition [and not the: significant impediment of of 1% of the turnover in the previous financial year. In case of a
effective competition - remark by the author] on the effected natural person, the fine may not exceed HUF 500,000
market, in particular as a result of the creation or strengthening of a (approximately 1,820).
dominant position. One may assume that this test affords the GVH
with wider possibilities to take economic considerations into
4.6 During the regulatory process, what provision is there for
account when assessing a transaction.
the protection of commercially sensitive information?

4.2 To what extent are efficiency considerations taken into Third parties generally do not have access to the file. An exception
account? applies to persons who have a right to access by law, for example
official experts, prosecutors and other state authorities.
The Hungarian Competition Act does not explicitly mention
The parties to the proceeding may specifically request certain
efficiency considerations, but they can be implicitely be deducted
information be treated as confidential, i.e. that third parties access
from the wording of the Competition Act when referring to
to the provided documents or to the making of copies thereof be
advantages and disadvantages must be taken into account when
limited.
assessing a merger. A guideline issued in 2010 on the general
methods for assessing a merger contains a reference to the efficiency When a foreign authority provides information to the GVH, such
considerations and defines the criteria similarly to that of EU law: If authority may also request that part or the entire content of their
the concentration reduces the productions costs of the undertakings response is treated as a business secret and therefore confidential.
concerned, this may lead to a decrease in price. When assessing these Final decisions of the GVH are always published on its website.
efficiency considerations it is important that should be merger-
specific, numerically verifiable, and must benefit the consumers to
the appropriate extent. The Guidelines state that it is the task of the
5 The End of the Process: Remedies, Appeals
undertakings concerned to demonstrate the above criteria. The and Enforcement
notification form contains a section to demonstrate the above criteria.
As a result, the Hungarian Authority is expected to follow European 5.1 How does the regulatory process end?
competition law with respect to efficiency considerations.
Both Phase I and II proceedings end with a decision of the
4.3 Are non-competition issues taken into account in Competition Council. In this decision, the GVH either clears (with
assessing the merger? or without conditions and/or obligations) or prohibits the
transaction. The GVHs decision may be challenged by the parties
Non-competition issues are not taken into account at the GVHs within 30 days from receipt of the decision (see question 5.9).
assessment. Such issues are assessed by the respective authorities It is also possible that the applicant withdraws the filing or that the

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GVH establishes that no filing was required. In this case the decision. Although the Competition Act itself does not contain the
proceeding ends with a decision of the GVH on the termination of requirement of direct connection of the ancillary restraint with the
the process. merger transaction, as EU law does, the practice of the Authority
requires the above connection.
5.2 Where competition problems are identified, is it possible
to negotiate remedies which are acceptable to the 5.5 If a divestment remedy is required, does the merger
Hungary

parties? authority have a standard approach to the terms and


conditions to be applied to the divestment?
Although in the majority of the cases unconditional authorisation is
granted, the Competition Act expressly provides for the possibility The principles for imposing remedies - including divestments - are
of clearing a transaction subject to conditions or obligations. The laid down in the GVHs notice about conditions and obligations in
Competition Act entrusts the GVH with a huge discretion to merger clearance decisions (Nr 1/2008). The notice mainly deals
determine the conditions/obligations it wishes to impose on the with various aspects of defining the object and the buyer in the case
undertakings. However, the Hungarian practice is in line with the of a divestment remedy. The person of the buyer may be specified
European one whereby it is usually the parties (and not the in the decision (buyer specified in advance) or found later within a
Authority) who offer commitments (either already in the time limit - usually not longer than six months - set by the GVH (in
submission of the filing or later in the course of the proceeding which case it has to be approved by the GVH).
when the GVH confronts them with an identified competition
concern) and these remedies are informally negotiated before the
5.6 Can the parties complete the merger before the remedies
GVH includes them in its final decision. have been complied with?
In practice the GVH will only include such remedies in its final
(clearance) decision that are either suggested or accepted by the If a transaction is cleared subject to a prior condition, the parties
parties. As a general rule, the GVH will decide about the remedies may not complete the merger before fulfilling the condition. For
during a Phase II proceeding, but it is not impossible for the GVH subsequent conditions, implementation may occur before the
to decide in a Phase I proceeding when both the competition remedies have been complied with but the decision becomes
concern and its solution are easily identifiable. ineffective when the condition is not fulfilled. Failure to comply
Whether the remedies are complied with by the applicants will be with an obligation (remedy) may lead to the revocation of the
observed by the GVH ex officio. In this respect the GVH initiates clearance decisions and/or fines on the parties.
review-proceedings.
5.7 How are any negotiated remedies enforced?
5.3 To what extent have remedies been imposed in foreign-
to-foreign mergers? The GVH conducts a follow-up investigation to verify whether
remedies have been adhered to. In the case of non-compliance with
In a recent case the GVH cleared the acquisition on the cement the imposed remedies, the GVH may impose a fine unless the GVH
market of a Slovak company by a Swiss group (the direct acquirer establishes that, due to a change in the circumstances, compliance
being a German subsidiary) by subject to a divesture. The GVH with the remedies is no longer reasonable. In the latter case, or if
cleared the transaction on the precondition that both the acquirer the remedy has been complied with, the GVH will terminate the
and the target commit themselves to divest their business shares in follow-up investigation.
a Hungarian subsidiary, in which they both had 35-35% of the
shares each. However, although the direct acquirer and direct target
5.8 Will a clearance decision cover ancillary restrictions?
were foreign companies, both had significant presence and (also in
the form of subsidiaries) and sales to Hungary. Even if remedies are
Ancillary restraints are automatically covered by the clearance
imposed on foreign-to-foreign mergers, they will most likely relate
decision. However, the GVH stated several times referring to the
only to the Hungarian market.
practice of the European Commission, that as a main rule, it does
not examine whether the provisions on the restraint on competition
5.4 At what stage in the process can the negotiation of contained in the transaction agreement(s) do actually constitute
remedies be commenced? Please describe any relevant ancillary restraints. This has to be assessed by the applicants.
procedural steps and deadlines. Although the Competition Act itself does not contain the
requirement of direct connection of the ancillary restraint with the
Remedies may be negotiated at any stage during the proceeding merger transaction, as EU law does, the practice of the Authority
(but before the Competition Councils final decision). Although a requires the above connection.
separate notice has been issued on remedies, there are no exact
deadlines or procedural steps to be taken into account, only a few
5.9 Can a decision on merger clearance be appealed?
general guidelines.
Identifying the competition issue itself is a task of the GVH. In case Merger decisions may be challenged before the Metropolitan Court
the applicants have not submitted structural or behavioural within 30 days from receipt of the decision.
proposals along with the application itself, the case handler will
signal the competition issue towards the applicants, providing help The Metropolitan Court has not only the right to annul the decision
to work out the appropriate measures. Should the Competition and order new proceedings before the GVH, but it may also alter the
Council identify the competition issue, then either the Council will decision. The initiation of such a procedure does not have any
approach the applicants, or it will decide to give the documentation. suspending effect on the enforcement of the GVHs decision. The
decision of the Metropolitan Court may be appealed before the
Ancillary restraints are automatically covered by the clearance Metropolitan Court of Appeal. There is no further right of ordinary

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appeal but the parties may initiate an extraordinary review 6.2 Are there any proposals for reform of the merger control
procedure before the Hungarian Supreme Court. regime in Hungary?

The last few years have seen various changes to the merger control
5.10 What is the time limit for any appeal?
regime (changes to substantive law in 2009 and 2010 and changes
to the filing form and update/issuance of guidelines/notices in 2011
The time limit for appeal is 30 days from receipt of the decision.

Hungary
and 2012).
Therefore no specific new amendments are foreseen with regard to
5.11 Is there a time limit for enforcement of merger control the merger control regime this year. What is to be expected is
legislation? refining the practice related to the new documents adopted in the
first half of 2012. This possibly includes further clarifying and
The limitation period is five years. resolving the problems arising from the difference between the
conditions (including those related to market shares) of simplified
6 Miscellaneous procedure (Phase I) and a short filing form, and consequently
between full procedure - Phase II - and full filing form.

6.1 To what extent does the merger authority in Hungary


liaise with those in other jurisdictions? 6.3 Please identify the date as at which your answers are up
to date.
The GVH is a member of the European Competition Network and
thus cooperates closely with the competition authorities of other The information set out in the above sections is up to date as of 7
Member States of the European Union. The GVH is also part of the September 2012.
International Competition Network.

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Schoenherr Hungary

Anna Turi Christoph Haid


Schoenherr Hungary Schoenherr
Buday Lszl utca 12 Tuchlauben 17
H-1024 Budapest A-1010 Vienna
Hungary Austria
Hungary

Tel: +36 1 345 87 78 Tel: +43 1 534 37 119


Fax: +36 1 345 87 77 Fax: +43 1 534 37 6119
Email: a.turi@schoenherr.eu Email: c.haid@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Anna Turi is an attorney at law specialised on competition law and Christoph Haid is a partner at Schoenherr in Vienna, who joined
corporate/M&A. She obtained her law degrees from the the EU & Competition team in January 2004. He has since then
University ELTE, Budapest (Mag. Iur. 2005) and from the been involved in numerous high-profile merger control
University of Regensburg, Germany (LL.M. 2006). She gained proceedings before the Austrian competition authorities and the
experience in the functioning of the European Commission in European Commission and coordinated global merger control
Brussels as a stagiaire in 2006/2007. She earned a further filings, particularly in CEE, where his focal point of work is. In
degree as a Competition Law Specialist at University Pzmny addition, he also advises clients on all aspects of antitrust law,
Pter Budapest, Dek Institute of Post-graduate Studies (in including infringement proceedings before the European courts
2010). She advised in various merger control cases before the with respect to alleged anticompetitive practices. Christoph is
Authority involving several industrial sectors, as well as in frequently involved in supporting clients to implement
connection with distribution agreements, compliance comprehensive anti-trust compliance programmes.
programmes and represented clients before the Authority in cartel
cases, including the submission of leniency applications.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of
experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be one
of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means that
we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 33

Macedonia Srana Petronijevi

Moravevi Vojnovi Zdravkovi


Olga ipka
in cooperation with Schoenherr

1 Relevant Authorities and Legislation The following Commission Guidelines are applicable to merger
control (some of the guidelines can be found in English on the
Commissions website at: http://www.kzk.gov.mk/eng/zapis.asp
1.1 Who is/are the relevant merger authority(ies)?
?id=6):
Guidelines for determining the cases in which when
Macedonian Commission for Protection of Competition
assessing concentrations the Commission for the Protection
The Commission for Protection of Competition (the Commission, of Competition may issue summary decisions (June 2012).
http://www.kzk.gov.mk) was established in 2005 as an independent Guidelines on defining relevant markets for the purpose of
administrative body. Pursuant to the Commissions reports, there the LPC (May 2011).
were no merger notifications filed in 2005, while the Commission Guidelines on the manner of preparing a non-confidential
resolved 9 merger control cases in 2006 and 23 in 2007. 28 merger version of a Commission decision (February 2011).
notifications were assessed in 2008 (out of which 26 were cleared Guidelines on the method of setting fines (January 2011);
in summary proceedings, 1 was cleared conditionally and 1
Guidelines on remedies acceptable to the Commission under
notification was rejected). In 2009 there were 17 merger
chapter III of the 2005 LPC on the control of concentrations
notifications, while in 2010, there were 22. In 2011, 18 (December 2009).
notifications were cleared and 3 were rejected. According to the
Guidelines on Assessment of Vertical and Conglomerate
data on http://www.kzk.gov.mk, in 2012, the Commission has Concentrations (November 2008).
received 10 notifications so far, while in the last two years, it has
Guidelines on Assessment of Horizontal Concentrations
assessed 32 notifications, clearing all of them.
(April 2007).
Administrative Court of Macedonia
Decisions of the Commission can be challenged before the 1.3 Is there any other relevant legislation for foreign mergers?
Administrative Court of Macedonia. The procedure before the
court is governed by the Law on Administrative Disputes (Official
The LPC applies to foreign mergers, provided that the jurisdictional
Gazette of RM, nos. 62/06, 105/10).
thresholds are met. Please refer to question 2.6.

1.2 What is the merger legislation?


1.4 Is there any other relevant legislation for mergers in
particular sectors?
An effective merger control regime was introduced into the
Macedonian legal system by the Law on the Protection of The LPC applies to all undertakings irrespective of the industry
Competition (Official Gazette of the Republic of Macedonia, nos. they are active in. Transactions in the following sectors are also
4/05, 70/06, 22/07; 2005 LPC) which became effective on 1 subject to sector-specific legislation:
January 2005 providing for both a procedural and substantive legal
Banking: Direct or indirect acquisitions of a qualified
framework of merger control. On 13 November 2010, the Law on shareholding (i.e. 5%, 20%, 33% and 50%) in Macedonian
the Protection of Competition (Official Gazette of Macedonia, nos. banks can only be consummated subject to approval by the
145/10, 136/11) (LPC) entered into force and replaced the 2005 National Bank of Macedonia (NBM) Article 59 of the
LPC. The last amendment of the LPC was introduced at the end of Law on Banks (Official Gazette of RM, nos. 67/07, 90/09,
2011. The Law on General Administrative Proceedings (Official 67/10).
Gazette of Macedonia, nos. 38/05, 110/08) governs aspects of the Insurance: Direct or indirect acquisitions of a qualified
proceedings before the Commission to the extent that these aspects shareholding (i.e. 10%, 20%, 33%, 50% and 75%) in
are not regulated by the LPC. Macedonian insurance companies requires the prior approval
by the Minister of Finance Article 18 of the Law on
With respect to merger control, the government adopted the new
Supervision of Insurance (Official Gazette of RM, nos.
Ordinance on the Form and Contents of the Notification of 27/02, 79/07, 88/08, 67/10, 44/11).
Concentration and the Necessary Documentation which is
Investment funds: Direct or indirect acquisitions of a
submitted together with the Notification (Official Gazette of the
qualified shareholding (10%, 20%, 30% and 50%) require
Republic of Macedonia no. 44/12) (Ordinance on the content of the prior approval by the Securities Exchange Commission
the merger notification) in 2012. Article 13 of the Law on Investment Funds (Official Gazette
Further, the Commission adopted several guidelines under the LPC. of RM, nos. 12/09, 67/10, 24/11).

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Voluntary pension funds: Any acquisition of shares requires that such influence may, in particular, be exercised by ownership or
the prior approval of the Voluntary Pension Insurance rights over assets of an undertaking, as well as rights or agreements
Agency (Article 27 of the Law on Voluntary Pension Funds which confer the possibility for exerting decisive influence over the
and Pension Schemes (Official Gazette of RM, nos. 07/08, composition, voting or decision-making of the bodies of the
124/10, 17/11).
undertaking. However, it can be assumed that the Commission
Media: The Broadcasting Law (Official Gazette of RM, nos. would look at applicable EU rules and practice for guidance on
Macedonia

100/05, 19/07, 103/08,6/10, 145/10, 97/11, 13/12) contains novel questions that arise in this respect.
provisions under which circumstances a concentration in the
media sector can be prohibited.
Electronic communication: Pursuant to the Law on 2.3 Are joint ventures subject to merger control?
Electronic Communication (Official Gazette of RM, nos.
13/05, 14/07, 55/07, 98/08, 83/10, 13/12, 59/12), The establishment of a joint venture that will perform on a lasting
concentration involving an operator with the significant basis all the functions of an autonomous economic entity (i.e. full
market power requires the prior approval of the competent function joint ventures) is subject to merger control. However, if
authority. the establishment of a joint venture purports to coordinate the
Concessions: Although the Law on Concession and Other market activities between its mother undertakings or between a
Types of Public Private Partnerships (Official Gazette of mother undertaking and the joint venture, the joint venture is not
RM, nos. 7/08, 139/08, 64/09, 52/10) does not contain
deemed a concentration, but instead falls within the ambit of the
specific merger control rules, nor change of control clauses
cartel prohibition.
in the concession agreements require prior approval of the
Government of Macedonia for the change of control in
concession companies Article 8 of the Law on 2.4 What are the jurisdictional thresholds for application of
Concessions. merger control?

2 Transactions Caught by Merger Control A merger notification is compulsory whenever one of the following
thresholds is met:
Legislation
the combined worldwide annual turnover of the undertakings
concerned in the preceding financial year exceeds EUR 10
2.1 Which types of transaction are caught in particular, how million in denar counter-value pursuant to the exchange rate
is the concept of control defined? applicable on the date of completion of the annual accounts,
whereby at least one of the undertakings is registered in the
The following types of concentrations are caught: territory of Macedonia;
a merger of two or more previously independent the aggregate national annual turnover of all the participants
undertakings or parts thereof; to the concentration in the year preceding the concentration
is at least EUR 2.5 million in denar counter-value pursuant to
any acquisition of direct or indirect control over the whole or
the exchange rate applicable on the date of completion of the
part of another undertaking or undertakings by acquisition of
annual accounts; and/or
securities or assets, by means of agreement or by any other
means stipulated by the law, by (i) one or more persons the market share of the one of the undertakings is over 40%
already controlling at least one undertaking, or by (ii) one or the joint market share exceeds 60%.
(sole control) or more undertakings (joint control); or The LPC defines participants to the concentration as (i) the merging
the establishment of a full function joint venture. undertakings in case of a merger of two or more previously
An undertaking is deemed to have control over another undertaking independent undertakings or parts thereof, or (ii) the persons or
if it has the possibility to exercise decisive influence on the latters undertakings acquiring control of the whole or parts of one or more
activities. Such influence can be based on rights, agreements or any other undertakings, as well as the undertakings or parts thereof over
other legal or factual basis and, especially, on the ownership right which control is acquired.
or the right to use (parts of) the assets of an undertaking, on Against the background of the above, no physical presence in
contractual authorisation or any other basis which creates the Macedonia is required for a filing obligation to arise as long as the
possibility to influence the structure, activity and decision-making thresholds are met through cross-border sales. However, takeover
of an undertaking. The LPC defines the controlling bids for joint stock companies with registered seat in Macedonia
undertaking/person as an undertaking/person that directly or require notification to the Commission irrespective of whether any
indirectly holds rights or is entitled to exercise the rights on a of the thresholds mentioned above are met.
contractual basis. Turnover means all revenues derived from the sale of products or
the provision of services in the ordinary course of business of an
2.2 Can the acquisition of a minority shareholding amount to undertaking after deduction of (i) excise duties, and (ii) intra-group
a merger? sales. The turnover of an undertaking concerned comprises the total
turnover of the group it belongs to, i.e. its subsidiaries, mother
Yes, if by acquisition of a minority shareholding, an undertaking undertakings, its mother undertakings subsidiaries and any other
acquires sole or joint control over another undertaking, this shall undertakings controlled in the sense of the Macedonian Companies
amount to a concentration which has to be notified. As stated Act. The turnover generated in conducting regular business activity
above, an undertaking is deemed to have control over another shall be taken into account when calculating the turnover of banks
undertaking if it has the possibility to exercise decisive influence on and other financial institutions. Regarding insurance companies,
the latters activities. The question whether one exercises control the turnover thresholds shall be calculated on the basis of the value
over an undertaking has to be assessed on a case-by-case basis. of gross premiums.
The LPC and the existing by-laws do not provide details on what is
sufficient to exercise decisive influence. The LPC only provides

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2.5 Does merger control apply in the absence of a countries, there is no filing deadline in Macedonia. On the other
substantive overlap? hand, notifications can be submitted as soon as the parties are able
to demonstrate their good-faith intention to enter into a transaction
Yes, Macedonian merger control rules apply also in the absence of agreement or, in the case of a public bid, when the intention of
a substantive overlap. Provided that the jurisdictional thresholds participation has been publicly stated, if such an agreement or
are exceeded, a concentration has to be notified even where the public bid would result in a concentration.

Macedonia
merger does not raise any competition concerns.
3.2 Please describe any exceptions where, even though the
2.6 In what circumstances is it likely that transactions jurisdictional thresholds are met, clearance is not
between parties outside Macedonia (foreign to foreign required.
transactions) would be caught by your merger control
legislation? The following exceptions from the requirement of obtaining merger
control clearance apply. A concentration does not have to be
Foreign-to-foreign mergers are subject to Macedonian merger notified if:
control rules, provided that the jurisdictional thresholds are met. a bank, an insurance company or another financial institution
The Commission has not yet adopted any guidelines which would whose business activity includes the trading with securities,
exempt certain foreign-to-foreign mergers and has not expressly temporarily acquires shares for the subsequent resale within
recognised the domestic effect doctrine, although there is a place a period of 12 months (with a possible extension if justified)
holder in the LPC providing that the LPC applies to all forms of provided that during this period, the shareholders rights are
prevention, restriction or distortion of competition that produce not used to influence the market conduct of the respective
effects on the territory of the Republic of Macedonia even when undertaking;
they result from acts or actions carried out or undertaken outside of a person acting as a bankruptcy receiver acquirers control
the territory of the Republic of Macedonia. over an undertaking; or
an investment fund acquires shares provided that its
shareholders rights are used only for the maintaining of its
2.7 Please describe any mechanisms whereby the operation investment and not to influence the business conduct of the
of the jurisdictional thresholds may be overridden by other respective undertaking on the market.
provisions.
We note that direct or indirect acquisitions of certain shareholdings
in banks, insurance companies, media or broadcasting sectors in
Please note that direct or indirect acquisitions of certain
principle require approvals of the competent regulatory authorities
shareholdings in banks, insurance companies, media or
irrespective of the notification to the Commission and the aggregate
broadcasting sectors, in principle, require approvals of the
turnovers of the undertakings concerned.
competent regulatory authorities irrespective of the aggregate
turnovers of the undertakings concerned. We further note that a We further note also that a takeover bid for a joint stock company
takeover bid for a Macedonian joint stock company pursuant to the registered in Macedonia pursuant to the takeover act has to be
takeovers act has to be notified even if the thresholds are not met. notified to the Commission even if the thresholds are not met.

2.8 Where a merger takes place in stages, what principles 3.3 Where a merger technically requires notification and
are applied in order to identify whether the various stages clearance, what are the risks of not filing? Are there any
constitute a single transaction or a series of transactions? formal sanctions?

If the acquisition of the target company is performed in several Undertakings concerned are under an obligation to notify the
stages the notification obligation is triggered at the moment of Commission of a transaction and to suspend the implementation of
acquisition of the share that allows the acquirer to exercise decisive the transaction until clearance is issued or until the waiting period
influence over the targets business activities, i.e. when an acquirer of 25 to 35 days (phase I) or 90 days (phase II) has expired.
has established the control over the target. Prior, as well as Implementation of a concentration without prior clearance may lead
subsequent acquisitions of shares in the same target, do not trigger to fines of up to 10% of the total annual turnover realised by the
(additional) filing obligation(s). undertakings concerned in the last business year. However, the
Commission may also impose fines on the responsible person
Two or more concentrations between identical undertakings
within the undertakings concerned ranging from EUR 2,000 to
realised in the period of less than two years shall be deemed as one
EUR 10,000. The Commission is further entitled to prohibit an
concentration that occurred on the date of the last of such
undertaking or a responsible person within an undertaking to
consecutive concentrations.
perform certain business activities. In addition, the transaction
agreement relating to the acquisition of interest in the target
3 Notification and its Impact on the Transaction company (and all measures bringing about the transaction) may be
Timetable declared null and void. The Commission may impose any measure
it deems necessary to restore effective competition including the
unwinding of a transaction or the obligation on the parties to divest
3.1 Where the jurisdictional thresholds are met, is notification
assets.
compulsory and is there a deadline for notification?

Notification is compulsory whenever the jurisdictional thresholds 3.4 Is it possible to carve out local completion of a merger to
are met. A concentration has to be notified prior to the avoid delaying global completion?
implementation of the transaction and following: (i) the conclusion
of an agreement; (ii) announcing the public bid; or (iii) the Hold separate agreements have not yet been tested with the
acquisition of control. However, in contrast to neighbouring Commission. It is likely that the Commission will initially take a

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conservative approach to such carve-out mechanisms. One of the concerned in the last business year. The Commission is further
carve-out structures that might be permitted under the Macedonian entitled to prohibit an undertaking or a responsible person within an
competition rules is to make use of the financial institution undertaking to perform certain business activities. In addition, the
exception (see question 3.2 above). transaction agreement relating to the acquisition of interest in the
target company (and all measures bringing about the transaction)
may be declared null and void. The Commission may impose any
Macedonia

3.5 At what stage in the transaction timetable can the


notification be filed?
measure it deems necessary to restore effective competition
including the unwinding of a transaction or the obligation on the
parties to divest assets.
A concentration has to be notified prior to the implementation of the
transaction and following: (i) the conclusion of an agreement; (ii) However, the suspension obligation shall not prevent the
announcing the public bid; or (iii) the acquisition of control interest. implementation of a public bid for purchase of securities or series
However, the LPC fails to provide filing deadlines. An undertaking of transactions in securities, including those convertible into other
may notify the Commission of the concentration based on a serious securities admitted to trading on a market in accordance with the
intent to conclude an agreement, or if it has made public its law, if: (i) the concentration has been notified to the Commission
intention to participate in the bidding procedure. without delay; (ii) the acquirer of securities does not exercise the
voting rights attached to the securities in question, or does so only
to the extent which is necessary to maintain the full value of its
3.6 What is the timeframe for scrutiny of the merger by the
investment; and (iii) based on a procedural order for exemption
merger authority? What are the main stages in the
from the obligation of suspension.
regulatory process? Can the timeframe be suspended by
the authority? When deciding upon a reasoned request for exemption from the
suspension obligation, which is an independent tool allowing for
The Commission shall adopt one of the following decisions within exemption from the suspension obligation in general, the
25 working days following the submission of a complete Commission shall, inter alia, take into account the effects of the
notification: (i) determine that the concentration does not fall within suspension of the concentration on one or more undertakings
the ambit of the LPC; (ii) determine that the concentration does not concerned or on third parties, as well as possible adverse effects on
significantly prevent, restrict or distort competition and therefore it competition caused by the concentration. This exemption may be
is in compliance with the LPC; or (iii) determine that an in-depth subject to conditions and obligations in order to ensure effective
assessment of the concentration (in so-called investigation competition. The exemption may be applied for and granted at any
proceedings) is opened as the concentration may significantly time. LPC was amended at the end of 2011. This Amendment
prevent, restrict or distort competition. The Commission may clear relates to the procedural aspects of deciding on the request for an
a transaction in fast-track proceedings also subject to conditions. exemption of the suspension obligation. The amendment specifies,
To this end, the 25-working day deadline can be extended by 10 in detail, the entire procedure for processing this request, including
working days. the exact deadlines for decision-making and introduces control of
Within 90 working days from the day of initiating proceedings, the other state bodies over the efficiency of the Commission.
Commission is obliged to either clear (conditionally or
unconditionally) or prohibit the transaction. This deadline can be 3.8 Where notification is required, is there a prescribed
extended to 105 working days. format?
All above-mentioned deadlines can be extended for up to additional
20 working days by the Commission in agreement with the Besides the LPC, the format and substance of a merger notification
participants in the concentration. is governed by the Ordinance on the content of the merger
notification adopted in 2012. The most important change this
However, the statutory deadlines shall not be binding on the
ordinance has introduced is that it splits the relevant data of a
Commission when the Commission, as a result of circumstances for
merger notification into two categories: (i) one set of data/docs
which one of the participants is responsible, has to (i) request ex
must be provided in the filing; while (ii) the second one may, but
officio data about participants economic-financial standing, their
does not necessarily have to be provided. Further, the new
business relations, the data regarding their statutes and decisions,
ordinance significantly broadens the scope of the notification by
and the number and identity of the persons affected by such
including new categories.
decisions, as well as other necessary data, or (ii) to conduct
inspections and collect evidence on site. The notification and all appendices shall be submitted in
Macedonian or with a translation by a sworn court interpreter. In
If the Commission did not make any decision within the specified
general, the Commission proved to be flexible in practice regarding
deadlines, the concentration shall be considered to be compliant
the formalities in filing the supplement documentation to the
with the provisions of the LPC.
merger notification.

3.7 Is there any prohibition on completing the transaction


3.9 Is there a short form or accelerated procedure for any
before clearance is received or any compulsory waiting
types of mergers? Are there any informal ways in which
period has ended? What are the risks in completing
the clearance timetable can be speeded up?
before clearance is received?

Undertakings concerned are under an obligation to notify the No. There is only one filing form and other than clearance in
Commission of a transaction and to suspend the implementation of phase I (or so-called fast track proceedings) no accelerated
the transaction until clearance is issued or until the waiting period procedure is attainable or usually informally provided.
of (phase I) or (phase II) has expired. Implementation of a In 2012, the Commission issued Guidelines for determining the
concentration without prior clearance may lead to fines of up to cases in which the Commission may issue summary (phase I)
10% of the total annual turnover realised by the undertakings decisions. The examples of cases when clearance can be afforded

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in phase I include transactions such as: acquisition of the joint 4 Substantive Assessment of the Merger and
control over a company generating less than 1 million in Outcome of the Process
Macedonia; no overlaps in the product market; joint market shares
less than 15%; joint market shares less than 25% in
upstream/downstream market; and one party acquires individual 4.1 What is the substantive test against which a merger will
be assessed?

Macedonia
control over a company which it used to jointly control. For these
cases the Commission would not extensively scrutinise the
The Commission shall analyse concentrations against the SIEC test,
transaction and the clearance is expected within the fast track
i.e. whether the concentration will significantly impede effective
proceedings.
competition in Macedonia, particularly by creating or strengthening
a market dominant position. For this assessment, the following
3.10 Who is responsible for making the notification and are factors shall be taken into account:
there any filing fees?
structure of the relevant market;
existing and potential competitors;
The amount of the clearance and notification fees are regulated by
the Law on Administrative Fees (Official Gazette of RM nos. 25/96, supplies and possibility of market entries;
10/09, 21/01, 4/03, 30/04, 13/04, 7/05, 6/06, 24/07, 16/08 ,15/08,) costs, risks, technological, economic and legal conditions
which provides for a filing fee of EUR 100 and a clearance fee of associated with market entry and exits;
cca. EUR 500. Evidence of the paid filing fee shall be submitted effects that the concentration may have on competitors;
together with the notification. The clearance fee shall be paid market position of undertakings involved in the
within 8 days following the adoption of the clearance decision. concentration and their economic and financial power;
Responsibility for filing: benefits of the undertaking concerned from the transaction
under consideration;
In case of merger of undertakings or parts of undertakings:
the undertakings being participants in the merger. possible changes in the behaviour of the undertakings
concerned prompted by the notified concentration; and
In case of purchase of securities or property: the person
acquiring majority shares or parts or majority voting rights. benefits for consumers caused by the transaction (decrease in
prices of goods and/or services, increase of the efficiency of
In case of acquiring control or decisive influence over
the distribution, production specialisation, and any other
undertakings on any other manner: the person acquiring
benefits arising from the concentration).
control or decisive influence.
In case of acquiring control or decisive influence on the basis
of a public bid: the bidder. 4.2 To what extent are efficiency considerations taken into
In case of creation of a joint venture: either all the account?
participants in the process of creation of joint venture
submitting a joint notification or the participant authorised The Ordinance on the content of the merger notification requires the
by the other participants as their joint representative. applicant to elaborate on the efficiency considerations of the
notified transaction. Namely, the analysis of: the expected
3.11 What impact, if any, do rules governing a public offer for a
consumer benefits (prices reduction, increase of quality, innovation,
listed business have on the merger control clearance etc.); planned research and investment into the development; and
process in such cases? strategic and economic reasons for the concentration, are all
mandatory parts of the merger notification. The analysis of these
The LPC designates different treatment of concentrations of listed efficiency considerations is usually taken into account by the
business in two respects. Firstly, takeover bids for joint stock Commission when assessing and clearing a proposed concentration.
companies with registered seat in Macedonia require notification to Moreover, these issues are in some cases elaborated in the
the Commission irrespective of whether any of the thresholds are Commissions decisions.
met.
Secondly, the LCP specifies that suspension obligation shall not 4.3 Are non-competition issues taken into account in
prevent the implementation of a public bid for purchase of assessing the merger?
securities or series of transactions in securities, including those
convertible into other securities admitted to trading on a market in The primary task of the Commission is to assess whether the
accordance with the law, if: (i) the concentration has been notified proposed concentration significantly prevents, restricts or distorts
to the Commission without delay; (ii) the acquirer of securities does competition, and whether it is therefore in compliance with the
not exercise the voting rights attached to the securities in question, LPC. Consequently, the Commission will, as a rule, consider and
or does so only to the extent which is necessary to maintain the full elaborate solely competition issues in its decision making process.
value of its investment; and (iii) based on a procedural order for
exemption from the obligation of suspension. 4.4 What is the scope for the involvement of third parties (or
Finally, as a general rule, a concentration has to be notified prior to complainants) in the regulatory scrutiny process?
the implementation of the transaction and following the
announcement the public bid. Decisions rendered by the Commission and rulings of the courts
shall be published in the Official Gazette of the Republic of
Macedonia and on the web page of the Commission. The published
3.12 Will the notification be published?
text shall include the names of the parties and the main content of
the decision. According to Article 67 LPC, the Commission is also
Summary of the notification is published on the Commissions
obliged to publish certain information on all notified filings on its
website. For more information, please see questions 4.4 and 4.6.
website. Such information shall include the names of the parties,

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the country of origin, the form of concentration and the relevant 5.2 Where competition problems are identified, is it possible
market. These publicity requirements allow third parties to be to negotiate remedies which are acceptable to the
informed on the development of the proceedings, and to submit parties?
their comments, opinions and remarks regarding the concentration
under consideration. In 2009, the Commission adopted Guidelines on remedies
acceptable to the Commission under Chapter III of the 2005 LPC on
Macedonia

In case damage is caused by any action prohibited by the provisions


the Control of Concentrations (Guidelines on Remedies). Please
of the LPC, the person that suffered the damage may lodge a
note that the Guidelines on Remedies were adopted before the new
damage claim in accordance with the law.
LPC entered into force. Pursuant to the LPCs transitional
provisions, existing by-laws shall remain in force until they are
4.5 What information gathering powers does the regulator replaced by new ones.
enjoy in relation to the scrutiny of a merger?
When competition concerns are identified, the Commission informs
the parties that it intends to prohibit the merger, since it will
The Commission has various investigative powers. The
significantly prevent, restrict or distort the competition. The parties
Commission is entitled to: request certain documentation or
are then expected to propose remedies to the Commission in order
statements from the parties; request witnesses and experts; issue
to overcome those problems. Should the Commission find that
interim measures; and hold hearings. In order to vest the
proposed remedies do not obviously eliminate identified problems,
Commission with the appropriate tools for public enforcement of
it will deliver a Conclusion for the initiation of a procedure
competition rules, the LPC sets out explicitly that the Commission
(Conclusion).
may conduct inspections of an undertakings premises, review,
seize, copy or scan business records, seal all premises and Within 65 working days from the day of receipt of the Conclusion,
documentation (for a period not longer than 7 days) and take the parties have to submit a proposal of remedies to the
statements from any responsible persons, including employees. Commission. Such remedies could include divestment of business,
elimination of connections with their competitors, facilitating
The Commission shall collect all necessary data by passing a
access to a market, amendments of long-term exclusive agreements,
decision against which an appeal shall not be allowed. The person
alternative divestment commitments, etc. The Commission shall
requested to submit data shall be obliged to submit the requested
analyse and negotiate proposed remedies, but it will not propose
data and the data must be correct, complete and true and must be
remedies itself. Parties may consult the Commission and third
submitted within the specified time limit.
parties, and they may submit additional proposals referring to the
remedies and their implementation within those 65 days.
4.6 During the regulatory process, what provision is there for If at the end of the procedure, the Commission finds that parties did
the protection of commercially sensitive information? not propose valid remedies which will eliminate competition
concerns, the Commission will prohibit the concentration. Should
Article 7 of the Implementing Ordinance provides for the the Commission find that proposed remedies are adequate, it will
possibility of an applicant requesting that certain information issue a conditional clearance.
submitted to the Commission is treated as confidential. Such
information cannot be disclosed or published. The LPC imposes an
obligation on the Commissions personnel to keep all data 5.3 To what extent have remedies been imposed in foreign-
determined as a business or professional secret by the law or to-foreign mergers?
marked as such by the parties, as confidential. The personnel are
bound by this duty to keep confidential also for five years upon the To the best of our knowledge, the practice of the Commission has
termination of their working relation with the Commission. not, as of yet, developed in this regard, and so far, there has not been
Regarding the information which is claimed by the parties to be any imposition of the remedies in foreign-to-foreign mergers.
confidential, the Commission shall have the right to accept or refuse
such claims. It will accept the claim if such data has economic or 5.4 At what stage in the process can the negotiation of
market value and their discovery or use may lead to economic remedies be commenced? Please describe any relevant
disadvantages of the undertakings concerned. The relevant procedural steps and deadlines.
procedure is governed by the Guidelines on the manner of preparing
of a non-confidential version of a Commission decision. Please see question 5.2 above.

5 The End of the Process: Remedies, Appeals 5.5 If a divestment remedy is required, does the merger
and Enforcement authority have a standard approach to the terms and
conditions to be applied to the divestment?

5.1 How does the regulatory process end? If participants to the concentration choose to propose divestment of
business, the following terms and conditions set by the Guidelines
The Commission may: on Remedies apply: divested business has to be described in detail
clear the concentration, either unconditionally or subject to specifying all tangible and intangible assets: relevant personnel;
restrictions and/or obligations; customer lists; licences; permissions; agreements; and loans, etc. It
prohibit the merger; has to be a viable and competitive entity. The Commission prefers
decide that the transaction does not constitute a notifiable the divestment of an existing business entity or unit that has already
event pursuant to the LPC; or demonstrated its ability to compete in the relevant markets.
cease the procedure whenever the notification is withdrawn. Participants to the concentration should be prohibited from
regaining control on entire or part of the divested business for a
certain period of time (usually 10 years). In addition, divested

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business should be sold to an acceptable buyer, in particular, to the entitled to lodge an appeal: (i) the parties to the transaction; (ii) an
one who has enough financial resources, who is independent of the interested third party or public body if it can be the holder of any
participants to the concentration and whose purchase of divested right deriving from the decision; and (iii) the competent authority in
business shall not raise any other competition issues. case that the decision infringes the law.
In certain cases, the implementation of original divestment remedy

Macedonia
may be uncertain, because the sellers might not be unable to divest 5.10 What is the time limit for any appeal?
proposed business to an acceptable buyer within the foreseen
deadline. For that reason, the Commission accepts the proposal of Please see question 5.9.
alternative divestment remedies referred to as crown-jewels.
Crown jewels may be an upgrade on the original business or
another more attractive business, and its implementation must not 5.11 Is there a time limit for enforcement of merger control
legislation?
be uncertain and lengthy. It is important that the alternative
proposal is at least equal, if not better suited to restoring effective
competition as the original remedy. The limitation period for imposing a fine for a breach of the bar on
closing is five years, whereas the period is three years for notifying
the transaction based on false and/or inaccurate data. The limitation
5.6 Can the parties complete the merger before the remedies period for enforcing a fine decision is two years following the date
have been complied with? that the decision becomes legally binding.

Generally, parties may complete the merger before a remedy has


been complied with, however, this will depend on the nature of the 6 Miscellaneous
remedy and negotiations conducted with the Commission. Similar
to the European Commission, the Macedonian Commission may, 6.1 To what extent does the merger authority in Macedonia
however, request that the parties shall not implement the merger liaise with those in other jurisdictions?
before they have complied with the divestment. An example for
this would be an upfront buyer requirement, where the parties The Commission is a member of the International Competition
have to present to the Commission an agreement with a purchaser Network and it participates in the OECD Competition Committee.
for the divested business before they implement the transaction. The Commission cooperates with the Competition Directorate
General of the EU Commission, as well as with foreign competition
5.7 How are any negotiated remedies enforced? authorities which include the German Bundeskartellamt and
competition authorities in Bulgaria, Croatia, Bosnia and
The parties are obliged to act in accordance with the Commissions Herzegovina and Albania.
decision. Pursuant to Article 19 of the LPC, the Commission may The Commission has signed a Memorandum of Understanding with
approve the transaction conditionally. A clearance decision shall be the following Macedonian authorities in 2007: the Energy
revoked and the transaction assessed anew if parties fail to comply Regulatory Commission; the Agency for Electronic
with remedies. In addition, the Commission may impose fines of Communications; the Public Procurement Authority; and the
up to 10% of the annual turnover of the undertakings concerned and Broadcasting Council. The memorandums address the cooperation
determine interim measures if the parties do not observe the between the Commission and these authorities in respect of
remedies imposed on them. protecting, promoting and developing competition on the
Macedonian market.
5.8 Will a clearance decision cover ancillary restrictions?
6.2 Are there any proposals for reform of the merger control
The new LPC expressly provides that a decision whereby the regime in Macedonia?
Commission determines that a particular concentration is in
compliance with the provisions of the LPC shall also be considered In 2012, the merger control regime has been somewhat reformed
to cover the restrictions which are directly related and indispensable with the interdiction of new regulation and by-laws clarifying
for the implementation of the concentration. certain aspects of the clearance process. Namely, the LPC was
recently changed by an amendment issued at the end of 2011.
Further, in March 2012, the Macedonian Government adopted a
5.9 Can a decision on merger clearance be appealed?
new Ordinance on the content of the merger notification. Also, new
Guidelines for determining the cases in which when assessing
Merger control decisions of the Commission can be challenged
concentrations the Commission for the Protection of Competition
before the Administrative Court of Macedonia. The complaint has
may issue summary decisions were issued in June 2012.
to be submitted within a period of 30 days from the day of receiving
the decision. The complaint does not hold up the execution of the
decisions. The duration of administrative proceeding is uncertain. 6.3 Please identify the date as at which your answers are up
to date
The Competition Act does not set out the persons who can lodge the
claim against the final decision of the Commission. According to
6 September 2012.
the Law on Administrative Disputes, the following persons are

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Srana Petronijevi Olga ipka


Moravevi Vojnovi Zdravkovi Moravevi Vojnovi Zdravkovi
in cooperation with Schoenherr in cooperation with Schoenherr
Francuska 27 Francuska 27
11000 Belgrade 11000 Belgrade
Macedonia

Serbia Serbia

Tel: +381 11 320 2600 Tel: +381 11 320 2600


Fax: +381 11 320 2610 Fax: +381 11 320 2610
Email: s.petronijevic@schoenherr.rs Email: o.sipka@schoenherr.rs
URL: www.schoenherr.rs; www.schoenherr.eu URL: www.schoenherr.rs; www.schoenherr.eu

Srana Petronijevi is a partner (Serbia) with Moravevi Olga ipka is an attorney at law with Moravevi Vojnovi
Vojnovi Zdravkovi in cooperation with Schoenherr where she Zdravkovi in cooperation with Schoenherr since 2008 and is a
heads up the firms competition and white-collar crime practice. member of the firms EU & Competition practice.
She has been involved in numerous high-profile merger control Olga has acted for a number of foreign investors advising them on
proceedings before the Serbian competition authorities and their various projects and competition matters in several
coordinated global merger control filings, particularly in the former jurisdictions (Serbia, Montenegro, Bosnia and Herzegovina,
republics of Yugoslavia. In addition, she also advises clients on Macedonia, Albania and Kosovo). She has extensive experience
all aspects of antitrust law, including infringement proceedings in representing clients before the national competition authorities
with respect to alleged anticompetitive practices. She has and courts both in merger control and antitrust proceedings.
designed a number of compliance programmes for our larger Olgas experience includes a wide range of industries, including
corporate clients, tailor-made to their individual needs. Another of insurance, banking, automotive, consumer goods, industrial
Sranas key tasks is advising clients on all aspects of criminal products, pharmaceuticals, telecommunications, media,
compliance and white-collar crime matters in Serbia, while also technology and IT services. She rejoined Schoenherrs team in
providing full coverage in Bosnia and Herzegovina, Macedonia, September 2010 after a two year period during which she finished
Montenegro and Kosovo via specialised country desks. Sranas her masters degree at NYU and worked as a consultant for the
client base is wide and varied and covers the World Bank.
telecommunications, energy, insurance, banking, construction,
real estate, road development, pharmaceutical, media and IT
industries. Srana holds a LL.M. in International Business Law.

Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr has been active on the Serbian market since 2002. The firms
practice is client-orientated, with specialised practice groups that provide industry-focused services to meet the demand of a
competitive, developing and rapidly changing marketplace.
In addition to the Serbian practice, Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr is frequently engaged in
Bosnia and Herzegovina, Montenegro, Macedonia and Kosovo. The firms client list includes leading companies, financial
institutions, organisations and governments. The Belgrade office, via its specialised country desks, acts as a hub for Bosnia and
Herzegovina, Macedonia, Montenegro and Kosovo.
Schoenherr is a leading corporate law firm in Central and Eastern Europe, operating through offices in Belgrade, Bratislava,
Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna, Warsaw and Zagreb. Operating in a
rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of experienced lawyers and young
talent. Our comprehensive coverage of the region means we can offer solutions that perfectly fit the given industry, jurisdiction
and company.

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Chapter 35

Montenegro Srana Petronijevi

Moravevi Vojnovi Zdravkovi


Danijel Stevanovi
in cooperation with Schoenherr

1 Relevant Authorities and Legislation contents and the form of merger notifications respectively
(hereinafter jointly Guidelines). However, the Guidelines are to
be replaced with new ones (in the first half of 2013) pursuant to the
1.1 Who is/are the relevant merger authority(ies)?
Competition Act.

The authority with competence over merger control in Montenegro Fines for competition law violations, including those pertaining to
is the Agency for the Protection of Competition [Agencija za zatitu merger control, are imposed in misdemeanour proceedings by a
konkurencije] (Agency), established by the 2012 Law on the court, on the initiative of the Agency. Misdemeanour proceedings
Protection of Competition. Although formally newly established in are regulated by the Law on Misdemeanours [Zakon o prekrajima]
the form of a public agency, it is a successor of the Directorate for (Official Gazette of the RMN, no. 1/2011, 6/2011, 39/2011).
the Protection of Competition, functional as of 2008. The website
of the Agency is accessible at www.uzzk.gov.me. 1.3 Is there any other relevant legislation for foreign mergers?
The Agency, competent to enforce competition law in its totality
and not just merger control rules, is an independent governmental There are no specific rules regarding foreign mergers. General
agency responsible for its work to the Government of Montenegro, merger control rules apply also to foreign mergers provided that the
which also elects the Director of the Agency. respective jurisdictional thresholds are met (please see questions
Merger control decisions can be challenged before the 2.4 and 2.6 below).
Administrative Court of Montenegro [Upravni sud]
(Administrative Court). 1.4 Is there any other relevant legislation for mergers in
particular sectors?

1.2 What is the merger legislation?


The Competition Act applies to mergers irrespective of the sectors
they pertain to. However, certain sector-specific regulations apply
Merger control rules are regulated by the recently adopted Law on the
to mergers in certain sectors:
Protection of Competition [Zakon o zatiti konkurencije] (Official
Gazette of the RMN, no. 44/2012) (Competition Act), which came Banking: The acquisition of a qualified shareholding (i.e.
10%, 20%, 33%, or 50%) in Montenegrin banks are subject
into force on 9 October 2012. The Competition Act supersedes the
to prior approval by the Central Bank of Montenegro
2005 Law on the Protection of Competition (Official Gazette of the pursuant to the Banks Act (Official Gazette of the RMN, no.
RMN, no. 69/2005 and 37/07), which regulated merger control rules 17/08 and 44/10, and 40/11).
until the entry into force of the Competition Act.
Insurance: Acquisitions of a qualified shareholding (i.e.
The Competition Act regulates both the substantive and procedural 10%, 20%, 33%, 50% or any acquisition of shares that
aspects of merger control. To the extent that some procedural rules confers factual control upon the acquirer) in a Montenegrin
are not regulated by the Competition Act, the Law on General insurance company is subject to prior approval by the
Administrative Proceedings [Zakon o optem upravnom postupku] regulatory insurance body of Montenegro pursuant to the
(Official Gazette of the RMN, no. 60/03, 32/11) applies Insurance Act (Official Gazette of the RMN, nos. 78/06,
19/07, 53/09, 73/10 and 40/11).
subsidiarily.
Media: The Media Act (Official Gazette of the RMN, nos.
Certain aspects of merger control, namely relevant market 51/02, 62/02 and 46/10) prohibits all transactions which
definition and contents of merger notifications, are further regulated result in the creation of a monopoly in media sectors in
by the following bylaws: general, while the Electronic Media Act (Official Gazette of
the Guidelines on Criteria for Determining the Relevant Market the RMN, no. 46/10, 40/11 and 53/11) regulates
[Uputstvo o kriterijumima za utvrivanje relevantnog trzita] concentrations in the (electronic) media sector.
(Official Gazette of RMN, no. 77/2005); and Telecommunications: The Electronic Communications Act
the Guidelines on Form and Content of a Request for (Official Gazette of the RMN, no. 50/08, 53/09, 70/09,
Issuance of Approval for Implementation of a Concentration 40/10, 49/10 and 32/11) provides for the establishment of the
[Uputstvo o obliku i sadrini zahtjeva za izdavanje odobrenja Agency for Electric Communications and Postal Activities
za sprovoenje koncetracije] (Official Gazette of the RMN, whose competences will be the monitoring of the market,
no. 77/2005), cooperation with the Agency and determining whether an
operator has a significant market power, as well as imposing
which regulate how relevant markets are to be defined, and the

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measures aimed to mitigate or prevent negative effects on a of the following thresholds is met:
relevant market. the aggregate local turnover of at least two parties to the
Concessions: The Concessions Act (Official Gazette of the concentration exceeds EUR 5 million; or
RMN, no. 8/09) explicitly provides that the change of control the aggregate worldwide turnover of the parties to the
in concession companies is subject to approval by the concentration exceeds EUR 20 million, provided that at least
Montenegro

concession grantor (i.e. the Government, the Parliament or one of the parties achieved a turnover of EUR 1 million
the Municipality). The Concession Commission, established within the territory of Montenegro.
pursuant to The Concession Act, keeps the register of all
changes regarding the concession contracts. Upon learning that a concentration has been performed, the Agency
can order the participants to the concentration to notify the
Energy: The Energy Act (Official Gazette of the RMN, no.
28/10) establishes the Administrative Agency for Energy concentration if their joint market share in the relevant market in
which, inter alia, may perform all activities regarding the Montenegro is at least 60%. The burden of proof that the 60%
licensing of the companies involved in the energy sector as market share threshold is met lies with the Agency.
well as the monitoring and regulating of the energy market. Turnovers are calculated by taking into account all revenues
derived from sale of products or provision of services in the year
preceding the year in which the concentrations is notified, after the
2 Transactions Caught by Merger Control
deduction of exercise duties. The turnover of an undertaking
Legislation
assumes the total turnover of the group it belongs to, save for intra-
group sales which are not taken into account. For the calculation of
2.1 Which types of transaction are caught in particular, how local (national) turnover, in addition to the foregoing, the value of
is the concept of control defined? exports has to be deducted. If control is acquired over part of an
undertaking, only the turnover attributable to that part is to be taken
Pursuant to the Competition Act, a concentration arises where: into account. In case of joint ventures, total group turnovers of both
two or more independent undertakings or parts thereof merge; joint venture partners are to be taken into account.
one or more undertakings or natural persons controlling at According to currently developed practice, local registered
least one undertaking acquire (directly or indirectly) control presence is not required as long as the thresholds are reached
over another undertaking or part thereof; and through sales conducted in the territory of Montenegro.
at least two independent undertakings establish a new Special rules for the calculation of turnover apply to banks, credit
undertaking on the market or when they acquire joint control
institutions, financial entities and insurance companies. As regards
over a existing undertaking, which operates on a lasting basis
and has all the functions of an independent undertaking (i.e. banks, credit institutions and financial companies, the relevant
joint ventures). turnover shall consist of the income from interest charged, net
profits from financial transactions, commissions charged, income
Control is the possibility to exercise (solely or jointly) decisive
from securities held by these organisations and of income from
influence over an undertaking, on a de jure or de facto basis. This
other business activities. As regards insurance companies, the
will in particular be so in the case of a majority shareholding or
turnover is calculated with respect to the value of written gross
voting rights, or the possibility to appoint the majority of board
premiums.
members or representatives of an undertaking.

2.5 Does merger control apply in the absence of a


2.2 Can the acquisition of a minority shareholding amount to
substantive overlap?
a merger?

Yes. The applicability of merger control rules does not require the
Yes, provided that the acquisition of a minority shareholding
existence of a substantive overlap. The only criterion for the
confers (sole or joint) de jure or de facto control over the target on
applicability of merger control rules is the fulfilment of one of the
the acquiring undertakings (see also question 2.1).
turnover thresholds outlined in question 2.4 above.

2.3 Are joint ventures subject to merger control?


2.6 In what circumstances is it likely that transactions
between parties outside Montenegro (foreign-to-foreign
Yes, joint ventures are subject to merger control. However, only transactions) would be caught by your merger control
certain joint ventures are subject to merger control, i.e. when two or legislation?
more independent undertakings establish a new undertaking, or
when they acquire joint control over an existing undertaking, which Any foreign-to-foreign merger is subject to merger control in
operates on a lasting basis and has all the functions of an Montenegro if the jurisdictional thresholds are met. A domestic
independent undertaking (i.e. full-function joint ventures) and effects doctrine has not yet been adopted by the Agency, although
which does not purport to coordinate the market activities of the Article 2 of the Competition Act provides that the Competition Act
independent undertakings acquiring control. applies to acts which have or might have effects on competition in
However, if the establishment of a joint venture purports to the territory of Montenegro. However, the decisional practice so far
coordinate the market activities of two or more independent is not supporting the view that a transaction, besides meeting the
undertakings, the joint venture is not deemed a concentration but jurisdictional thresholds, also needs to have an effect on
shall be assessed under rules regulating restrictive agreements. competition in Montenegro in order to trigger a filing obligation.
Hence, foreign-to-foreign transactions that meet the jurisdictional
thresholds of the Competition Act trigger a filing obligation in
2.4 What are the jurisdictional thresholds for application of
Montenegro.
merger control?

Under the Competition Act a transaction has to be notified if either

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2.7 Please describe any mechanisms whereby the operation the capacity of a bankruptcy or liquidation receiver [steajni
of the jurisdictional thresholds may be overridden by other ili likvidacioni upravnik]; and
provisions. when a joint venture has for its aim to coordinate the market
activities between the two or more undertakings that retain
There are no mechanisms which provide for the jurisdictional their independence (as it shall be assessed under rules

Montenegro
thresholds to be overridden. However, the applicability of the regulating restrictive agreements).
sector-specific regulation outlined in question 1.4 does not require
the turnover thresholds stipulated in the Competition Act to be met. 3.3 Where a merger technically requires notification and
Direct or indirect acquisitions of qualified shareholdings in certain clearance, what are the risks of not filing? Are there any
sectors in principle require approval of the competent regulator formal sanctions?
irrespective of the aggregate turnovers of the parties to the
concentration. However, if the jurisdictional thresholds are The Competition Act imposes fines in case the parties to the
exceeded, merger clearance is also required in addition to the transaction fail to file the merger notification within the fifteen-day
approval of the sector-specific regulator. time period. In such a case, the parties to the concentration may be
subject to fines in the range of EUR 4,000-40,000. The responsible
2.8 Where a merger takes place in stages, what principles persons within the undertaking in violation may be fined in the
are applied in order to identify whether the various stages range of EUR 1,000-4,000.
constitute a single transaction or a series of transactions? If an undertaking performs a concentration without prior clearance
of the Agency (in violation of the suspension obligation) or
In the event of staggered transactions, the obligation to notify is performs a prohibited concentration, it may be fined in the amount
triggered at the moment of the acquisition of the share that enables of 1-10% of the total annual turnover in the financial year preceding
the acquirer to exercise decisive influence over the target. Two or the violation. The responsible persons within the undertaking in
more transactions between identical undertakings performed within violation may be fined in the range of EUR 1,000-4,000.
a period of two years shall be deemed a single concentration.
In case a concentration is performed without clearance or contrary
to the conditions under which it is approved, the Agency may also
3 Notification and its Impact on the Transaction impose structural or behavioural measures, should performance of
Timetable such a concentration restrict, distort or prevent competition. These
measures may in particular include divestment of shares or
limitation/prohibition of use of voting rights.
3.1 Where the jurisdictional thresholds are met, is notification
compulsory and is there a deadline for notification?
3.4 Is it possible to carve out local completion of a merger to
Notification is compulsory when the thresholds set by the avoid delaying global completion?
Competition Act are met (please see question 2.4 above) save for
certain exceptions (please see question 3.2 below). In light of the fact that the Agency is very young and not sufficiently
experienced, we deem it unlikely that it is susceptible to hold-
A concentration has to be notified within fifteen days following any
separate solutions. The only possibly permissible carve-out
of the following acts, whichever occurs first: (i) the conclusion of
mechanism, in our opinion, is the temporary acquisition of shares
an agreement; (ii) announcement of a public bid or offer or closing
by banks and other financial institutions with the aim of re-selling
of the public offer; or (iii) the acquisition of control.
the acquired shareholding within the next 12 months (18 months in
However, the parties may notify a transaction to the Agency even case an additional 6-month extension is granted). Please also see
before one of the abovementioned events if they demonstrate their question 3.2 above.
serious intent to enter into an agreement, e.g. by signing a letter of
intent, publicising their intent to make an offer or by any other way
which precedes any of the triggering events mentioned. 3.5 At what stage in the transaction timetable can the
notification be filed?
Under the Competition Act, if control over the whole or part of one
or more undertakings is acquired by another undertaking, the Parties to a transaction may notify it to the Agency as soon as they
notification has to be submitted by the undertaking acquiring can demonstrate their serious intent to enter into an agreement, e.g.
control. In all other cases, the notification has to be submitted by signing a letter of intent, publicising their intent to make an offer
jointly by the undertakings concerned. or by any other way which precedes any of the triggering events
(please see question 3.1 above).
3.2 Please describe any exceptions where, even though the
jurisdictional thresholds are met, clearance is not
3.6 What is the timeframe for scrutiny of the merger by the
required.
merger authority? What are the main stages in the
regulatory process? Can the timeframe be suspended by
The following acquisitions of control shall not be deemed the authority?
concentrations:
when a banking or other financial institution temporarily Upon submission of a complete notification, the Agency is bound to
acquires shares for further resale to be performed within a deliver a decision approving the concentration unconditionally
period of 12 months (with a possible additional 6-month within 105 working days, or a decision approving the concentration
extension) and provided that during this period the subject to conditions within 125 working days. If the concentration
shareholders rights are not used to influence business
creates or strengthens a dominant market position and consequently
decisions of the respective undertaking towards its
competitors; prevents, restricts or distorts competition, the Agency shall prohibit
the concentration within 130 working days.
when control over an undertaking is acquired by a person in

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The Agency shall render a decision within 25 days if the notified In all other cases, the only way to speed up the clearance timetable
concentration does not meet the jurisdictional thresholds (please see is to supply the Agency with a notification that is as detailed as
question 2.4 above). possible, in accordance with relevant rules applicable to the
If the Agency does render a decision within the abovementioned contents of notifications (please see question 3.8 above).
deadlines, the transaction is deemed to be cleared. However, the
Montenegro

Agency proved to be efficient in practice as it renders merger 3.10 Who is responsible for making the notification and are
control clearance usually within a month and a half. there any filing fees?

3.7 Is there any prohibition on completing the transaction Under the Competition Act, if control over the whole or part of one
before clearance is received or any compulsory waiting or more undertakings is acquired by another undertaking, the
period has ended? What are the risks in completing notification has to be submitted by the undertaking acquiring
before clearance is received? control. In all other cases, the notification has to be submitted
jointly by the undertakings concerned.
Yes. The Competition Act expressly provides that the undertakings Until the Competition Act entered into force, there were no
involved in a concentration are obliged to suspend implementation filing/clearance fees. The Competition Act stipulates that the
of a concentration until the Agency clears the transaction or until Agency shall enact a tariff code. However, no such tariff code has
the compulsory waiting period has ended. yet been enacted.
If an undertaking performs a concentration without prior clearance
of the Agency (in violation of the suspension obligation), it may be 3.11 What impact, if any, do rules governing a public offer for a
fined in the amount of 1-10% of the total annual turnover in the listed business have on the merger control clearance
financial year preceding the violation. The responsible persons process in such cases?
within the undertaking in violation may be fined in the range of
EUR 1,000-4,000. Pursuant to the Competition Act, a concentration has to be notified
In case a concentration is performed without clearance or contrary 15 days from an announcement of a public bid or offer, or closing
to the conditions under which it is approved, the Agency may also of the public offer, whichever occurs first. Also, undertakings that
impose structural or behavioural measures, should performance of make a public offer in accordance with the law regulating the
such a concentration restrict, distort or prevent competition. These takeover of joint-stock companies, and consequently acquire
measures may in particular include divestment of shares or control in terms of the Competition Act, must notify the Agency of
limitation/prohibition of use of voting rights. the public offer.
In case of acquisition of control through a public offer, the parties
3.8 Where notification is required, is there a prescribed to a concentration may finalise the public offering, notwithstanding
format? the obligations to suspend the concentration, if the acquirer does not
exercise voting rights or does so only so as to maintain the value of
Yes. The format and contents of merger notifications is regulated the target undertaking until clearance has been issued.
by the Guidelines on Form and Content of a Request for Issuance Furthermore, the Agency may upon a reasoned request of the
of Approval for Implementation of a Concentration [Uputstvo o notifying party, render a decision with urgency if it is required for
obliku i sadrini zahtjeva za izdavanje odobrenja za sprovoenje the protection of that partys rights or the assets of the acquired
koncetracije] (Official Gazette of the RMN, no. 77/2005). undertaking.
However, these guidelines are to be replaced with new ones (in the
first half of 2013) pursuant to the Competition Act. 3.12 Will the notification be published?
The notification shall be submitted in Montenegrin, and all
documents in foreign language need to be supplied with Pursuant to the Competition Act, the Agency is obliged to publish
corresponding certified translations. Certain documents may need certain information from the merger notification in the Official
to be notarised and super-legalised, as the case may be. Gazette of the Republic of Montenegro. Such information includes:
Should it deem the merger notification incomplete, the Agency is (i) the names of the undertakings concerned; (ii) a brief description
empowered to request any other documents and information it of the transaction; and (iii) the economic sector to which the
considers relevant for the assessment of the intended concentration. transaction occurs.
Similarly, the applicant may submit other documents and Furthermore, the operative part of the Agencys decision shall be
information that it considers relevant for the assessment of the published in the Official Gazette of the Republic of Montenegro
envisaged concentration. The Agency may revoke its decision if it and on the Agencys website.
is based on incorrect or incomplete information submitted by the
parties.
4 Substantive Assessment of the Merger and
Outcome of the Process
3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which
the clearance timetable can be speeded up? 4.1 What is the substantive test against which a merger will
be assessed?
There is no short form procedure for any types of mergers.
However, in case of acquisition of control through a public offer, The question at the heart of the substantive test is whether a
the Agency may upon a reasoned request of the notifying party concentration shall create or strengthen a dominant position, as a
render a decision with urgency if it is required for the protection of result of which effective competition on the relevant market may be
that partys rights or the assets of the acquired undertaking. restricted, distorted or prevented. If the answer is affirmative, such
a concentration shall be prohibited, unless the parties to the

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concentration demonstrate that resulting consumer benefits range of information gathering powers. Although most of these are
outweigh the negative effects resulting from the creation or the specifically designed for behavioural investigations (e.g. cartel
strengthening of a dominant position. investigations), the Competition Act nevertheless explicitly states
When assessing the effects of a concentration, the Agency shall that they may also be utilised in relation to merger control
consider the following criteria: proceedings. Although it is unlikely that the Agency would actually

Montenegro
use most of these powers in merger control proceedings, it
the structure and concentration of the relevant market(s);
nevertheless may: request from the parties to the concentration that
actual and potential competitors;
they provide certain information and documents; conduct on-sight
the market position of the parties to the concentration and investigations, i.e. inspect business premises, business records and
their economic and financial power; other documents, copy or scan business documents, and seal
the possibility to choose sources of supply and purchasers; business premises and documents; take statements from
legal and other barriers to enter the relevant market; representatives and employees of the parties to the concentration;
the domestic and international level of competitiveness of the take expert witnesses testimony; hold oral hearings; conduct
parties to the concentration; sectoral investigations, etc. The Agency may also contact other
the trends of supply and demand of relevant goods/services; state authorities to collect relevant information and/or to verify
the trends of technical and economic development; and facts.
the interests of consumers. At the request of the Agency, undertakings (as well as other legal
and natural persons) are obliged to provide it with information and
documents of relevance for a given proceeding before the Agency
4.2 To what extent are efficiency considerations taken into within a period of fifteen days. Undertakings that fail to comply
account?
with such requests can be subjected to fines in the range of EUR
500-5,000 for each day of non-compliance, but not more than 3%
The substantive test against which the admissibility of the of the total annual turnover achieved in the previous financial year.
concentration will be assessed requires that the negative and
positive effects of the concentration be weighed and balanced.
Consequently, the efficiencies stemming from the concentration 4.6 During the regulatory process, what provision is there for
need to be taken into account by the Agency so as to assess its the protection of commercially sensitive information?
admissibility.
On the basis of a request of the party supplying commercially
This is also reflected by the mandated contents of the merger
sensitive information, the Agency may allow that such data or the
notification which require that expected benefits from the point of
source of such data be protected, if the request is justified and
view of consumers (such as lower prices, improved quality, increased
outweighs the public interest to access such data. However, the
R&D and increased consumer choice) be named and reasoned.
party making the request is obliged to prove that it would incur
Efficiency considerations can also be seen in the decisional practice damage should such data or its source be made publicly available.
of the Agency, as it analyses possible efficiencies resulting from the Client-attorney communication is considered privileged
concentration in its decisions. However, to the best of our communication.
knowledge, significant attempts to substantiate and/or quantify
efficiencies have not yet been undertaken by the Agency.
5 The End of the Process: Remedies, Appeals
and Enforcement
4.3 Are non-competition issues taken into account in
assessing the merger?
5.1 How does the regulatory process end?
No. The Competition Act and applicable bylaws are not concerned
with non-competition issues, nor are they given a prominent role in Pursuant to the Competition Act, the Agency may either:
merger analysis, although they may be reflected upon by the reject the notification if the jurisdictional thresholds are not
Agency in the course of review. met;
cease the procedure if the notification is withdrawn;
4.4 What is the scope for the involvement of third parties (or clear the concentration unconditionally;
complainants) in the regulatory scrutiny process? clear the concentration subject to conditions; or
prohibit the concentration.
The Agency is obliged to publish a description of the notified
transaction in the Official Gazette of the RMN, and in particular: (i) In case the Agency clears the concentration based on incorrect or
the names of the participant in the concentration; (ii) a brief untrue data and/or facts, it shall declare the clearance null and void.
description of the transaction; and (iii) the economic sector in which
the transaction occurs, with the aim that third parties get acquainted 5.2 Where competition problems are identified, is it possible
with the intended concentration. Although the matter is not to negotiate remedies which are acceptable to the
regulated further by the Competition Act or bylaws, we believe parties?
third parties can provide the Agency with information, data and
opinions relevant for the transaction under review. Yes. If the Agency concludes that the notified concentration shall
restrict, distort or prevent competition, it shall notify the parties to
the concentration of the facts and conditions on which it intends to
4.5 What information gathering powers does the regulator
base its decision. In their answer to the Agency, the parties to the
enjoy in relation to the scrutiny of a merger?
concentration may suggest measures to be undertaken before or
after the concentration is performed, with the goal to remove any
Pursuant to the Competition Act, the Agency may utilise a wide
anti-competitive concerns. The Competition Act allows for both

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behavioural and structural measures. If the Agency is of the view 5.7 How are any negotiated remedies enforced?
that such measures are sufficient and as a result of them the
concentration shall not restrict, distort or prevent competition, it Pursuant to the Competition Act, negotiated remedies may be
shall clear the concentration subject to conditions. enforced in two ways. Firstly, if parties to a concentration fail to
The terms and conditions under which the concentration shall be implement the negotiated remedies, the Agency may revoke its
Montenegro

cleared, as well as methods of monitoring/supervision of their conditional clearance. Secondly, failure to comply with negotiated
implementation, shall be stipulated in the clearance. If the parties fail remedies may entail fines for the undertaking in violation in the
to implement the remedies, the Agency shall revoke its decision. amount of 1-10% of the total annual turnover in the financial year
preceding the violation. Furthermore, the responsible persons
within the undertaking in violation may be fined in the range of
5.3 To what extent have remedies been imposed in foreign- EUR 1,000-4,000.
to-foreign mergers?

There are no official statistics available on the decisional practice of 5.8 Will a clearance decision cover ancillary restrictions?
the Agency. To the best of our knowledge, no (foreign-to-foreign)
concentration has yet been approved subject to conditions. Neither the Competition Act nor any bylaws regulate the issue of
ancillary restraints. To the best of our knowledge, the Agency has
not dealt with the issue of ancillary restraints in its case law.
5.4 At what stage in the process can the negotiation of
However, at the same time, there is nothing to prevent the Agency
remedies be commenced? Please describe any relevant
from also clearing ancillary restraints in its decisions. Nonetheless,
procedural steps and deadlines.
such restraints can, at the request of the parties, be individually
exempt from prohibition by the Agency in separate proceedings.
If the Agency concludes that a notified concentration shall restrict,
distort or prevent competition, it shall notify the parties to the
concentration of the facts and conditions on which it intends to base 5.9 Can a decision on merger clearance be appealed?
its decision. In their answer to the Agency, the parties to the
concentration may suggest measures to be undertaken before or Yes. Merger control decisions of the Agency can be appealed
after the concentration is performed. before the Administrative Court of Montenegro.
However, although the Competition Act suggests that remedies are The Competition Act does not set out the circle of persons that can
offered only once the Agency has notified the parties that it intends challenge a merger control decision. According to the
to prohibit the concentration, we are of the opinion that remedies Administrative Disputes Act, the following persons are entitled to
could be offered from the outset of the merger review process. lodge an appeal: (i) the parties to the concentration whose rights or
legally protected interests are violated by a decision; (ii) third
parties whose rights or legally protected interests are violated by a
5.5 If a divestment remedy is required, does the merger
authority have a standard approach to the terms and decision; or (iii) the attorney general or other competent state body
conditions to be applied to the divestment? if the law has been violated in favour of, or to the detriment of,
certain third parties.
The Competition Act expressly provides that the Agency may
require divestment as a remedy. However, it does not regulate in 5.10 What is the time limit for any appeal?
detail how it shall approach the terms and conditions to be applied
to the divestment. The time limit for appeals to the Administrative Court of
The Competition Act provides that remedies need to be Montenegro is 30 days from the day of receipt of a decision. If the
proportionate and directly aimed at the competitive concern they appeal is to be lodged by a party that has not received the decision,
aim to remedy. As a general proposition, structural remedies shall the time limit is 60 days from the day of receipt of the decision by
be required if no equally effective behavioural remedy may be a party to whom it has been delivered.
imposed, or if a behavioural remedy would be a greater burden on
the parties to the concentration than a structural remedy.
5.11 Is there a time limit for enforcement of merger control
The Agency in particular (but not exclusively) may impose the legislation?
following types of structural remedies: sale of undertakings or parts
thereof to an unrelated party; dissolution of a joint venture (of the Fines for competition law violations, including those for merger
company and the underlying agreement); or severance of personal control, are imposed in misdemeanour proceedings by a court, on
ties between undertakings (e.g. decision-making and executive the initiative of the Agency. Misdemeanour proceedings against
bodies). undertakings and responsible persons within undertakings, for (i)
To the best of our knowledge, no divestment remedies have yet failure to notify a concentration within the prescribed deadline, (ii)
been imposed by the Agency. failure to suspend the concentration until clearance, (iii) failure to
comply with the terms and conditions of a conditional clearance,
and (iv) performing a prohibited concentration, cannot be initiated
5.6 Can the parties complete the merger before the remedies
after two years from the day the violation has occurred. In any case,
have been complied with?
misdemeanour proceedings cannot be initiated after 4 years from
the day a violation has occurred.
Yes. The Competition Act expressly provides that measures can be
undertaken before or after the concentration is performed. However,
the terms and conditions in accordance with which the measures shall
be undertaken will be set-out in the clearance. If the parties fail to
implement the measures, the Agency may revoke its decision.

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6 Miscellaneous 6.2 Are there any proposals for reform of the merger control
regime in Montenegro?

6.1 To what extent does the merger authority in Montenegro The merger control regime in Montenegro just recently underwent
liaise with those in other jurisdictions?
significant changes with the entry into force of the Competition Act.

Montenegro
As stipulated by the Competition Act, new bylaws need to be
Unfortunately, there is only very limited information available on
adopted (in particular relating to relevant market definition and the
any cooperation between the Agency and competition authorities in
form and contents of merger notifications) in order to be compliant
other jurisdictions. Pursuant to publicly available information, the
with provisions of the Competition Act, which is expected to come
Agency is a member of the International Competition Network and
into force in the first half of 2013.
has also concluded certain bilateral agreements, in particular with
the Bulgarian competition authority.
6.3 Please identify the date as at which your answers are up
According to its Competition Policy Strategy published in June
to date.
2008, one of the Agencys main goals is cooperation with other
national competition authorities.
18 September 2012.

Srana Petronijevi Danijel Stevanovi


Moravevi Vojnovi Zdravkovi Moravevi Vojnovi Zdravkovi
in cooperation with Schoenherr in cooperation with Schoenherr
Francuska 27 Francuska 27
11000 Belgrade 11000 Belgrade
Serbia Serbia

Tel: +381 11 320 2600 Tel: +381 11 320 2600


Fax: +381 11 320 2610 Fax: +381 11 320 2610
Email: s.petronijevic@schoenherr.rs Email: d.stevanovic@schoenherr.rs
URL: www.schoenherr.rs, www.schoenherr.eu URL: www.schoenherr.rs, www.schoenherr.eu

Srana Petronijevi is a partner (Serbia) with Moravevi Danijel Stevanovi is an associate with Moravevi Vojnovi
Vojnovi Zdravkovi in cooperation with Schoenherr, where she Zdravkovi in cooperation with Schoenherr since 2009 and is a
heads up the firms competition and white collar crime practice. member of the firms EU & Competition practice. He deals with
She has been involved in numerous high-profile merger control all aspects of competition law in several jurisdictions (Serbia,
proceedings before the Serbian competition authorities and Montenegro, Bosnia and Herzegovina, Macedonia, Albania and
coordinated global merger control filings, particularly in the former Kosovo) with a particular emphasis on merger control. Danijel
republics of Yugoslavia. In addition, she also advises clients on has advised international clients in various sectors (including oil &
all aspects of antitrust law and while collar criminal law. She has gas, basic resources, construction & materials, industrial goods &
designed a number of compliance programmes for our larger services, automobiles & parts, food & beverage, personal &
corporate clients, tailor-made to their individual needs. Another of household goods, retail, media, telecommunications and
Sranas key tasks is advising clients on all aspects of criminal technology) in respect of multi-jurisdictional merger control filings
compliance and white collar crime matters in Serbia while also and behavioural investigations, as well as on various aspects of
providing full coverage in Bosnia and Herzegovina, Macedonia, market behaviour and competition law compliance. Danijel holds
Montenegro and Kosovo via specialised country desks. Sranas an LL.M. degree from the Central European University in
client base is wide and varied and covers the Budapest where he focused on EU competition law and is fluent
telecommunications, energy, insurance, banking, construction, in English, Hungarian and Serbian.
real estate, road development, pharmaceutical, media and IT
industries. Srana holds a LL.M. in International Business Law.

Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr has been active on the Serbian market since 2002. The firms
practice is client-orientated, with specialised practice groups that provide industry-focused services to meet the demand of a
competitive, developing and rapidly changing marketplace.
In addition to the Serbian practice, Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr is frequently engaged in
Bosnia and Herzegovina, Montenegro, Macedonia and Kosovo. The firms client list includes leading companies, financial
institutions, organisations and governments. The Belgrade office, via its specialised country desks, acts as a hub for Bosnia-
Herzegovina, Macedonia, Montenegro and Kosovo.
Schoenherr is a leading corporate law firm in Central and Eastern Europe, operating through offices in Belgrade, Bratislava,
Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna, Warsaw and Zagreb. Operating in a
rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of experienced lawyers and young
talent. Our comprehensive coverage of the region means we can offer solutions that perfectly fit the given industry, jurisdiction
and company.

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Chapter 43

Romania Mihai Rdulescu

Schoenherr si Asociatii SCA Cristina Pan

1 Relevant Authorities and Legislation 1.3 Is there any other relevant legislation for foreign mergers?

No. The merger control rules set out under question 1.2 above
1.1 Who is/are the relevant merger authority(ies)?
apply equally to domestic and foreign-to-foreign mergers.

The competent merger control authority in Romania is the


Romanian Competition Council (RCC). Also, the Romanian 1.4 Is there any other relevant legislation for mergers in
Government is empowered to review mergers raising national particular sectors?
security issues.
The Romanian Government may issue decisions prohibiting
concentrations that pose risks to national security, with observance
1.2 What is the merger legislation? of the competence of the European Commission, if applicable.
Other than that, there are no special merger control rules for
The main legislative acts regulating concentrations are:
particular sectors.
Law no. 21/1996 on competition (Competition Law) with
the subsequent amendments.
Regulation on concentrations (Merger Regulation) 2 Transactions Caught by Merger Control
approved by RCC Order no. 385/2010, with the subsequent Legislation
amendments.
Guidelines on the concepts of concentration, concerned
undertakings, full-function joint ventures and calculation of 2.1 Which types of transaction are caught in particular, how
turnover, approved by RCC Order no. 386/2010. is the concept of control defined?

Guidelines regarding restrictions directly linked and


necessary for the implementation of concentrations, The merger control legislation applies to mergers and acquisitions
approved by RCC Order no. 387/2010. of control over undertakings or parts of undertakings (altogether
referred to as concentrations).
Guidelines for the implementation of Article 32 of the
Competition Law no. 21/1996 on the calculation of the Control is defined as deriving from rights, contracts or any other
authorisation fee for concentrations, approved by RCC Order elements which together or separately confer to an undertaking, or
no. 400/2010, with the subsequent amendments. person, the possibility to exercise a decisive influence over an
Guidelines on the calculation of sanctions for the undertaking. The definition of control is sufficiently broad to
misdemeanours stipulated in Article 50 and Article 501 of the encompass all types of transactions that bring about changes in
Competition Law, approved by RCC Order no. 419/2010. control (share deal, asset deal, shareholder agreements, etc.).
Guidelines on the calculation of sanctions for
misdemeanours stipulated in Article 51 of the Competition
Law, approved by RCC Order no. 420/2010. 2.2 Can the acquisition of a minority shareholding amount to
a merger?
Guidelines on remedies applicable for cases of
concentrations, approved by RCC Order no. 688/2010.
The acquisition of a minority shareholding is deemed to amount to
Guidelines on access to the file in cases regarding Article 5,
a concentration only if it implies an acquisition of control. This
Article 6 and Article 9 of the Competition Law, Articles 101
and 102 of the Treaty on the Functioning of the European may occur if the respective minority shareholding is associated with
Union, as well as for concentrations, approved by RCC controlling rights, e.g. decisive veto rights in joint-control cases
Order no. 421/2011, with the subsequent amendments. providing the possibility to block decision-making processes in
Regulation on tariffs charged for procedures and services negative sole-control cases.
provided under the Competition Law and the regulations
issued for its implementation, approved by RCC Order no. 2.3 Are joint ventures subject to merger control?
426/2011, with the subsequent amendments.
Regulation on application of sanctions by the RCC approved Only the setting up of a full-function joint venture may be subject
by RCC Order no. 668/2011.
to merger control in Romania. Full-function joint ventures are
defined as jointly-controlled undertakings which may carry out

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their business on a long-term basis and which may perform all have been carried out without the other, and, where control is
functions of an autonomous economic entity. The Romanian acquired, it is ultimately by the same undertaking(s). This
criteria for assessing whether such requirements are met mirror the covers the following situations if interdependent:
principles defined in the European Commissions Consolidated the same buyer acquires a business or undertaking
Jurisdictional Notice. through several acquisition transactions of shares or
assets;

Romania
the same buyer acquires the control over several
2.4 What are the jurisdictional thresholds for application of
undertakings from different sellers; and
merger control?
the same buyer acquires sole control for a transitory
period, at the end of which it would be turned into
The merger control review process applies to concentrations
joint control with a third undertaking.
involving undertakings with a combined worldwide turnover for the
previous financial year exceeding EUR 10,000,000. Furthermore,
at least two of these concerned undertakings must each have had a 3 Notification and its Impact on the Transaction
Romanian turnover exceeding EUR 4,000,000 for the previous Timetable
financial year.

3.1 Where the jurisdictional thresholds are met, is notification


2.5 Does merger control apply in the absence of a compulsory and is there a deadline for notification?
substantive overlap?
Concentrations meeting the turnover thresholds, described under
Merger control applies whenever the conditions mentioned under question 2.4 above, are subject to a mandatory notification to the
question 2.4 above are fulfilled, regardless of the absence of RCC. This notification may be submitted upon the conclusion of
substantive overlaps between the concerned undertakings. the agreement underlying the respective transaction or upon the
announcement of the public bid in the event of an acquisition of
2.6 In what circumstances is it likely that transactions control over publicly-traded companies. The Competition Law
between parties outside Romania (foreign-to-foreign provides that notifications can be submitted even earlier, if the
transactions) would be caught by your merger control parties prove their good faith that they intend to conclude the
legislation? transaction or, where an acquisition takes place by public offering,
after the parties have made public their intention to make such an
Foreign-to-foreign transactions are also subject to the merger offer. As opposed to the previous merger control regime, there is no
control of the RCC, whenever the turnover thresholds defined under specific deadline for notifying a transaction. In any case, the
question 2.4 above are met (of course, the Romanian thresholds notification must be submitted before the concentration is
must be assessed in this case). implemented.

2.7 Please describe any mechanisms whereby the operation 3.2 Please describe any exceptions where, even though the
of the jurisdictional thresholds may be overridden by other jurisdictional thresholds are met, clearance is not required.
provisions.
Pursuant to the Competition Law, the following are not considered
Except for the one-stop-shop principle and the referral mechanisms concentrations:
under the EC Merger Regulation, there are no further mechanisms Where banks and other credit and financial institutions,
whereby the jurisdiction of RCC may be overridden. insurance and reinsurance companies the normal activities
of which include transactions and dealing in securities for
their own account or for the account of others acquire
2.8 Where a merger takes place in stages, what principles securities on a temporary basis for resale, provided that they
are applied in order to identify whether the various stages do not exercise voting rights in respect of those securities to
constitute a single transaction or a series of transactions? determine the competitive behaviour of that undertaking or
provided that they exercise such voting rights only to prepare
The Competition Law provides that acquisitions of different assets the disposal of those securities and that any such disposal
taking place between the same undertakings within a period of 2 take place within one year of the date of acquisition; the one-
years are considered a single concentration, finalised on the date of year term may be prolonged by the RCC.
the last transaction. Where control is acquired by a liquidator appointed by a
Other than this, the secondary legislation identifies several court decision or by another person mandated by a public
authority to pursue proceedings related to cessation
situations where a series of transactions are treated as a single
payments, judicial liquidation or any other any similar
concentration: proceedings.
(a) In successive operations, whereby the first transaction is Where there are restructuring and reorganisation within the
transitory. The acquisition of control over an undertaking is same group of undertakings.
deemed transitory when such acquisition is made:
Where the acquisition of control is made by an undertaking -
jointly by several undertakings for splitting the the sole business purpose of which is to acquire, manage and
targets assets among themselves within a short period dispose of the respective participations - without
of 1 year maximum; or involvement in the management of that undertaking and
jointly by several undertakings for a transitory period without exercising the voting rights in respect of the
of 1 year maximum, at the lapse of which one of the controlled undertaking, in particular, in relation to the
associates is to acquire final sole control. appointment of the management and supervisory bodies of
(b) By an intermediary acquirer on behalf of a final purchaser. the undertaking controlled, except where only to maintain
In interdependent transactions, one transaction would not the full value of such investment, but not to determine

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directly or indirectly the competitive conduct of the opposition decision whereby the transaction is authorised or a
undertaking controlled. decision launching Phase II. Non-opposition decisions may be
issued if: (i) there are no serious doubts regarding the compatibility
3.3 Where a merger technically requires notification and of the concentration with a normal competition environment; or (ii)
clearance, what are the risks of not filing? Are there any if serious doubts regarding compatibility with a normal competition
formal sanctions? environment have been removed by commitments proposed by the
Romania

parties concerned and accepted by the RCC. Phase I may also


The failure to obtain clearance from the RCC prior to the conclude within 30 days of the effective day, with the issuance of a
implementation of a notifiable concentration may be sanctioned letter stating that the respective transaction does not fall under the
with a fine ranging from 0.5% to 10% of the total turnover obtained merger control process before the RCC. According to the internal
in the previous financial year. For newly set-up companies that did statistics of the competition authority, the average duration for
not register any turnover in the previous financial year, the fine may reviewing a notification from submission until Phase I clearance is
range from RON 15,000 to RON 2,500,000. approx. 2.5 months.
Phase II: if the RCC opens phase II proceedings, it must decide
within 5 months as of the effective day whether: (i) to clear the
3.4 Is it possible to carve out local completion of a merger to
avoid delaying global completion? transaction unconditionally; (ii) to clear the transaction subject to
commitments; or (iii) to prohibit the transaction. Phase II
Romanian merger control legislation does not expressly provide for proceedings may not be extended beyond this 5-month period. In
any form of carve-out mechanism that would allow for an 2010, the RCC launched and closed a Phase II investigation in one
implementation outside Romania. Also, there is no relevant case case only, concerning the case Lidl/Plus deferred by the European
law on this matter. Commission for review by the Romanian and Bulgarian
competition authorities. In 2010, the RCC also launched an
Under the Competition Law, however, the RCC is competent to
investigation in relation to the plan envisaged by the Romanian
appraise only the effects of the respective concentration on the
Government to reunite all state-owned energy companies into two
Romanian market. Therefore, if it is possible to hold the targets
energy companies. The project was, however, subsequently
Romanian business separate until clearance is obtained by the RCC,
abandoned and the investigations were closed.
it may be argued that the implementation of the merger outside
Romania is not prohibited given the absence of the RCCs Regarding the timeframe for submitting remedies, please refer to
jurisdiction outside Romania. question 5.3 below.

The transfer of shares is arguably not an act of early Tacit approval: if the RCC does not take any decision within the
implementation, provided that the acquiring undertaking does not deadlines established by the law, the notified concentration is
cast the voting rights attached thereto. considered approved and can be closed.

On the other hand, since Romanian merger control legislation The current legislation does not expressly regulate the possibility
provides for the possibility to apply for a derogation from the for the RCC to suspend proceedings. Since Phase I and Phase II
standstill obligation, such approach appears as the safest solution periods only start from the effective day, proceedings are practically
for implementing an international transaction. suspended until the parties provide the information required by the
RCC. Once a notification is deemed complete, there is no regulated
mechanism to suspend proceedings. Nevertheless, the RCC has the
3.5 At what stage in the transaction timetable can the possibility to impose significant fines on the parties for failing to
notification be filed? (timely) supply the required information.

Please see question 3.1 above.


3.7 Is there any prohibition on completing the transaction
before clearance is received or any compulsory waiting
3.6 What is the timeframe for scrutiny of the merger by the period has ended? What are the risks in completing
merger authority? What are the main stages in the before clearance is received?
regulatory process? Can the timeframe be suspended by
the authority? It is forbidden to implement a concentration prior to its clearance by
the RCC. The RCC may grant derogations from this standstill,
Pre-notification phase: parties are advised to initiate pre- upon the parties reasoned request, even prior to the submission of
notification contacts with the RCC 2 weeks prior to the submission the formal notification. It is advisable that the parties prioritise the
of the notification, at the latest. submission of derogation applications since these ultimately impact
Submission of notification: within 5 days as of the submission of on the length of the merger review process itself. To date, the RCC
a notification, the RCC informs the parties in writing whether the has usually approved derogation applications backed by the
notification file meets the requirements to be deemed validly financial and economic distress of the target undertaking. In 2010,
submitted. the RCC approved only a single derogation application, for an asset
Effective date: within 20 days as of the valid submission of the deal, justified by the high maintenance costs incurred by the seller
notification, the RCC may request parties concerned to submit in relation to the target assets.
additional information/documentation. The deadline for However, the standstill obligation does not impede the carrying-out
submission of such documents cannot be longer than 15 days from of a public offer or series of dealings with publicly-listed securities
the date of the RCC request. There may be several rounds of whereby control is acquired from different sellers, provided that the
requests for information/answers until a notification is deemed respective concentration is notified without delay to the RCC and
complete by the RCC (effective day). that the acquired voting rights are not exerted.
Phase I: proceedings may last maximum 45 days from the effective The following are considered as acts of implementation, inter alia:
day, at the end of which the RCC may issue either a so-called non- exercising voting rights in respect of the budget, investment

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plan, business plan and appointment of members in the 3.10 Who is responsible for making the notification and are
managing bodies of the target undertaking; there any filing fees?
changing the scope of the business or the commercial name
of the target undertaking; Mergers must be notified by each of the concerned parties.
market entry/exit of the target undertaking; Acquisitions of control must be notified by parties acquiring
restructuring, dissolution or spin-off of the target control. When there is a change from sole to joint control or when

Romania
undertaking; the number of parties holding joint control increases, the
notification must be filed by all parties holding joint control.
selling assets of the target undertaking;
layoff of employees of the target undertaking; All merger control notifications are subject to a filing fee in amount
of RON 4,775 (approx. EUR 1,105). Cleared concentrations are
conclusion or termination of long-term or other important
agreements between the target undertaking and third parties; subject to a clearance fee that ranges between EUR 10,000 and
and EUR 25,000, depending on the turnover achieved in Romania in the
year preceding the clearance of the concentration by the merging
listing of the target undertaking on a stock exchange market.
undertakings in case of mergers or by the target or the acquiring
For the fining risks related to completing before clearance, please undertakings/person(s) in case of acquisitions, depending on the
refer to question 3.3 above. The validity of implementation type of transaction. The equivalent in RON is calculated at the
measures taken in breach of the standstill obligation will depend on exchange rate established by the National Bank of Romania, for the
the outcome of the merger control procedure before the RCC. last day of the year preceding the issuance of the clearance decision.

3.8 Where notification is required, is there a prescribed 3.11 What impact, if any, do rules governing a public offer for a
format? listed business have on the merger control clearance
process in such cases?
There are two types of notification forms: the simplified form; and
the full form. The simplified form requires information on the Outside rules on public offers for listed businesses have no impact
parties, their business and turnover and certain market data. The on the merger control clearance process in Romania.
full form requires, in addition, data on the suppliers, customers and
competitors of the parties and extensive information on the
competitive effects of the concentration on the market. 3.12 Will the notification be published?

Notifications per se are not published by the RCC. However, where


3.9 Is there a short form or accelerated procedure for any the RCC finds the Competition Law applicable to an economic
types of mergers? Are there any informal ways in which concentration, it may publish on its website and/or release
the clearance timetable can be speeded up?
information from the notification, mentioning the name of the
involved undertakings, their country of origin, the nature of
The Merger Regulation provides that the following categories of
concentration, the involved economic sectors and the date when of
concentrations may be assessed under the simplified merger control
receipt of the notification. Any additions or changes to the
procedure:
information supplied by the parties may also be published.
(i) transactions where two or more undertakings acquire joint Nevertheless, the RCC will take into account the legitimate
control over an undertaking that does not carry out any interests of the undertakings in order to protect their business
business in Romania or has only an insignificant business in
secrets and other confidential information.
Romania. This requirement is met if the turnover of the joint
venture and/or of the transferred business, as well as the
value of the assets transferred to the joint venture, does not 4 Substantive Assessment of the Merger and
exceed EUR 4 million in Romania;
Outcome of the Process
(ii) transactions between parties operating on non-related
markets;
(iii) transactions which do not affect markets (i.e., for vertical 4.1 What is the substantive test against which a merger will
overlaps, neither of the parties operating upstream or be assessed?
downstream to another party has a market share in excess of
25%; for horizontal overlaps, the parties combined market The substantive test applied by the RCC in merger control
share is below 15%); or proceedings is whether a concentration leads to significant
(iv) transactions whereby an undertaking acquires sole control of impediments to efficient competition on the Romanian market or a
a target over which it previously held joint control. substantial part thereof, especially by creating or strengthening a
The concerned parties may initiate pre-notification consultations dominant position on the Romanian market or a part thereof.
with the RCC, at least 2 weeks prior to when they intend to submit
a simplified notification form with the RCC. 4.2 To what extent are efficiency considerations taken into
Ideally, a simplified notification form should be deemed effective account?
on the day of its submission to the RCC.
The Merger Regulations set out rather broad criteria which RCC
The clearance timetable can be sped up if (a) notification is
needs to consider upon assessment of every filing (e.g., market
submitted prior to signing of the transaction documents as the RCC
position, sourcing, and entry barriers). Such criteria also refer to
has flexibility to start processing merger control filings on the basis
economic and technical progress to the extent such represents a
of a LoI or MoU or even draft SPA, (b) offering of remedies already
benefit to the end consumer and not an obstruction to competition.
during phase 1 if a conditional clearance is anticipated, and (c) face-
Apart from this quite broad wording, applicable laws are currently
to-face meetings involving business people with knowledge about
silent in regulating other efficiency considerations. RCC often uses
the industry are being sought by the notifying party.

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in practice the considerations set out in the EU guidelines in cases concerned parties. The decision of the Bucharest Court of Appeals
where (i) clearance is sought in phase 1 and there overlaps which may be appealed within 5 days of its communication. The courts
result in a combined market share of around 40% (threshold as of will rule in an emergency proceeding.
which market dominance is presumed), or (ii) phase II proceedings A particular situation is that of the courts, which have the possibility
in connection with discussions around remedies. to retrieve confidential information when reviewing cases regarding
the awarding of damages. In such circumstances, the courts may
Romania

4.3 Are non-competition issues taken into account in ask the RCC to provide them with the entire underlying
assessing the merger? documentation for decisions whereby an anticompetitive conduct
was established and sanctioned. Courts are, however, bound by the
There is no clear legal basis for RCC to take into account non- confidentiality of commercially-sensitive information or any other
competition issues. When rendering its assessment RCC may information qualified as confidential.
however consider some major economic or social aspects on a case- Even though, according to the 2011 amendments to the Competition
by-case basis. Law, information collected by the RCC may only be used for the
purpose of enforcing the Competition Law, the RCC may
4.4 What is the scope for the involvement of third parties (or nevertheless inform other authorities of aspects provided therein,
complainants) in the regulatory scrutiny process? pertaining to their jurisdiction.

There are several instances where third parties may intervene in the 5 The End of the Process: Remedies, Appeals
merger control review process:
and Enforcement
Submission of comments: in practice, in cases which may raise
doubts as to their compatibility with the Romanian market, the RCC
proceeds to publish on its website an invitation for third parties to 5.1 How does the regulatory process end?
submit comments on the respective concentration. The RCC may
also ask third parties to submit their comments within a deadline Please refer to question 3.6.
when it intends to accept commitments proposed by the concerned
parties. For this, the RCC will publish a summary of the case and 5.2 Where competition problems are identified, is it possible
the essential content of the proposed commitments. to negotiate remedies which are acceptable to the
Questionnaires: in some cases, the RCC may send questionnaires parties?
to third parties such as suppliers, customers, competitors or trade
associations for obtaining information on the concerned markets. Subsequent to filing a merger control notification, the parties may
submit proposals for remedies to the RCC. It is possible to submit
Complaints: third parties may file complaints with the RCC
both behavioural and structural remedies. However, structural
regarding concentrations. Upon receipt of a complaint, the RCC
remedies are preferred. For example, possible remedies encompass
may theoretically decide to investigate the contested transaction.
individually or jointly the following: divestments; termination or
amendment of existing exclusive agreements; access to necessary
4.5 What information gathering powers does the regulator infrastructure; networks or key technologies by way of licence
enjoy in relation to the scrutiny of a merger? agreements or otherwise; and price reporting obligations and
mechanisms designed to prevent customer discrimination. The
The RCC may require the concerned parties, as well as third parties RCC may also accept compartmental remedies, but only under
to provide whatever information and documents it deems relevant exceptional and specific circumstances, such as where necessary to
for assessing a concentration. The RCC may also interview any remedy competition issues arising from conglomerate structures.
legal or natural person who agrees to be interviewed. The case
handlers may also request meetings with representatives of the
5.3 To what extent have remedies been imposed in foreign-
concerned undertakings. RCC officials are also empowered to
to-foreign mergers?
conduct dawn raids and collect relevant information from any type
of support, should the RCC open an investigation for a suspected
The RCC has not yet issued any decision involving remedies in
failure to notify a concentration or for an infringement of the
foreign-to-foreign mergers.
suspension clause.

5.4 At what stage in the process can the negotiation of


4.6 During the regulatory process, what provision is there for
remedies be commenced? Please describe any relevant
the protection of commercially sensitive information?
procedural steps and deadlines.

The parties cannot withhold confidential information from the Remedy proposals may be submitted in both phases of a merger
RCC. The parties must identity confidential information by control proceeding. However, remedies may only be accepted if
marking it appropriately in the notification file or written answers submitted either before when the notification becomes effective or
to the RCC as business secret or confidential information. within 2 weeks after, or within 30 days after Phase II proceedings
The RCC is bound, however, by the confidentiality of such have been opened. In exceptional circumstances, the parties may
information when publishing a decision or when granting third request a 15-day extension of the 30-day period, in order to find an
parties access to the file. Confidential documents, data and acceptable remedies solution. If remedies are accepted, the RCC
information may not be consulted or copied by third parties unless will issue a conditional clearance decision, stating therein also the
the President of the RCC issues a decision expressly authorising timeline within which the remedies must be implemented. The
this. Such decision is subject to appeal before the Bucharest Court failure to comply with the remedies imposed on the concerned
of Appeals within 15 days from when it was communicated to the undertakings may lead to the revocation of the clearance decision,

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the suspension of the concentration and the imposition of fines of 5.10 What is the time limit for any appeal?
up to 10% of the total turnover.
Please see the answer to question 5.9 above.
5.5 If a divestment remedy is required, does the merger
authority have a standard approach to the terms and 5.11 Is there a time limit for enforcement of merger control
conditions to be applied to the divestment? legislation?

Romania
No. To date, the RCC has not issued model texts for divesture The statute of limitations for the failure to notify a concentration or
commitments and trustee mandates. for its implementation is 5 years. The statute of limitations for
procedural infringements is 3 years. These periods begin to run
5.6 Can the parties complete the merger before the remedies from the date when the unlawful practice occurred. In the case of
have been complied with? continuous unlawful practices, the statute of limitations is
calculated from the date of the last unlawful act.
In the clearance decision, the RCC sets forth a timeline within
which the respective remedies must be implemented. Meanwhile, 6 Miscellaneous
parties may proceed to implement the transaction. However, for
certain types of remedies such as divestments, the parties may have
to delay the implementation of the transaction, depending on the 6.1 To what extent does the merger authority in Romania
circumstances, until a suitable buyer is found. liaise with those in other jurisdictions?

The RCC is a member of the International Competition Network


5.7 How are any negotiated remedies enforced? and of the European Competition Network. The RCC may demand
documents and information and may carry out inspections of
In order to supervise the compliance with divestment-related various undertakings at the request of the European Commission
remedies, the concerned undertakings may have to appoint a and of other competition authorities in the EU Member States.
representative. Such representatives must be approved by the RCC
in advance, and may be investment banks, audit or consultancy
companies or any individual familiar with the relevant industry. 6.2 Are there any proposals for reform of the merger control
regime in Romania?
The representative shall be remunerated by the concerned
undertakings and shall safeguard, in good faith, the implementation
of the remedies on behalf of the RCC. Recently, the RCC released a document describing the reform goals
for its activity. Two of the proposals address economic
concentrations. Firstly, the RCC intends to pass Guidelines on the
5.8 Will a clearance decision cover ancillary restrictions? simplified procedure for economic concentrations. The procedure
will involve a less hierarchical structure and approach, in order to
RCC clearance decisions are deemed to cover ancillary restraints. maximise results. Secondly, the RCC plans to adopt criteria for
Nevertheless, the parties to a transaction must assess on their own reviewing the impact the application of competition rules and the
whether a restriction falls within the ancillary restraints category, analysis of competitive effects have on cases of economic
pursuant to the RCC Guidelines on ancillary restraints. In practice, concentrations and abuse of dominance. Such criteria will be
the RCC still plays an active role and informs the parties of the geared towards consumer benefits and, according to the RCC, will
requirements it deems necessary to render restrictions ancillary. consist of internationally-acknowledged methods, which will take
into account the recent literature.
5.9 Can a decision on merger clearance be appealed?
6.3 Please identify the date as at which your answers are up
RCC merger control decisions are subject to appeal before the to date.
Bucharest Court of Appeals within 30 days of their communication
to the parties. The judgment of the Court of Appeals is subject to a Our answers are up to date as of September 20, 2012.
further and final appeal to the High Court of Cassation and Justice.

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Mihai Rdulescu Cristina Pan


Schoenherr si Asociatii SCA Schoenherr si Asociatii SCA
Blvd. Dacia Nr. 30, Etaj 4, Sector 1 Blvd. Dacia Nr. 30, Etaj 4, Sector 1
RO-010413 Bucharest RO-010413 Bucharest
Romania Romania
Romania

Tel: +40 21 319 6790 Tel: +40 21 319 6790


Fax: +40 21 319 6791 Fax: +40 21 319 6791
Email: m.radulescu@schoenherr.eu Email: c.pana@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Mihai Rdulescu is a partner of Schoenherrs Bucharest office Cristina Pan is an attorney at law with Schoenherr Romania and
and heads the competition team. He also specialises in M&A and a member of the Bucharest bar since 2002. She specialises in
corporate. Romanian competition law (antitrust and merger control). Cristina
Mihai, a graduate of the University of Bucharest, was one of the graduated from the Law School of Bucharest University in 2001
first to join Schoenherr Romania, and has been part of the team and the post-graduate studies programme of European Business
since 1997. From the very beginning, Mihai was involved in high- Law of Henry Capitant Nicolae Titulescu Institute,
level competition work and he successfully established one of the Bucharest/Romania in 2002. Cristina has also completed the
countrys most renowned competition practices. LL.M. programme in international business law of the Central
He has counselled, among others, large international European University, Budapest/Hungary (LL.M. 2003). Cristina
corporations with regards to merger control and to investigations advises international and domestic enterprises in Romania in all
opened by the Romanian competition authority Consiliul antitrust aspects. She is fluent in Romanian and English.
Concurenei. He has also advised on a number of state-aid
issues in relation to financing of public bodies and antitrust
aspects in relation to distribution agreements. Mihai speaks
Romanian, German and English.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of
experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be one
of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means that
we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 44

Serbia Srana Petronijevi

Moravevi Vojnovi Zdravkovi


Matija Vojnovi
in cooperation with Schoenherr

1 Relevant Authorities and Legislation into force on 1 November 2009. The Competition Act supersedes
the 2005 Law on the Protection of Competition (Official Gazette of
the Republic of Serbia, no. 79/05), which regulated merger control
1.1 Who is/are the relevant merger authority(ies)?
rules until the entry into force of the Competition Act.

The authority with competence over merger control in Serbia is the The Competition Act regulates both the substantive and procedural
Commission for the Protection of Competition [Komisija za zatitu aspects of merger control. To the extent that some procedural rules
konkurencije] (Commission), an independent administrative body are not regulated by the Competition Act, the Law on General
established in 2005 and operative as of 2006. The website of the Administrative Proceedings [Zakon o optem upravnom postupku]
Commission is accessible at www.kzk.org.rs. (Official Gazette of the Republic of Serbia, nos. 33/97, 31/01 and
30/2010) applies subsidiarily. Administrative disputes before the
The Commission, competent to enforce competition law in its
Administrative Court are governed by the Law on Administrative
totality and not just merger control rules, is an independent
disputes [Zakon o upravnom sporu] (Official Gazette of the
governmental body responsible for its work to the Serbian
Republic of Serbia, no. 111/09).
Parliament.
Certain aspects of merger control are further regulated in secondary
The Commissions professional service was in 2011 composed of
legislation, namely:
31 employees, 20 of them case-handlers. Of relevance for merger
the Ordinance on Criteria for Determining the Relevant
control, the merger control department had 6 employees, while the
Market [Uredba o kriterijumima za odreivanje relevantnog
legal and economic analysis departments had 3 employees each. trita] (Official Gazette of the Republic of Serbia, no.
The current number of employees is below the required number 89/2009);
provided for by the Commissions internal organisational plan and
the Ordinance on Content and the Manner of Submission of
the Commission sees understaffing as one of its main weaknesses Merger Notifications [Uredba o sadrini i nainu
next to financial constraints. podnoenja prijave koncetracije] (Official Gazette of the
Pursuant to the Commissions Annual Reports, it received 114 Republic of Serbia, no. 89/2009) (the Implementing
merger notifications in 2011, of which it assessed 100 in the same Ordinance), which governs the required content and form of
year (and of which 92 resulted in Phase I clearances and two in merger notifications;
Phase II clearances). The Commission assessed 73 notifications in the Ordinance on the Criteria for Determining the Amount
2010, 116 in 2009, 137 in 2008, 125 in 2007 and 56 in 2006. Payable on the Basis of a Competition Measure and
Procedural Penalty, the Manner and Deadlines for their
The Commission in 2011 also had significant activities in terms of Payment and the Conditions for Determining these Measures
rendering official opinions, which it can do on two different [Uredba o kriterijumima za odreivanje visine iznosa koji se
grounds. The first grounds relate to interpretation of merger control plaa na osnovu mere zatite konkurencije i procesnog
rules, on the basis of which it received more than 30 requests in penala, nainu i rokovima plaanja i uslovima za
2011, most of which concerned the issue of whether a given odreivanje tih mera] (Official Gazette of the Republic of
concentration is subject to notification. The second ground is Serbia, no. 50/2010) (Ordinance on Fines); and
founded on the Bankruptcy Act (Official Gazette of the Republic of the Commissions Guidelines on the application of the
Serbia, no. 104/2009), pursuant to which the Commission rendered Ordinance on Fines (of 19 May 2011) [Smernice za primenu
123 opinions concerning the issue of whether a given acquisition of Uredbe o kriterijumima za odreivanje visine iznosa koji se
plaa na osnovu mere zatite konkurencije i procesnog
control via bankruptcy proceedings or bankruptcy restructuring is
penala, nainu i rokovima plaanja i uslovima za
subject to merger control.
odreivanje tih mera], which supplement the Ordinance on
Decisions of the Commission can be challenged before the Fines.
Administrative Court of Serbia [Upravni sud] (Administrative
Court), operational as of January 2010.
1.3 Is there any other relevant legislation for foreign mergers?

1.2 What is the merger legislation? There are no specific rules regarding foreign mergers. General
merger control rules apply also to foreign mergers provided that the
Merger control rules are regulated by the Law on the Protection of respective jurisdictional thresholds are met (please see questions
Competition [Zakon o zatiti konkurencije] (Official Gazette of the 2.4 and 2.6 below).
Republic of Serbia, no. 51/09) (Competition Act), which came

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1.4 Is there any other relevant legislation for mergers in shareholding; (ii) ownership or ownership rights over the assets
particular sectors? (parts of assets) of an undertaking; (iii) rights deriving from
contracts or securities; and (iv) receivables, guarantees over
The Competition Act applies to mergers irrespective of the sectors receivables and based on the terms and conditions of business
they pertain to. However, certain sector-specific regulations apply practice.
to mergers in certain sectors: In opinions issued 1 September 2006 (no. 126/06) and 4 November
Banking: Direct or indirect acquisitions of a qualified 2008 (no. 1/0-06-418/08), as well as in its Annual Reports, the
Serbia

shareholding (i.e. 5%, 20%, 33% and 50%) in Serbian banks Commission clarified that asset deals can equally (such as share
can only be consummated subject to approval by the deals) constitute a concentration only if the acquirer through
National Bank of Serbia (NBS) - Article 94 of the Banks
purchasing the assets is conferred with decisive influence over the
Act (Official Gazette of the Republic of Serbia, nos. 107/05
and 91/10). Acquisitions of control over companies involved acquired business.
in the financial sector, or establishments of such companies Privatisations that are administered by the Serbian Privatization
by Serbian banks, also require prior approval by the NBS Agency can be subject to the Competition Act provided that they
pursuant to Article 7(4) of the Banks Act. meet the turnover thresholds.
Insurance: Direct or indirect acquisitions of a qualified The Bankruptcy Act provides that acquisitions of control via
shareholding (i.e. 10%, 20%, 33%, 50% and above 66%) in
bankruptcy proceedings as well as bankruptcy restructurings may
Serbian insurance companies require prior approval by the
NBS - Articles 30 and 32 of the Insurance Act (Official not be performed contrary to the Competition Act. Thus, such
Gazette of the Republic of Serbia, nos. 55/04, 70/04, 61/05, acquisitions of control and restructuring plans are subject to control
85/05, 101/07, 63/09,107/09, and 99/11). by the Commission. Should it find that an intended restructuring
Investment funds: Direct or indirect acquisitions of a shall give rise to change of control, and subject to prescribed
qualified shareholding (10% or more) require the prior thresholds, it shall instruct the parties to file a merger notification.
approval by the Securities Exchange Commission - Article
11 of the Investment Funds Act (Official Gazette of the
2.2 Can the acquisition of a minority shareholding amount to
Republic of Serbia, nos. 46/06, 51/09 and 31/11).
a merger?
Voluntary pension funds: Direct or indirect acquisitions of a
qualified shareholding (10% or more) can be made only on
Yes, provided that the acquisition of a minority shareholding
the basis of a prior approval by the NBS - Article 14 of the
confers (sole or joint) de facto or de jure control over the target on
Voluntary Pension Funds and Pension Schemes Act (Official
Gazette of the Republic of Serbia, nos. 85/05 and 31/11). the acquiring undertakings (see also question 2.1).
Media: The Broadcasting Act (Official Gazette of the As stated under question 2.1, an undertaking is deemed to have
Republic of Serbia, nos. 42/02, 97/04, 76/05, 79/05, 62/06, control over another undertaking if it has the possibility to exercise
85/06, 86/06, and 41/2009) contains provisions under which decisive influence on the latters activities. Such influence is not
circumstances a concentration in the media sector can be limited to ownership rights, but also includes influence deriving
prohibited. from an agreement, securities, receivables, a controlling interest or
Telecommunication: Change of control clauses contained in any other factor which allow that decisive influence be exercised
issued telecom licences pursuant to the Telecommunications over business activities.
Act (Official Gazette of the Republic of Serbia, nos. 44/03,
Pursuant to the Commissions opinion no. 1/0-06-409/09-2 dated 11
36/03, 50/09, 27/10, and 44/10) might require prior consent
of the Serbian Agency for Telecommunications for certain November 2009, effective control over a company includes a
qualified transfers of shares in the telecom operators. possibility to independently deliver the most important/strategic
Public-Private Partnerships and Concessions: Pursuant to business decisions, a possibility to independently dispose of assets
the Public-Private Partnerships and Concessions Act of a greater value, and holding of veto rights that are not limited
(Official Gazette of the Republic of Serbia, no. 88/11) rights exclusively to the protection of its investors interests.
stipulated by PPPCs may be transferred to third parties only
upon prior approval of the public partner.
2.3 Are joint ventures subject to merger control?

2 Transactions Caught by Merger Control Yes, joint ventures are subject to merger control. However, only
Legislation certain joint ventures are subject to merger control, i.e. when two or
more independent undertakings establish a new undertaking, or
when they acquire joint control over an existing undertaking, which
2.1 Which types of transaction are caught in particular, how operates on a lasting basis and has all the functions of an
is the concept of control defined?
independent undertaking (i.e. full-function joint ventures) and
which does not purport to coordinate the market activities of the
The Competition Act catches the following types of transactions:
independent undertakings acquiring control.
mergers and other status changes leading to acquisitions of
However, if the establishment of a joint venture purports to
undertakings;
coordinate the market activities of two or more independent
acquisitions by one (sole control) or more (joint control)
undertakings, the joint venture is not deemed a concentration but
undertakings of direct or indirect control over another
undertaking or undertakings; and shall be assessed under rules regulating restrictive agreements.
establishments of joint ventures or acquisitions of joint
control over existing undertakings, performing on a long- 2.4 What are the jurisdictional thresholds for application of
term basis all functions of an autonomous undertaking. merger control?
An undertaking is deemed to have control over another undertaking
if it has the possibility to exercise decisive influence on the latters Under the Competition Act a transaction has to be notified if either
activities. Such influence can be based on: (i) a controlling of the following thresholds is met:

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the aggregate annual worldwide revenue of all the territory of Serbia. However, the decisional practice so far is not
undertakings concerned in the year preceding the supporting the view that a transaction, besides meeting the
concentration is at least EUR 100 million, provided that at jurisdictional thresholds, also needs to have an effect on
least one of the undertakings concerned achieved a national competition in Serbia in order to trigger a filing obligation. Hence,
revenue of at least EUR 10 million; or
foreign-to-foreign transactions that meet the jurisdictional
the aggregate national revenue of at least two undertakings thresholds of the Competition Act trigger a filing obligation in
concerned is at least EUR 20 million and at least each of the Serbia.

Serbia
two undertakings concerned achieved a national revenue of
at least EUR 1 million in the year preceding the
concentration. 2.7 Please describe any mechanisms whereby the operation
The Competition Act provides for special rules regarding takeovers of the jurisdictional thresholds may be overridden by other
of joint stock companies registered in the Republic of Serbia whose provisions.
shares are listed. Any takeover bid for such a company has to be
notified to the Commission irrespective of whether the revenue There are no mechanisms which provide for the jurisdictional
thresholds are met. thresholds to be overridden. However, the applicability of the
sector-specific regulation outlined in question 1.4 does not require
Revenue means all revenues derived from the sale of products or
the turnover thresholds stipulated in the Competition Act to be met.
the provision of services in the preceding year after deduction of (i)
Direct or indirect acquisitions of qualified shareholdings in certain
excise duties, and (ii) intra-group sales. For the calculation of the
sectors in principle require approval of the competent regulator,
domestic revenue, in addition to the above, the value of exports out
irrespective of the aggregate turnovers of the parties to the
of Serbia has to be deducted. According to the Commissions
concentration. However, if the jurisdictional thresholds are
opinion published in its 2010 Annual Report, revenues achieved in
exceeded, merger clearance is also required in addition to the
Kosovo are considered revenues achieved in the Republic of Serbia,
approval of the sector-specific regulator. In addition, as explained
pursuant to the Constitution of the Republic of Serbia. Thus,
under question 2.4, a concentration arising from the takeover of a
revenues achieved in Kosovo are to be taken into account for the
Serbian joint stock company has to be notified even if the
calculations of turnovers achieved in the Republic of Serbia.
thresholds are not met.
Turnovers are calculated by taking into account all revenues
derived from the sale of products or provision of services in the year
2.8 Where a merger takes place in stages, what principles
preceding the year in which the concentration is notified, after the
are applied in order to identify whether the various stages
deduction of exercise duties. The turnover of an undertaking
constitute a single transaction or a series of transactions?
assumes the total turnover of the group it belongs to, save for intra-
group sales which are not taken into account. For the calculation of
In practice, when an acquisition of a stake in the target company is
local (national) turnover, in addition to the foregoing, the value of
performed in several stages - the notification obligation is triggered
exports has to be deducted. If control is acquired over part of an
at the moment of acquisition of the share that allows the acquirer to
undertaking, only the turnover attributable to that part is to be taken
exercise decisive influence over the targets business activities, i.e.
into account. In case of joint ventures, total group turnovers of both
when an acquirer has established control over the target. This has
joint venture partners are to be taken into account.
also been confirmed by the Commissions opinion dated 11
Special rules for the calculation of revenue apply to banks, credit November 2009. Pre-existing as well as subsequent acquisitions of
institutions, financial entities and insurance companies. As regards shares in the same target do not trigger (additional) filing
banks, credit institutions and financial companies, the relevant obligation(s). Two or more transactions between the same
revenue shall consist of the income from interest charged, net undertakings realised in a period of less than two years shall be
profits from financial transactions, commissions charged, income deemed as one concentration that occurred on the date of the last of
from securities, and of income from other business activities. such consecutive transaction.
Regarding insurance companies, the turnover thresholds are
calculated by taking the value of net income from premiums into
account. 3 Notification and its Impact on the Transaction
Timetable
2.5 Does merger control apply in the absence of a
substantive overlap? 3.1 Where the jurisdictional thresholds are met, is notification
compulsory and is there a deadline for notification?
Yes. The applicability of merger control rules does not require the
existence of a substantive overlap. The only criterion for the Notification is compulsory when the thresholds set by the
applicability of merger control rules is the fulfilment of one of the Competition Act are met (please see question 2.4 above), as in the
turnover thresholds outlined in question 2.4 above. case of takeover bids for Serbia joint stock companies, save for
certain exceptions (please see question 3.2 below).
2.6 In what circumstances is it likely that transactions A concentration has to be notified within 15 days following any of
between parties outside Serbia (foreign-to-foreign the following acts, whichever occurs first: (i) conclusion of an
transactions) would be caught by your merger control agreement; (ii) publication of a public bid or an offer or closing of
legislation? the bid; or (iii) the acquisition of control.
Parties to a transaction may notify it to the Commission as soon as
Any foreign-to-foreign merger is subject to merger control in Serbia they can demonstrate their serious intent to enter into an agreement,
if the jurisdictional thresholds are met. A domestic effects doctrine e.g. by signing a letter of intent, publicising their intent to make an
has not yet been adopted by the Commission, although Article 2 of offer or by any other way which precedes any of the triggering
the Competition Act provides that the Competition Act applies to events mentioned (please see question 3.1 above).
acts which have or might have effects on competition in the

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However, the parties may notify a transaction to the Commission measures). These measures have to be proportionate to the
even before one of the abovementioned events if they demonstrate competition infringement and in direct relation with acts or
their serious intent to enter into an agreement, e.g. by signing a practices which caused such infringement. In case significant
letter of intent, publicising their intent to make an offer or any danger of repeating the same or similar competition infringement is
similar act. determined as a result of the structure of the undertaking, the
On 11 November 2009, the Commission issued an opinion Commission can order a measure to change the structure of the
clarifying that the bidder might opt to file the merger notification undertaking, aiming to eliminate such danger, i.e. to re-establish the
Serbia

within 15 days following either the announcement of the bid or the structure as it existed before the infringement was established (i.e.
closing of the takeover bid. The deadline for filing a merger structural measure).
notification is therefore 15 days following the closing of the Structural measures are issued if there are no conditions to issue
takeover bid, while the earliest moment can be any action equally or similarly effective behavioural measures or if
undertaken by the parties that may prove their serious intent to behavioural measures would create a disproportionate burden.
execute the transaction. Structural measures may require divestiture of an undertaking,
Under the Competition Act, if control over the whole or part of one particularly through sale of the parts of an undertaking or its
or more undertakings is acquired by another undertaking, the property to other undertakings that are not related to the
notification has to be submitted by the undertaking acquiring undertaking concerned.
control. In all other cases, the notification has to be submitted Local practice concerning fines in merger control proceedings has
jointly by the undertakings concerned. not advanced much, primarily because the Commission was not
previously vested the power to impose fines but had to apply to a
court for the infringement to be sanctioned. The Competition Act,
3.2 Please describe any exceptions where, even though the
jurisdictional thresholds are met, clearance is not
currently in place, empowers the Commission to impose sanctions
required. directly and also expands the range of consequences for breaching
the suspension clause. Besides fines, civil sanction of nullity and
Under the Competition Act, a concentration does not arise and thus interim measures, the Commission now may also order a de-merger.
no merger control notification is required - even if the turnover
thresholds are met - if: 3.4 Is it possible to carve out local completion of a merger to
a bank or another financial institution or an insurance avoid delaying global completion?
company temporarily acquires shares for further resale to be
realised within a period of 12 months (with possible Participants to a concentration are under the obligation to suspend
extension of 6 months) and provided that during this period the implementation of a transaction until clearance is issued. Hold-
the shareholders rights are not used to influence business separate agreements have not yet been tested with the Commission.
decisions of the respective undertaking that concern its
It is likely that the Commission will initially take a conservative
conduct on the market;
approach to carve-out mechanisms. One of the carve-out structures
an investment fund or a company in charge of managing an that might be permitted is to make use of the financial institution
investment fund acquires a stake in an undertaking, provided
exception (see above question 3.2) by engaging a bank as an interim
that it utilises its rights stemming from that stake only to
maintain the value of its investment and under the condition buyer of shares of the group company concerned. However,
that it does not influence the behaviour of that undertaking in acquisitions of companies by local banks are subject to control by
the market; the NBS pursuant to the Law on Banks.
an establishment of the joint venture that purports to
coordinate the market activities of two or more independent 3.5 At what stage in the transaction timetable can the
undertakings and cannot be considered for a full-function notification be filed?
joint venture (as it shall be assessed under rules regulating
restrictive agreements); or
Parties to a transaction may notify it to the Commission as soon as
control over an undertaking is acquired by persons acting as they can demonstrate their serious intent to enter into an agreement,
a bankruptcy receiver [steajni upravnik].
e.g. by signing a letter of intent, publicising their intent to make an
offer or by any other way which precedes any of the triggering
3.3 Where a merger technically requires notification and events (please see question 3.1 above).
clearance, what are the risks of not filing? Are there any
formal sanctions?
3.6 What is the timeframe for scrutiny of the merger by the
merger authority? What are the main stages in the
The Competition Act provides that parties that do not notify a
regulatory process? Can the timeframe be suspended by
transaction timely face daily fines between EUR 500-5,000 (fines the authority?
are capped at 10% of the total turnover achieved by the undertaking
concerned). Fines for breach of the suspension clause (see question Under the Competition Act, the Commission is obliged to decide
3.7 below) may amount to 10% of the total annual turnover realised within one month from the receipt of a complete merger notification
by the undertakings involved in the last financial year. whether to clear the transaction in summary proceedings (Phase I) or
Furthermore, the Competition Act contains provisions which grant to initiate investigation proceedings (Phase II). In order for a merger
the Commission the right to enact measures (structural or notification to be deemed complete, it has to satisfy the conditions
behavioural) in order to remove or prevent infringements of prescribed by the Competition Act and the applicable Ordinance, in
competition. The Commission may issue measures aimed at regard of both required content and manner of submission.
removal of competition infringement, i.e. prevention of possibility Summary proceedings are initiated if it can be reasonably expected
for creation of the same or similar infringement, by ordering certain that the concentration will not significantly restrict, distort or
actions to be taken or prohibiting certain behaviour (i.e. behavioural prevent competition in the Republic of Serbia. If the Commission

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does not take a decision (clear the concentration in summary The Commission is empowered to request any other information it
proceedings or open investigation proceedings) within 1 month, the considers relevant for the assessment of the intended concentration.
concentration is deemed cleared. However, should the Commission Similarly, the applicant may submit other information and
decide to open investigation proceedings, it has to decide ultimately documents that it considers relevant for the assessment of the
whether to clear or prohibit the transaction within three months envisaged concentration.
from the date of initiating investigative proceedings.

Serbia
3.9 Is there a short form or accelerated procedure for any
3.7 Is there any prohibition on completing the transaction types of mergers? Are there any informal ways in which
before clearance is received or any compulsory waiting the clearance timetable can be speeded up?
period has ended? What are the risks in completing
before clearance is received? There is no short-form procedure for any types of mergers. The
Implementing Ordinance prescribes only one type of the format in
The undertakings concerned are under the obligation to suspend the which the merger notification shall be submitted to the
implementation of the transaction until clearance is issued. Under Commission, regardless of whether it is requested and/or whether
the Competition Act a concentration is deemed cleared if the the Commission will decide in summary or investigation
Commission fails to deliver a decision within 1 month following proceedings. Please see question 3.6.
receipt of a complete merger notification (i.e. within additional 3 The only way to speed up the clearance timetable is to supply the
months following the initiation of investigative proceedings). Commission with a notification that is as detailed as possible, in
The Competition Act provides one exemption from the general accordance with relevant rules applicable to the contents of
suspension requirement. This rule applies in case of acquisitions notifications (please see question 3.8 above).
which are performed in line with laws regulating takeovers of the
joint stock companies or in accordance with laws regulating
3.10 Who is responsible for making the notification and are
privatisations. The implementation of the transaction is permitted
there any filing fees?
although not (yet) cleared only under the following conditions: (i)
the filing has been made in a timely manner; (ii) the acquirer will
Under the Competition Act, if control over the whole or part of one
not influence the decision-making of the company based on its
or more undertakings is acquired by another undertaking, the
shareholding (unless it is directed towards maintaining the value of
notification has to be submitted by the undertaking acquiring
its investment); and (iii) the special approval from the
control. In all other cases, the notification has to be submitted
Commission has been obtained.
jointly by the undertakings concerned.
Fines for pre-implementation of a merger may range up to 10% of
For clearance issued in summary (Phase I) proceedings a fee has to
the total annual turnover realised by the undertakings involved in
be paid in the amount of 0.03% of the aggregate annual turnover of
the last financial year. So far, the Commission has not imposed any
the undertakings concerned (capped at EUR 25,000). For clearance
fines in this respect.
decisions in investigation (Phase II) proceedings the fee is 0.07% of
The transaction agreement relating to the acquisition of interest in the aggregate annual turnover of the undertakings concerned
the target company (and all measures bringing about the (capped at EUR 50,000).
transaction) is exposed to a sanction of nullity (although such
The fee shall be paid within three days following the submission of
nullity would presumably be limited only to the territory of the
merger notification. The notifying parties also have to submit a
Republic of Serbia, however, there are no rules or developed
payment confirmation to the Commission.
practice in this respect). The Competition Act further contains
provisions which grant the Commission the right to enact measures
(as structural or behavioural measure) in order to assure compliance 3.11 What impact, if any, do rules governing a public offer for a
with the competition rules. These measures have to be listed business have on the merger control clearance
proportionate to the damage caused by the uncompetitive behaviour process in such cases?
of the undertaking concerned. The Government is yet to adopt the
guidance on the implementation of the structural and behavioural The Competition Act provides for special rules regarding takeovers
measures. However, the most powerful tool in hand of the of joint stock companies registered in the Republic of Serbia whose
Commission is a sanction of de-concentration of transactions shares are listed. Any takeover bid for such a company has to be
which have been implemented prior to clearance. It can take a form notified to the Commission irrespective of whether the revenue
of spin-off of the undertaking concerned, termination of an thresholds are met.
agreement, obligation to sell the shares, etc. A concentration brought about by a public offer has to be notified
within 15 days following the publication of a public bid or an offer
or closing of the bid, whichever occurs first. In its opinion dated 11
3.8 Where notification is required, is there a prescribed
November 2009, the Commission clarified that the bidder might opt
format?
to file the merger notification within 15 days following either the
announcement of the bid or the closing of the takeover bid. The
Notwithstanding the Competition Act, the form and content of
deadline for filing a merger notification is therefore 15 days
notification is governed by the Ordinance on Content and the Manner
following the closing of the takeover bid, while the earliest moment
of Submission of Merger Notifications (Official Gazette of the
can be any action undertaken by the parties that may prove their
Republic of Serbia, no. 89/2009; the Implementing Ordinance). serious intent to execute the transaction.
The merger notification shall be submitted in the Serbian language. Furthermore, in case of acquisitions which are performed in line
In general, all documents in foreign language shall be submitted with laws regulating takeovers of joint stock companies, the
notarised and, where necessary, super-legalised along with the acquisition may be performed, although not (yet) cleared, under the
translation by a sworn court interpreter into Serbian. However, the following conditions: (i) the filing has been made in a timely
formal requirements are not strictly observed by the Commission. manner; (ii) the acquirer will not influence the decision making of

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the company based on its shareholding (unless it is directed towards further guidance as to what consumer interests are. Nonetheless,
maintaining the value of its investment); and (iii) the special pursuant to Article 2 point 23 of the Ordinance on the Content and
approval from the Commission has been obtained. Manner of Submitting a Merger Notification, a detailed explanation
of expected benefits to consumers resulting from the concentration
has to be provided in the merger notification, with particular
3.12 Will the notification be published?
reference to benefits such as lower prices, improved quality, wider
choice and innovations. Thus, a legal basis for the Commission to
Serbia

The notification, or its respective parts, shall not be published.


take into account efficiencies when assessing mergers is in place,
However, the Commission shall publish (i) its conclusions on
although there are no further guidelines as to how efficiencies will
initiating investigative (Phase II) proceedings, as well as (ii) the
be weighed against potential anti-competitive effects.
operative part of its (final) decisions. They shall be published in the
Official Gazette of the Republic of Serbia, as well as on the Efficiency considerations can also be seen in the decisional practice
Commissions website (www.kzk.org.rs). of the Commission, as it analyses possible efficiencies resulting
from the concentration in its decisions. However, to the best of our
knowledge, significant attempts to substantiate and/or quantify
4 Substantive Assessment of the Merger and efficiencies have not yet been undertaken by the Commission.
Outcome of the Process
4.3 Are non-competition issues taken into account in
4.1 What is the substantive test against which a merger will assessing the merger?
be assessed?
No. The Competition Act and applicable bylaws are not concerned
In appraising a concentration, the Commission makes a prospective with non-competition issues nor are they given a prominent role in
analysis of whether the concentration would cause a significant merger analysis, although they may be reflected upon by the
restriction, distortion or prevention of competition, particularly as a Commission in the course of review.
result of the creating or strengthening of a dominant position.
When carrying out the appraisal, the Commission will take into
4.4 What is the scope for the involvement of third parties (or
account the following factors:
complainants) in the regulatory scrutiny process?
structure of the relevant market;
existing and potential competitors; The Competition Act provides that the Commission shall publish its
market position of undertakings involved in the conclusions on initiating investigative (Phase II) proceedings in the
concentration and their economic and financial power; Official Gazette of the Republic of Serbia and on the Commissions
freedom of choice when choosing suppliers and consumers; website. Although the matter is not regulated further by the
legal and other market entry barriers; Competition Act or bylaws, third parties can provide the
the level of competitiveness of the undertakings involved in Commission with information, data and opinions relevant for the
the concentration; transaction under review. Furthermore, third parties that prove their
legal interest may get involved in the regulatory scrutiny process
trends of supply and demand of relevant goods and/or
services; and request access to certain (non-confidential) information that has
been submitted to the Commission.
trends of technical and economic development; and
consumers interests.
4.5 What information gathering powers does the regulator
In the Victoria Group/Soja Protein decision [case number not
enjoy in relation to the scrutiny of a merger?
available] which was rendered in Phase II, the Commission after
assessing entry barriers, the choice of suppliers available to
In the case of an investigation procedure being initiated, the
customers of the merged entity, low transaction costs, and the
Commission has various investigative powers. The Commission is
incentives and possibilities of the parties to foreclose competitors,
entitled to request documentation and data, statements from the
concluded that the transaction shall not lead to significant negative
parties, witnesses, experts, inspections and interim measures.
effects, although it did strengthen an existing dominant position in
the market. In the Fresenius Medical Care/Incentive Aktiebolag Furthermore, the Competition Act provides that parties that do not
(Gambro) decision [case number not available] which was also comply with a request to provide documentation and/or data face daily
rendered in Phase II, the Commission, with particular reference to fines (procedural penalties) of between EUR 500-5,000 (capped at
the large market share of a competitor of the post-merger entity, 10% of the total turnover achieved by the undertaking concerned).
found that the transaction shall not lead to significant anti- The Commission imposed such fines for the first time in 2011, in
competitive effects although it did further strengthen an existing the Dehaize/Delta Maxi case, where it imposed fines on three
dominant position in the market. The Commission also took into undertakings (Veropoulos SuperVero, CDE S and KTC) that
account the claim by the parties that the merger should result in failed to comply with the Commissions request to provide certain
lower prices and greater choice for consumers. data for the purpose of the merger review. By way of example,
Veropoulos SuperVero was fined EUR 26,500 for 53 days of
delay, a decision subsequently upheld by the Administrative Court.
4.2 To what extent are efficiency considerations taken into
account?
4.6 During the regulatory process, what provision is there for
The Competition Act foresees that protection of competition shall the protection of commercially sensitive information?
be ensured to the benefit of consumers. Furthermore, when
assessing concentrations, attention shall be paid to interests of On request by the parties to the concentration or third parties who
consumers. However, the Competition Act does not provide provided certain information for the purpose of merger review, a

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measure by which the source of data or the data itself shall be allows for both behavioural and structural measures. If the
declared confidential may be imposed by the president of the Commission is of view that such measures are sufficient and as a
Commission. In order for the source or the data to be declared result of them the concentration shall not restrict, distort or prevent
confidential, two conditions have to be satisfied: (i) the interest of competition, it shall clear the concentration subject to conditions.
the party demanding confidentiality has to outweigh the interest of The terms and conditions under which the concentration shall be
the public to have that source or data non-confidential; and (ii) the cleared, as well as methods of monitoring/supervision of their
party demanding confidentiality has to prove as probable that implementation, shall be stipulated in the clearance.

Serbia
damages might occur if the source or the data are revealed.
In any case, it is advisable that confidential data be designated as
5.3 To what extent have remedies been imposed in foreign-
such from the outset by the participant to the concentration in the to-foreign mergers?
merger notification itself, as well as that all submissions (and in
particular merger notifications) be submitted together with non-
Remedies in terms of foreign-to-foreign mergers have been
confidential versions of those submissions.
imposed only exceptionally. By way of example, behavioural
The parties have the right to access the Commissions file and make remedies have been imposed in the Lufthansa/Austrian Airlines
copies of certain documents; however, records on voting, official case (Commission Decision no. 6/0-02-114/09), where the merged
reports and draft decisions, records labelled as confidential, as well entity was obliged to maintain the existing code-share arrangement
as data designated as confidential cannot be accessed. The entered into between JAT Airways and Austrian Airlines AG on the
Competition Act provides that third parties that prove their legal BelgradeVienna route and to refrain from increasing prices of
interest to be informed about the current state of a proceeding may tickets on that route. No structural remedies have been imposed in
be provided with such information. case of foreign-to-foreign mergers.
In practice so far, the Commission rarely publishes whole decisions
but only the operative part of its decisions. However, on several 5.4 At what stage in the process can the negotiation of
occasions (in high profile cases and under the rules of the previous remedies be commenced? Please describe any relevant
merger control regime which is not in force as of 1 November 2009) procedural steps and deadlines.
the Commission published whole decisions, some of which without
omitting data which might be considered confidential (i.e. If the Commission concludes that the notified concentration shall
transaction details, market shares, shareholdings, turnovers, etc.; restrict, distort or prevent competition, it shall issue a statement of
see e.g. Commission Decision no. 6/0-02-138/07-15 in the case objections to the parties to the concentration in order to notify them
Primer C/C Market). of the facts and conditions on which it intends to base its decision.
Letters, notices and all other forms of communication between the In their answer to the Commission, the parties to the concentration
parties and their attorneys, directly relating to the procedure itself, may suggest measures to be undertaken with the goal to remove any
shall be considered as privileged communication. In case there is anti-competitive concerns. However, although the Competition Act
doubt that such privileged communication is used in an abusive suggests that remedies are offered only once the Commission has
manner, the president of the Commission may inspect the contents notified the parties that it intends to prohibit the concentration, we
of such communication, and if required, may withdraw the are of opinion that remedies could be offered from the outset of the
privileged status in its certain aspects. merger review process.

5 The End of the Process: Remedies, Appeals 5.5 If a divestment remedy is required, does the merger
authority have a standard approach to the terms and
and Enforcement
conditions to be applied to the divestment?

5.1 How does the regulatory process end? The Competition Act expressly provides that the Commission may
require divestment as a remedy. However, it does not regulate in
Pursuant to the Competition Act, the Commission may either: detail how it shall approach the terms and conditions to be applied
reject the notification if the jurisdictional thresholds are not to the divestment and relevant guidelines in this respect are yet to
met or the notified transaction is not a concentration in terms be adopted.
of merger control rules; The Competition Act provides that remedies need to be
cease the procedure if the notification is withdrawn; proportionate and directly aimed at the competitive concern they
clear the concentration unconditionally; aim to remedy. As a general proposition, structural remedies shall
clear the concentration subject to conditions; or be required if no equally effective behavioural remedy may be
prohibit the concentration. imposed, or if a behavioural remedy would be a greater burden on
the parties to the concentration than a structural remedy.
To the best of our knowledge, no divestment remedies have yet
5.2 Where competition problems are identified, is it possible
been imposed by the Commission.
to negotiate remedies which are acceptable to the
parties?
5.6 Can the parties complete the merger before the remedies
Yes. If the Commission concludes that the notified concentration have been complied with?
shall restrict, distort or prevent competition, it shall issue a
statement of objections to the parties to the concentration in order The parties are obliged to act in accordance with the Commissions
to notify them of the facts and conditions on which it intends to base decision. The Commission may approve a concentration subject to
its decision. In their answer to the Commission, the parties to the conditions specifying the manner in which those conditions shall be
concentration may suggest measures to be undertaken with the goal performed and the applicable deadlines. If the conditions are not
to remove any anti-competitive concerns. The Competition Act fullfilled, the Commission may impose measures required for the

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restoration or maintenance of competition on the relevant market; The Competition Act fails to provide a list of persons who can lodge
also the Commission may reassess the concentration. an appeal against a decision of the Commission. According to the
Law on Administrative Disputes, the following list of persons are
entitled to lodge the claim: (i) the parties to the transaction; (ii) an
5.7 How are any negotiated remedies enforced?
interested third party or public body if it can be the holder of any
right deriving from the decision; and (iii) a competent authority in
Pursuant to the Competition Act, negotiated remedies may be
case that the decision infringes the law.
Serbia

enforced in two ways. Firstly, if parties to a concentration fail to


implement the negotiated remedies, the Commission may revoke its Lodging an appeal does not postpone the enforcement of the
conditional clearance. Secondly, failure to comply with negotiated decision. Upon request by the parties, the Commission may
remedies may entail fines for the undertaking in violation in the postpone the enforcement of its decision at the request of the
amount of up to 10% of the total annual turnover in the financial undertaking concerned until the decision of the Administrative
year preceding the violation. Court becomes final. Such request is permissible if the
enforcement of the Commissions decision would cause irreparable
In the course of 2009, the Commission issued two conditional
damage to the plaintiff, in particular if it could most likely lead to
clearances. In one, the acquirer Delta Maxi d.o.o. (the company
its bankruptcy or cause termination of business activities of the
involved in food retail) acquired control (i.e. 72.9355% share) over
appellant, provided that such postponement is not against public
TP Srbija a.d. which owns numerous business premises through the
interest.
city of Kragujevac. The Commission imposed an obligation on
Delta Maxi d.o.o. to maintain the lease agreements of TP Srbija a.d.
and to report to the Commission any annex to these agreements for 5.10 What is the time limit for any appeal?
the next three years. The purpose of this measure was that the
competition on the food retail market is preserved and that Detla The time limit for appeal is 30 days from the day of receipt of a
Maxi d.o.o. is prevented from acquiring a market share over 40% in decision.
the territory of Kragujevac.
The second conditional clearance relates to the Lufthansa AG and 5.11 Is there a time limit for enforcement of merger control
Austria Airlines AG merger (Commission Decision no. 6/0-02- legislation?
114/09 in the case Lufthansa/Austrian Airlines). The merger entity
was obliged to maintain the existing code-share arrangement Pursuant to the Competition Act, the time limit for determining and
entered into between JAT Airways and Austrian Airlines AG on the imposing fines (for pre-implementation of concentration or failure
BelgradeVienna route and to refrain from increasing prices of to comply with conditional clearance) is three years following the
airplane tickets on that route. In case that an increase in prices is infringement, while only one year for imposing procedural
required, the Commission needs to approve the new pricelist. penalties.
Remedies were not accepted by the Commission in the intended
Sunoko/Hellenic Sugar merger, which was ultimately prohibited by
6 Miscellaneous
the Commission (Commission Decision no. 6/0-02-18/2012-3 dated
19 January 2012). The concentration would have been brought
about by the acquisition of Hellenic Sugar Industry S.A., a Greek 6.1 To what extent does the merger authority in Serbia liaise
producer of sugar with production plants in Serbia, by Sunoko with those in other jurisdictions?
d.o.o., a Serbian producer of sugar. As a result of the concentration,
the number of market participants on the Serbian sugar production The Commission is a member of the International Competition
market (from sugar beet) would have been reduced from three to Network and it participates in the OECD Regional Initiative on
two, with the post-merger entity having a market share of almost Competition Law and Policy in SEE and in the SEE Competition
80%. In the course of the review, Sunoko submitted two remedy Authorities Network. The Commission has recently also started
proposals with a view to facilitate a conditional clearance of the cooperating with the United Nations Commission on Trade and
intended concentration. The proposed remedies comprised both Development on competition policy.
structural (divestment of a part of business activities) and However, of particular interest to the Commission is its relationship
behavioural measures (price adjustments), but were not ultimately with the DG Competition of the EU Commission. The relationship
accepted by the Commission. is primarily based on the Stabilization and Association Agreement
signed between Serbia and the EU and its Member States. Pursuant
5.8 Will a clearance decision cover ancillary restrictions? to the agreement, the Commission is, inter alia, under obligation to
take into account relevant EU rules and developments when
Neither the Competition Act nor any bylaws regulate the issue of resolving cases, as well as report to the EU Commission on
ancillary restraints. To the best of our knowledge, the Commission legislative and enforcement efforts.
has not dealt with the issue of ancillary restraints in its case law. The Commission also cooperates with foreign competition
However, at the same time, there is nothing to prevent the authorities, i.e. the competition authorities of Austria, Albania,
Commission from also clearing ancillary restraints in its decisions. Bosnia and Herzegovina, Croatia, Hungary, Kazakhstan,
Nonetheless, such restraints can at the request of the parties be Macedonia, Montenegro, Slovenia and Russia.
individually exempt from prohibition by the Commission in On national level, the Commission shares information with a
separate proceedings. number of authorities whose work might have effects on
competition, or on the application of competition rules: the Agency
5.9 Can a decision on merger clearance be appealed? for Telecommunications; the Energy Agency; the Anti-corruption
Agency; the Agency for the Prevention of Money Laundering; the
Yes. Merger control decisions of the Commission can be appealed Agency for Pharmaceuticals; the Commission for the Control of
before the Administrative Court. State Aid; and the Serbian Chamber of Commerce, etc.

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Besides such cooperation (information-flow), the Commission has 6.2 Are there any proposals for reform of the merger control
signed cooperation agreements with the National Bank of Serbia, regime in Serbia?
the Agency for Telecommunications and the Energy Agency, while
a cooperation agreement with the Central Securities Depository and There are currently no proposals for reform of the merger control
Clearing House is still in draft phase. regime in Serbia.
The cooperation agreement with the National Bank of Serbia, as the
supervisory body of all financial institutions, addresses the full

Serbia
6.3 Please identify the date as at which your answers are up
disclosure of available information (including confidential to date.
information) and sets out the obligation on the National Bank of
Serbia and the Commission to notify each other on any 18 September 2012.
infringement conducted in the financial sector of the Republic of
Serbia. The institutions have undertaken to provide each other with
all necessary support for gathering the required data.

Srana Petronijevi Matija Vojnovi


Moravevi Vojnovi Zdravkovi Moravevi Vojnovi Zdravkovi
in cooperation with Schoenherr in cooperation with Schoenherr
Francuska 27 Francuska 27
11000 Belgrade 11000 Belgrade
Serbia Serbia

Tel: +381 11 320 2600 Tel: +381 11 320 2600


Fax: +381 11 320 2610 Fax: +381 11 320 2610
Email: s.petronijevic@schoenherr.rs Email: m.vojnovic@schoenherr.rs
URL: www.schoenherr.rs, www.schoenherr.eu URL: www.schoenherr.rs, www.schoenherr.eu

Srana Petronijevi is a partner (Serbia) with Moravevi Matija Vojnovi is a partner with Moravevi Vojnovi Zdravkovi
Vojnovi Zdravkovi in cooperation with Schoenherr where she in cooperation with Schoenherr specialising in M&A, projects,
heads up the firms competition and white collar crime practice. finance, and capital markets. As head of the corporate/M&A
She has been involved in numerous high-profile merger control team, Matija acts as the first point of contact for international
proceedings before the Serbian competition authorities and clients. He is frequently engaged in Serbia, Montenegro, and
coordinated global merger control filings, particularly in the former Bosnia in different sectors and regulated industries, including
republics of Yugoslavia. In addition, she advises clients on all energy, infrastructure, insurance, financial services,
aspects of antitrust law. She has designed a number of telecommunications, IT, media, and pharmaceutical industry.
compliance programmes for our larger corporate clients, tailor- Matija holds degrees from the University of Belgrade, Faculty of
made to their individual needs. Another of Sranas key tasks is Law (LL.B. 2001) and Central European University,
advising clients on all aspects of criminal compliance and white Budapest/Hungary (LL.M. in International Business Law, 2003).
collar crime matters in Serbia while also providing full coverage in
Bosnia and Herzegovina, Macedonia, Montenegro and Kosovo
via specialised country desks. Sranas client base is wide and
varied and covers the telecommunications, energy, insurance,
banking, construction, real estate, road development,
pharmaceutical, media and IT industries. Srana holds a LL.M.
in International Business Law.

Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr has been active on the Serbian market since 2002. The firms
practice is client-orientated, with specialised practice groups that provide industry-focused services to meet the demand of a
competitive, developing and rapidly changing marketplace.
In addition to the Serbian practice, Moravevi Vojnovi Zdravkovi in cooperation with Schoenherr is frequently engaged in
Bosnia and Herzegovina, Montenegro, Macedonia and Kosovo. The firms client list includes leading companies, financial
institutions, organisations and governments. The Belgrade office, via its specialised country desks, acts as a hub for Bosnia-
Herzegovina, Macedonia, Montenegro and Kosovo.
Schoenherr is a leading corporate law firm in Central and Eastern Europe, operating through offices in Belgrade, Bratislava,
Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna, Warsaw and Zagreb. Operating in a
rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of experienced lawyers and young
talent. Our comprehensive coverage of the region means we can offer solutions that perfectly fit the given industry, jurisdiction
and company.

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Chapter 46

Slovakia Martin Nedelka

Schoenherr Radovan Kub

1 Relevant Authorities and Legislation 1.3 Is there any other relevant legislation for foreign mergers?

There is no other relevant legislation for foreign mergers.


1.1 Who is/are the relevant merger authority(ies)?

The relevant merger authority in Slovakia is the Antimonopoly 1.4 Is there any other relevant legislation for mergers in
Office of the Slovak Republic (Protimonopoln rad Slovenskej particular sectors?
republiky) with its seat in Bratislava (the Office). The Offices
website is www.antimon.gov.sk. The merger regime set out in the Act applies across all sectors. For
transactions in the financial and banking sector, however, the
clearance of the National Bank of Slovakia might be required.
1.2 What is the merger legislation?

Slovak merger control legislation is set out in the Act on the 2 Transactions Caught by Merger Control
Protection of Competition (Act No. 136/2001; the Act), which Legislation
came into force on 1 May 2001 and was amended several times.
Since 1 May 2004, when Slovakia joined the EU, the Council
2.1 Which types of transaction are caught in particular, how
Regulation (EC) 139/2004 (the ECMR) regime applies to all
is the concept of control defined?
transactions notifiable in Slovakia that have a Community
Dimension.
Generally, the Act applies to the following types of concentrations:
In addition, there are two relevant Office decrees: Decree No. the merger of two or more previously independent
204/2009, on information required in the notification; and Decree undertakings, including situations where two undertakings
No. 294/2004 on turnover calculation. Certain aspects related to come under joint economic management, but remain
concentrations are described in the Offices notices; however, these separate legal entities (economic mergers);
are not binding legal acts. As of today, the Office has published the the acquisition of direct or indirect control of another
following notices on: (i) imposition of conditions and obligations in undertaking, enterprise or part thereof by one or more
concentrations; (ii) restrictions of competition relating directly to a persons already controlling at least one undertaking, either
concentration and essential for its realisation; (iii) participants to a by acquisition of shares or ownership interest, by an
concentration; and (iv) pre-notification merger procedures. agreement or by any other means, which enable the acquiring
undertaking(s) to control the acquired undertaking; or
In July 2011, the Office launched a public consultation concerning
changes in the Slovak merger control regime. The law amending the creation of joint control by more undertakings over
another undertaking, which brings durable changes in the
the merger regime was adopted on 19 October 2011 and has been in
structure of an undertaking and performs all functions of an
force as of 1 January 2012.
independent economic entity on a lasting basis.
The new merger control regulation, in line with the EU Merger
Control means the possibility of exercising decisive influence over
Regulation 139/2004, abandoned the dominance test as the
an undertaking especially by means of: (i) ownership rights or other
substantive test for a merger clearance and adopted the test of
rights to the undertaking or part thereof; or (ii) rights, contracts or
substantive impediment of effective competition. The jurisdictional
other facts allowing the exercise of a controlling influence on the
thresholds for application of the merger review have also been
composition, voting or decisions of the undertakings bodies. There
changed. New thresholds criteria reinforced the local nexus and a
is no precise shareholding or other test for decisive influence.
transaction is notifiable only if the target generates sales in
Every concentration is decided on its own facts and actual situation.
Slovakia.
Finally, the new merger control regulation substantially reduces the
2.2 Can the acquisition of a minority shareholding amount to
timeframe for the review in the first stage from 60 to 25 business days.
a merger?
The 25-day period, however, starts to run only after the notification is
complete. The amended merger control regime is still very
In case a minority shareholding could exercise de facto or de iure
formalistic, although it removes the requirement of notarised
decisive influence over an undertaking, such a concentration may
signatures on the power of attorney, and requires a large amount of
well amount to a merger. The Office would look at specific
supporting documentation and translation into the Slovak language.

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situations and assess whether the minority shareholder is conferred turnover thresholds, also involving foreign undertakings, are
with special voting or veto rights which amount to de iure decisive covered by the merger control.
influence on key business behaviour (e.g., investments, budget or
business plan) or appointment of the management. A minority
2.7 Please describe any mechanisms whereby the operation
shareholding may also exercise de facto decisive influence where of the jurisdictional thresholds may be overridden by other
the remaining shareholders are widely dispersed. provisions.

Slovakia
2.3 Are joint ventures subject to merger control? The ECMR has precedence over the national legislation and applies
to transactions that have a Community Dimension, in light of the
Fully-functional joint ventures, performing on a lasting basis, all one-stop-shop principle.
functions of an autonomous economic entity resulting in a
permanent structural market change, are subject to merger control. 2.8 Where a merger takes place in stages, what principles
Joint ventures whose purpose is to coordinate controlling parties are applied in order to identify whether the various stages
(non-fully-functional) are not considered as a merger, but they may constitute a single transaction or a series of transactions?
still be subject to the rules of the Act on restrictive practices.
If the same transaction is implemented in several steps or two or
more transactions that are not subject to the merger control are
2.4 What are the jurisdictional thresholds for application of
implemented among the same parties within a period of 2 years,
merger control?
these various stages constitute a single transaction and are assessed
as one concentration.
A concentration is subject to approval by the Office if:
the aggregate worldwide turnover of all parties to the
concentration exceeded EUR 46,000,000 in the last 3 Notification and its Impact on the Transaction
accounting period prior to the concentration and the turnover Timetable
of each of at least two of the parties to the concentration in
the last accounting period in the Slovak Republic exceeded
at least EUR 14,000,000; or 3.1 Where the jurisdictional thresholds are met, is notification
the aggregate turnover in the Slovak Republic, in the last compulsory and is there a deadline for notification?
accounting period of (a) at least one merging party, (b) the
party being acquired, or (c) at least one of the parties creating A concentration that meets turnover thresholds must be notified to
a joint venture exceeded EUR 14,000,000 and the aggregate the Office. There is no deadline for filing the notification, but the
worldwide turnover of the other party to the concentration transaction may not be implemented prior to clearance by the
exceeded EUR 46,000,000. Office. The transaction must be notified prior to its implementation
The aggregated turnover of the party to the concentration is and following:
comprised of the turnovers of: an agreement on which the concentration is based has been
the party to the concentration; concluded;
undertakings controlled directly or indirectly by the party to acceptance of a bid in a public tender is announced;
the concentration, i.e.: (i) holds more than half of the shares; a state authoritys decision is delivered to an undertaking
(ii) may exercise more than half of the voting rights; (iii) has (e.g., approval of financial authorities);
the right to appoint more than half of the members of the announcement of a takeover;
undertakings bodies; or (iv) has the right to manage the
undertaking concerned; the day when the European Commission informed an
undertaking that the transaction is subject to the Offices
undertakings controlling the party to the concentration; jurisdiction; or
all undertakings controlled by the same undertaking which the day when another fact giving rise to the concentration has
control the party to the concentration; and occurred.
all undertakings jointly controlled by two or more
The concentration could also be notified to the Office prior to the
undertakings listed above.
agreement on which the concentration is based, being concluded
For the purpose of calculation, turnover means the total of revenues, (pre-merger notification), or if another fact giving rise to the
yields or incomes from the sale of goods, including any financial concentration has occurred. In such a case the notification must
aid from public sources granted to the undertaking. also contain written reasoning and written documents certifying
essential facts for the concentration.
2.5 Does merger control apply in the absence of a Pre-notification contacts with the Office are also possible. Details
substantive overlap? of pre-notification contacts are specified in the Offices Guidelines
on pre-notifications contacts within the merger control.
Merger control also applies in the absence of an overlap.

3.2 Please describe any exceptions where, even though the


2.6 In what circumstances is it likely that transactions jurisdictional thresholds are met, clearance is not
between parties outside Slovakia (foreign-to-foreign required.
transactions) would be caught by your merger control
legislation? All transactions are subject to notification to the Office if the
transaction constitutes a concentration according to the Act and
The Act applies to all transactions that may have an impact on the turnover thresholds are met.
Slovak market. Since the turnover thresholds generated in Slovakia
are relevant for the merger review, all transactions which meet the

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3.3 Where a merger technically requires notification and Moreover, the prohibition does not prejudice the implementation of
clearance, what are the risks of not filing? Are there any a public bid, provided that the transaction is immediately notified to
formal sanctions? the Office and the acquirer does not exercise its voting right arising
in connection with the implementation.
If the parties failed to notify a notifiable transaction, the Office is
empowered to impose on the undertakings who failed to notify the
3.8 Where notification is required, is there a prescribed
Slovakia

transaction (i) a fine of up to 10% of its turnover during the last


format?
financial year, or (ii) a fine of up to EUR 330,000 to an undertaking
whose turnover does not exceed EUR 330 or does not generate any
The Act contains a list of general information which needs to be
turnover.
submitted to the Office:
Furthermore, the Office may also impose the obligation to restore
basic information about the parties to the concentration;
the level of competition that existed prior to the merger, especially
a demerger obligation or transfer of rights. description of the concentration;
information on capital, financial and personnel structure;
The issue of validity of the non-notified transaction has not been
settled. Although there is no case law in this respect, we believe information on affected markets;
that the validity of the transaction should not be questioned. information on entry to the market;
information on cooperation agreements;
3.4 Is it possible to carve out local completion of a merger to information on trade associations;
avoid delaying global completion? general market information;
information on cooperative effects of a joint venture;
There is no provision in the Act for an exemption of the prohibition reasons for and effects of the concentration and their impact
to implement the transaction prior to clearance by the Office. The on competition;
Act applies irrespective of all transactions which have an impact on underlying documentation; and
the Slovak market. In theory, it could be argued that if the Slovak
confirmation of payment of the administrative fee.
part can be strictly separated from the rest of the concentration, the
remaining part of the concentration could be implemented. Detailed information on each of the above-listed items is described
However, this approach has not been challenged before the Office in the Notice on requirements of the notification form (see question
or national courts. 1.2). The Notice also provides the structure of the notification, as
well as the order in which the required information needs to be
submitted. The notification must be made in Slovak.
3.5 At what stage in the transaction timetable can the
notification be filed? The Office may reduce the amount of information required from the
parties based on a justified request by the notifying party, but if the
A transaction may be notified, as mentioned in question 3.1, as soon information provided is not sufficient for a decision, it may request
as the undertakings can demonstrate that the legally binding additional information. This decision is fully at the discretion of the
documents have been signed or even prior to the agreement being Office.
concluded.
3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which
3.6 What is the timeframe for scrutiny of the merger by the
the clearance timetable can be speeded up?
merger authority? What are the main stages in the
regulatory process? Can the timeframe be suspended by
the authority? There is no short form or accelerated procedure in Slovakia. As
described in question 3.8, the Office, at the reasonable request of
The Office has 25 business days, upon submission of the the notifying party, may reduce the amount of information required;
notification, to assess the transaction. However, in complex matters however, it is solely at the discretion of the Office whether such a
that could give rise to competition concerns, this period may be reduction will be granted. The clearance timetable can be sped up
extended up to an additional 90 business days. The period does not by using the possibility of pre-notification contact with the Office
start to run until the notification filing is complete, i.e., it satisfies and discussing thoroughly the notification requirements of the
the scope and detail of information required by the Office. Office.

3.7 Is there any prohibition on completing the transaction 3.10 Who is responsible for making the notification and are
before clearance is received or any compulsory waiting there any filing fees?
period has ended? What are the risks in completing
before clearance is received? The notification has to be submitted:
in the case of a merger jointly by the merging parties;
As a general rule, the transaction must not be implemented prior to in the case of a public bid by the selected bidder;
clearance by the Office. Infringement of this ban may lead to fines
in the case of a decision issued by a state authority on a
of up to 10% of the turnover (for more details see question 3.3). merger jointly by the merging parties;
However, the Office may, at the request of the notifying party, grant
in case of a takeover bid by the bidder; and
an exemption on implementing the transaction prior to clearance if
there are serious reasons to this exemption. The Office has to in other cases by undertakings acquiring control over another
undertaking, enterprise or part thereof.
decide without undue delay, but no later than 30 business days from
the request. An exemption may be granted subject to conditions and The filing fee is EUR 3,319.
obligations in order to ensure effective competition.

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3.11 What impact, if any, do rules governing a public offer for a 4.5 What information gathering powers does the regulator
listed business have on the merger control clearance enjoy in relation to the scrutiny of a merger?
process in such cases?
The Office is entitled to require all information necessary for
The ban of not exercising the rights resulting from a concentration assessing the concentration, as well as reviewing and copying
before the clearance decision, shall not apply if the transaction is relevant documents from the parties to the concentration, third

Slovakia
realised through an acquisition bid or more transactions with parties or other public authorities. Moreover, the Office is
securities on the securities market provided that (i) such a empowered to enter the premises where business records may be
concentration is immediately notified to the Office, and (ii) the kept, including private homes.
acquirer does not exercise its voting rights connected with these If the parties submit incomplete or misleading information, the
securities, or it does so only in order to maintain the entire value of Office may impose a fine of up to EUR 330,000 or up to 1% of their
these investments. turnover from the last financial year.

3.12 Will the notification be published? 4.6 During the regulatory process, what provision is there for
the protection of commercially sensitive information?
The Office publishes only an announcement regarding the
notification of concentrations without delay in the Commercial The Office is obliged to respect the confidentiality of business
Bulletin and also on its website. The announcement contains an secrets of the parties to the concentration in all submitted
invitation to third parties to submit their potential objections and documents. The parties should submit the non-confidential version
comments. of the notification together with the confidential notification.
Information indicated by the parties as business secrets must be
4 Substantive Assessment of the Merger and omitted from the publicly available documents and must not be
accessible to any third parties. The final decision is published in a
Outcome of the Process
non-confidential version.

4.1 What is the substantive test against which a merger will


be assessed? 5 The End of the Process: Remedies, Appeals
and Enforcement
The new merger control regulation of 2012, in line with the EU
Merger Regulation 139/2004, abandoned the dominance test as the 5.1 How does the regulatory process end?
substantive test for a merger clearance and adopted the substantive
impediment of effective competition test. Following the assessment of the concentration, the Office with its
decision (i) approves the concentration, (ii) approves the
4.2 To what extent are efficiency considerations taken into concentration with conditions, or (iii) prohibits the concentration.
account? The Office has to decide on the concentration within a period of 25
business days when the notification filing is complete and satisfies
If the Office has established that a concentration may lead to a the information required by the Office. This 25-day period, in
substantial lessening of competition, the parties to the concentration complex cases, may be additionally extended by 90 business days
bear the burden of demonstrating the existence of circumstances at most.
that may justify a clearance, such as substantiated concentration-
related efficiencies. However, we are not aware of cases where the
Office considered efficiencies of the concentration. 5.2 Where competition problems are identified, is it possible
to negotiate remedies which are acceptable to the
parties?
4.3 Are non-competition issues taken into account in
assessing the merger? The Office may invite the parties to the concentration if the
transaction gives rise to competition concerns and to offer structural
The Office recognises that non-competition clauses are often or behavioural commitments that would remedy the identified
integral to concentrations. With respect to concentration, the Office competition problem. The parties have 30 business days from the
assess the non-compete obligation in line with the Commission Offices request to propose remedies which will lessen or eliminate
practice. the potential obstacles to effective competition. The remedies
proposed by the parties are not binding for the Office.
4.4 What is the scope for the involvement of third parties (or
complainants) in the regulatory scrutiny process? 5.3 To what extent have remedies been imposed in foreign-
to-foreign mergers?
Third parties do not have legal standing in the proceeding;
nevertheless, they have the right to make comments and remarks on Until now, the Office has not imposed remedies on foreign-to-
the proposed concentration. The Offices announcement regarding foreign concentrations.
the notification of concentrations contains an invitation to third
parties to submit their potential objections. In addition, the Office
5.4 At what stage in the process can the negotiation of
may invite third parties to express their opinion on the likely impact
remedies be commenced? Please describe any relevant
of the transaction. If the third parties request to be heard and show
procedural steps and deadlines.
reasonable interest, the Office may allow them to participate in the
oral hearing.
The negotiation of remedies commences upon the initiative of the

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Office. The parties must then propose the remedies to the 5.10 What is the time limit for any appeal?
transaction within 30 business days.
The Offices decision can be appealed within 15 day to the Council
of the Office. The Councils decision can be reviewed by the
5.5 If a divestment remedy is required, does the merger
authority have a standard approach to the terms and Regional Court in Bratislava. The action to the Regional Court has
conditions to be applied to the divestment? to be lodged within 2 months.
Slovakia

In its Guidelines on imposing conditions and obligations on 5.11 Is there a time limit for enforcement of merger control
concentrations, the Office outlines the conditions necessary for legislation?
accepting the proposed remedies and its approach to structural
remedies, including divestments. A fine for breach of merger control legislation may be imposed
within 8 years of the breach of the obligation prescribed by the
5.6 Can the parties complete the merger before the remedies merger control legislation (objective limitation period), but within 4
have been complied with? years from the opening of a proceedings for breach of the merger
control legislation (subjective limitation period).
It depends on the wording of the remedy imposed. If a remedy
consists in the promise of future behaviour, the concentration may 6 Miscellaneous
be implemented before the remedy has been complied with.
However, in case of remedies which must be complied with prior to
the implementation of the concentration, the prior implementation 6.1 To what extent does the merger authority in Slovakia
would amount to a breach of the suspension clause. liaise with those in other jurisdictions?

The Office cooperates with the European Commission and with the
5.7 How are any negotiated remedies enforced? competition authorities of other EU Member States within the
European Competition Network (ECN). In addition, the Office is a
If the parties to the concentration do not comply with the remedies, member of the International Competition Network (ICN) and liaises
the Office may order the parties to sell shares or ownership interests with the Organisation for Cooperation and Development (OECD).
acquired or to terminate the contract on the basis of which the
concentration was implemented.
6.2 Are there any proposals for reform of the merger control
In addition, the Office may impose a fine for breach of non- regime in Slovakia?
compliance with remedies up to 10% of the turnover.
At present there are no new proposals for the merger control
5.8 Will a clearance decision cover ancillary restrictions? regime. The significant reforms were made in 2011 and have been
in force since 1 January 2012.
The clearance decision will cover ancillary restrictions directly
related to, and necessary for, the implementation of the 6.3 Please identify the date as at which your answers are up
concentration. to date.

5.9 Can a decision on merger clearance be appealed? This chapter is up to date as of August 2012.

The Offices decision may be appealed within 15 days from its


delivery to the Council of the Office presided by the Offices
chairman.

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Schoenherr Slovakia

Martin Nedelka Radovan Kub


Schoenherr Schoenherr
nm. Republiky 1079/1a nm. Republiky 1079/1a
CZ-110 00 Prague CZ-110 00 Prague
Czech Republic Czech Republic

Slovakia
Tel: +420 225 996 500 Tel: +420 225 996 515
Fax: +420 225 996 555 Fax: +420 225 996 555
Email: m.nedelka@schoenherr.cz Email: r.kubac@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Martin Nedelka is a partner in Schoenherrs Prague office. He Radovan Kub is an attorney at law with Schoenherrs Prague
obtained his law degrees from the Charles University in Prague office since 2008. He specialises in competition, state aid,
(M.A.; PhD), the University of Regensburg (LL.M.) and the regulatory and public procurement law. Radovan received a
University College Dublin (LL.M.). Martin Nedelka is a member of Master of Law degree from Palack University in Olomouc and an
the Czech, Slovak and Brussels bars. LL.M. degree from the University of Saarbrcken. He worked as
Martin specialises in all aspects of Czech, Slovak and EU an intern with DG Competition of the European Commission as
antitrust law, including merger control law. He has notified a large well as with the Ministry of Economy of Baden-Wrttemberg.
number of mergers to the Czech and Slovak competition Radovan advises both local and international clients from various
authorities. Martin also has broad experience in representing sectors in investigations of the Czech and Slovak competition
enterprises and individuals before the Czech or Slovak authorities and the European Commission (e.g. Siemens, J&T,
competition authorities, as well as the European Commission in Panasonic) as well as in merger control cases (e.g. Strabag, Intel,
respect of cartel or dominance cases. He also advises on issues Procter & Gamble). He also provides competition compliance
of state aid as well as in regulatory matters (energy, trainings to the clients and advises while developing their
telecommunications). compliance programmes (such as Samsung, Linde, Assa Abloy).
In the field of public procurement law, Radovan acts for clients
from the public sector in the process of conducting public tenders
(such as Carlsbad Region, Region st nad Labem) as well as in
the proceedings before the Czech competition authority
(Sobslav Municipality). He also advises private companies
while filing complaints (e.g. Deutsche Bank, EvoBus). Thanks to
his internship with the European Commission, Radovan got a
broad experience in state aid law. Within Schoenherr, he has
advised for instance Agrofert, the City of Ostrava and the Prague
Congress Centre on state aid matters. Radovan published
several articles on competition and state aid law. He is fluent in
Czech, English and German.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of
experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be one
of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means that
we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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Chapter 47

Slovenia Jani Sorak

Odvetnika pisarna Sorak d.o.o


Eva kufca
in cooperation with Schoenherr

1 Relevant Authorities and Legislation jurisdiction to review mergers from the antitrust perspective
remains primarily with the CPA.

1.1 Who is/are the relevant merger authority(ies)? Energy Sector


The energy sector is regulated primarily by the Energy Act.
The Slovenian Competition Protection Agency (CPA) is entrusted According to the Energy Act the Agency for Energy performs the
with the enforcement of merger control under the Prevention of the role of the market regulator, and is, inter alia, authorised to
Restriction of Competition Act of 2008 (PRCA). supervise the transparency and competitiveness of gas and
The CPA is an independent agency, which has been established in electricity markets, as well as access to the transport and
August 2012 and should start operating in November 2012, when distribution networks. The Agency for Energy may be involved in
its main bodies (the director and the senate) are to be nominated. the assessment of mergers in the energy sector.

The CPA replaced the Slovenian Competition Protection Office Electronic Communications
(CPO), which was an administrative body under the supervision The electronic communications sector is regulated by the Electronic
of the Ministry of Economy. Communication Act (ECA). The Post and Electronic
The CPAs acts may be reviewed by the Supreme Court in an Communication Agency (PECA) is the market regulator for
administrative dispute. telecommunications. The ECA provides for specific rules on
cooperation between the PECA and the CPO: they are obliged (i) to
furnish each other with information necessary for the performance
1.2 What is the merger legislation? of their responsibilities, and (ii) to cooperate in analysing relevant
markets and determining significant market power. The PECA
Part III of the PRCA sets out the Slovenian merger control rules. retains exclusive competence for assessing the significant market
The currently valid PRCA entered into force on 26 April 2008, power and defining the relevant markets under the ECA. The CPA
replacing the 1999 Prevention of Restriction of Competition Act is likely to involve the PECAs expertise when deciding upon the
and has been amended in 2009, 2011 and 2012. The procedural mergers in the telecommunications sector, but retains exclusive
rules are set out in Part V Chapter 3 PRCA; in instances not competence under the PRCA.
specifically regulated by the PRCA, the CPA is obliged to abide by
Financial Sector
the General Administrative Procedure Act.
Pursuant to the laws regulating banks, insurance companies, stock
The (compulsory) merger notification form is prescribed by a
broking companies and fund management companies, an approval
government regulation, passed on the basis of the PRCA (please see
from the respective public regulators is required for the acquisition
question 3.8 below).
of a qualifying holding in such institutions. Qualifying holdings are
in principle defined as 10%, 20%, 33% and 50% of the voting rights
1.3 Is there any other relevant legislation for foreign mergers? or capital of the company; however, even a stake below 10% may
be viewed as a qualifying holding if, given the ownership structure
There is no specific legislation for foreign concentrations as such. of the company, it enables the holder the possibility to exercise
However, particular sector-specific legislation (e.g. energy, important influence. A person obtaining a qualifying holding
investment funds, banking, insurance, media) contains certain without consent of the regulatory body loses voting rights based on
restrictions (such as additional approval requirements/grounds for the shares beyond the qualifying holdings. The procedural rules for
refusal) for non-EU Member State shareholders to hold controlling the assessment of such acquisitions/increases in holdings are in line
stakes in Slovenian companies active in the specified sectors. with the Directive 2007/44/EC.
Media Sector
1.4 Is there any other relevant legislation for mergers in Mergers in the public media sector are specifically regulated by the
particular sectors? Media Act. As a general rule, the Media Act prohibits
concentrations between issuers of daily newspapers, radio and/or
The sector-specific legislation governing the sectors for energy, television broadcasters. Moreover, the Media Act requires that all
telecommunications, financial services and media, as well as the mergers in the media sector are approved by the Ministry of Culture
Takeovers Act contain specific merger provisions. However, the before closing regardless of the publishers market position. The

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PRCA is still applicable to concentrations of publishers of public voting rights (50%+1 share), but can also be acquired on a de jure
media if the notifying thresholds from the PRCA are met; however, basis (e.g. a minority shareholding with special rights) or on a de
the Media Act sets forth a number of specific limitations. facto basis (having the majority at the shareholders meeting). The
According to Article 58(3) of the Media Act, the Ministry of Culture possibility to exercise decisive influence on an undertaking does not
shall refuse to approve a merger, when it results in a dominant require the existence of visible influence on the management of
position of the merged publisher in the media market or in the the company. For instance, ownership of shares in a company,

Slovenia
advertising market. It is deemed that a dominant position in the allowing for the passing of a resolution at the shareholders general
media market occurs if the coverage for the analogue terrestrial assembly, on its own, would regardless of the other shareholders
radio signal reaches 15% of all listeners in the Slovenian market, or, suffice in order to establish the existence of sole control.
if the coverage for the analogue terrestrial TV signal reaches 30% Joint control
of all viewers in Slovenia, or if the relevant market share for daily
Acting in concert of the shareholders in a target company
newspapers reaches more than 40% in the territory of Slovenia.
constitutes joint control within the meaning of the PRCA. In the
Consent of the Ministry of Culture is required for any acquisition absence of a formal shareholders agreement, the CPA may also
of: review the voting history of the shareholders in order to establish
more than 20% shareholding (or voting rights) in any whether they have been acting in concert.
publisher of a radio or TV programme; the Ministry of
Share options
Culture issues such consent after obtaining an opinion by
PECA; or Convertible warrants, share options, or other instruments that may
more than 20% shareholding (or voting rights) in any create an entitlement to acquire an equity interest in the future do
publisher of a printed daily newspaper. not in the absence of other agreements conveying control over the
target company constitute a possibility to control the target
company per se and are thus not caught by the merger control
2 Transactions Caught by Merger Control provisions. However, the ownership of share options may trigger
Legislation an obligation to make a tender offer which must be notified to the
CPA on the basis of the Takeovers Act.
2.1 Which types of transaction are caught in particular, how
is the concept of control defined? 2.2 Can the acquisition of a minority shareholding amount to
a merger?
The PRCA provisions on concentrations cover mergers,
acquisitions and full-function joint ventures. Article 10 of the Minority shareholdings are caught by the merger control rules if
PRCA specifies that a concentration occurs when: they result in de facto or de jure control (without holding 50% +1
two or more previously independent undertakings merge; vote in the equity capital) of the company (please see question 2.1
one or more persons already controlling at least one above).
undertaking, or one or more undertakings, acquire, whether
by purchase of shares/securities or assets, by contract or by
2.3 Are joint ventures subject to merger control?
any other means, direct or indirect control of the whole or
parts of one or more other undertakings; or
The creation of a joint venture by two or more undertakings that
two or more undertakings create a joint venture performing
on a lasting basis all the functions of an autonomous performs all the functions of an autonomous economic entity on a
economic entity. lasting basis (full function joint venture) constitutes a concentration
within the meaning of the PRCA.
For the purposes of the PRCA, control is deemed to be constituted
by way of (acquisition of) rights, contracts or any other means Pursuant to Article 11(3) of the PRCA, the establishment of a joint
which (either separately or in combination, and having regard to venture that has the aim or effect of performing a concerted action
particularities of the facts or law involved) confer the possibility of of undertakings, shall be assessed in the light of the cartel
exercising decisive influence over an undertaking, in particular by prohibition pursuant to Article 6 of the PRCA. Should the CPA find
way of: that the conditions for the exemption of restrictive agreements from
prohibition (improvement of production or distribution of goods,
ownership of the entire capital or of a capital interest;
promotion of technical and economic progress while allowing
ownership or the right to use all or part of the assets of an
consumers a fair share of the resulting benefit without (i) imposing
undertaking; or
restrictions which are not indispensable to the attainment of these
right or contract which confers decisive influence on the objectives, and (ii) allowing such undertakings the possibility of
voting or decisions of the organs of an undertaking.
eliminating the competition in respect of a substantial part of the
When establishing the existence of control, the CPO usually took products or services which are the subject of the agreement) are not
into consideration the provisions of the Companies Act, the met, the CPA will not approve such a concentration.
Takeovers Act and Markets in Financial Instruments Act, which
include specific definitions of terms such as affiliated persons,
acting in concert, dominating/dominated company, holdings, 2.4 What are the jurisdictional thresholds for application of
merger control?
groupings, etc.; however, it needs to be noted that the CPA is not
bound by such definitions. Moreover, the CPO was inclined to rely
A concentration must be notified to the CPA if the parties to the
on the European Commissions guidelines on the existence of
merger meet the following thresholds:
control, which is expected from the CPA as well (though they are
not formally binding on the CPA). the combined aggregate annual turnover of all the
undertakings concerned (including undertakings belonging
De facto and de jure control to the same group), exceeds EUR 35 million before tax on
Control often results from the acquisition of the majority of the the Slovenian market in the last business year; and

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(a) the annual turnover of the target company (including Insurance companies turnover shall consist of gross
undertakings belonging to the same group) exceeds EUR 1 insurance and reinsurance premiums charged by these
million on the Slovenian market in the last business year, or companies in a given year.
(b) in the event of creation of a joint venture, the annual Market Share Calculation
turnover of at least two participating undertakings (including
With regard to the relevant product market, all the products and/or
undertakings belonging to the same groups) exceeds EUR 1
million on the Slovenian market in the last business year. services that the consumer and/or user considers to be
Slovenia

interchangeable or substitutable by reason of their characteristics,


If a concentration does not meet the above thresholds, but the price or intended use, are deemed as constituting a single relevant
market share of the undertakings concerned exceeds 60% in the product market. The relevant geographic market comprises all
Republic of Slovenia, Article 42(3) of the PRCA provides for an areas in which competitors on the relevant product market compete
(implied) obligation of the undertakings concerned to inform the in the sale or purchase of products, in which the conditions of
CPA of the concentration (but not submit a formal notification): competition are sufficiently homogeneous, and which can be
namely, pursuant to Article 42(3) of the PRCA, the CPA may distinguished from neighbouring areas because the competition
request that a concentration be notified within 15 days upon conditions are appreciably different.
having been informed by the undertakings, or upon having learned
about the concentration from market sources. In any of the two Please note that the relevant geographic market might be (and
events, the transaction would have to be suspended until a clearance usually is) broader than the Slovenian market. However, when
is obtained from the CPA (please, see also question 3.7 below). We determining whether a concentration falls under the regime of
note that in spite of the ambiguous wording of the respective Article 42(3) of the PRCA (i.e. whether or not the CPA may request
provision the general understanding is that no penalty may be its notification in the absence of turnover thresholds please see
imposed for the failure of an undertaking to inform the CPA of a above), the market share for relevant products and services on the
transaction falling within the scope of Article 42(3) of the PRCA. Slovenian market only must be taken into account.

Turnover Calculation
2.5 Does merger control apply in the absence of a
Calculation of the turnover is based on the audited, or, in the
substantive overlap?
absence thereof, on the unaudited annual accounts. Pursuant to
Article 3 of the PRCA, the annual turnover comprises all revenues
Yes. As soon as the thresholds set out under question 2.4 above are
generated by undertakings participating in the concentration
met, merger control regulation applies. Please note that this applies
together with group undertakings (see below), excluding net
also for concentrations, which may be subject to review by the CPA
revenues from sale of products and services between group
on the basis of Article 42(3) of the PRCA (i.e. where the
undertakings. Where the concentration arises by acquiring control
undertakings concerned do not meet the turnover thresholds, but
of a part of one or more undertakings, regardless of whether these
have a market share exceeding 60% on the Slovenian market).
parts have the status of a legal entity, only the turnover relating to
the parts that are the subject of the concentration shall be taken into
account with regard to the seller or sellers. 2.6 In what circumstances is it likely that transactions between
parties outside Slovenia (foreign-to-foreign transactions)
Generally, the CPA will establish the turnover of companies
would be caught by your merger control legislation?
involved in the merger solely on the basis of their balance sheets.
In case of groups of companies the total turnover on the Slovenian
Foreign-to-foreign transactions shall be notified to the CPA if the
market needs to be assessed regardless of the geographical scope of
jurisdictional thresholds are met, as it is not necessary for foreign
the product market in which it is achieved. Pursuant to Article 3 of
companies to have an established legal entity or subsidiary in
the PRCA, the following companies are deemed to be belonging to
Slovenia. It suffices that at least the (foreign) target company
the same group:
achieved turnover on the Slovenian market. The only exemption
undertakings (directly) involved in the concentration;
from the stated is, when the subject concentration is to be appraised
undertakings controlled by the undertakings (directly) by the European Commission in accordance with Regulation
involved in the concentration; 139/2004/EC. In such a case, the foreign-to-foreign transaction
undertakings controlling the undertakings (directly) involved (as all the others) does not need to be notified to the CPA.
in the concentration;
undertakings controlled by the undertakings from the
preceding indent; and 2.7 Please describe any mechanisms whereby the operation
of the jurisdictional thresholds may be overridden by other
undertakings in which one or more of the undertakings provisions.
mentioned in the preceding indents jointly or in collaboration
with one or more undertakings exercises decisive influence.
Concentrations with an EU dimension must be notified to the
As a rule, the CPA will only include those affiliates in the turnover European Commission and the CPA does not have the jurisdiction
calculation that are listed in the consolidated balance sheet of the to review such mergers.
companies involved in the merger. If the balance sheets do not
reflect the turnover achieved on the Slovenian market, the
companies involved in the merger must calculate the turnover on 2.8 Where a merger takes place in stages, what principles
the Slovenian market separately. are applied in order to identify whether the various stages
constitute a single transaction or a series of transactions?
Two specific examples may be given:
Where banks, saving organisations or other financial Apart from stipulating for the purpose of turnover calculation
institutions are involved in the merger, the turnover shall that two or more transactions executed within two years by the
consist of the income from interests charged, net profits from
same persons with respect to the same target undertaking are
financial transactions, commissions charged, income from
deemed as one transaction (occurring with the execution of the
securities held by these organisations and of the income from
other business activities. latest one), the PRCA does not contain any specific rules on how to

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deal with a merger that takes place in stages. Furthermore, no 3.3 Where a merger technically requires notification and
guidelines have been adopted on the issue. Usually, the CPA will clearance, what are the risks of not filing? Are there any
consider a merger in stages as a single transaction as long as all the formal sanctions?
stages of the transaction have been disclosed in the notification and
the steps take place only among the undertakings participating in The exercise of any rights arising from a notifiable concentration
the concentration as disclosed in the merger notification. prior to receiving clearance from the CPA may entail the following

Slovenia
sanctions:
If the target company is purchased by a group of joint purchasers,
with the intention of dividing up the assets of the target between the Fines: a penalty in the amount of up to 10% of the turnover
joint purchasers, it would, in principle, be possible to notify the achieved by the undertaking (along with other undertakings
of the same group) in the preceding business year, in case of
original purchase of the target company, as well as the subsequent
a failure to notify and for late filing of the concentration. In
series of steps dividing the assets as one transaction and the CPA addition, a fine between EUR 5,000 and 10,000 may be
would most likely consider it as only one transaction. However, levied on the responsible person of such an undertaking or on
please note that the CPA would only consider and decide upon the the responsible independent contractor. If the nature of the
transaction based on the facts existing at the time of rendering the offence is deemed to be particularly serious given the amount
decision. Should, for example, the control in one or more of the of resulting damages or the amount of unlawfully acquired
joint purchasers change subsequent to the decision of the CPA pecuniary benefits, the undertakings responsible person may
clearing the joint purchase of the target company, such a joint be fined by up to EUR 30,000.
purchaser would most likely nevertheless have to notify again the The fines imposed by the CPA may be annulled or reduced
subsequent acquisition of parts of the target company. through an appeal process to the Supreme Court.
Suspension of Rights and Nullity: the parties are prohibited
from exercising the rights arising from the merger before a
3 Notification and its Impact on the Transaction clearance decision is issued by the CPA. Article 12(3) of the
Timetable PRCA authorises the CPA to file a lawsuit to declare such an
act (i.e. the exercise of rights in the absence of a notification)
null and void. The acquirer of shares in the target company
3.1 Where the jurisdictional thresholds are met, is notification in breach of the filing obligation may lose its voting rights
compulsory and is there a deadline for notification? from the shares acquired. Consequently, the remaining
shareholders can judicially challenge any resolution of the
Notification is mandatory if the jurisdictional thresholds are met. target companys general assembly passed on the basis of
The participants to the concentration must notify a concentration to voting rights stemming from the shares acquired without
the CPA no later than 30 days after the conclusion of the underlying notification to the CPA.
agreement, the announcement of the public bid or acquisition of a Other CPA measures: the CPA may order division of the
controlling interest. The 30-day deadline starts running when the undertaking, disposal of all the shares acquired, sale of
first of those events occurs. interests, sale of securities, or other measures appropriate to
achieve a restoration of the situation prevailing before the
With regard to takeovers, the CPA shall be notified of a compulsory implementation of the concentration. However, the CPA
tender offer (takeover bid) in accordance with the provisions of the may only do so if the merger resulted in strengthening of the
Takeovers Act even if the planned concentration does not power of one or more undertakings, individually or jointly, as
constitute a concentration within the meaning of the PRCA (note a result of which effective competition on the relevant
that the takeover process is primarily monitored by the Slovenian market is significantly impeded or excluded.
Securities Market Agency); in such an event, the obligation to
inform the CPA pursuant to the Takeovers Act is fulfilled by way of 3.4 Is it possible to carve out local completion of a merger to
a simple letter sent to the CPA and there is no requirement that the avoid delaying global completion?
formal Merger Notification Form is submitted to the CPA.
In principle yes, but it depends on the transaction structure. The
3.2 Please describe any exceptions where, even though the PRCA only covers the effects of a merger on the Slovenian market.
jurisdictional thresholds are met, clearance is not Consequently, the CPO is only competent to appraise those effects
required. of the merger which can be clearly defined to exist on the Slovenian
market. It is therefore possible to carve out the part of the
There is one exception to the filing obligation that applies to banks, transaction that affects only the Slovenian market and proceed with
insurance companies, savings institutions and other financial the implementation outside Slovenia, or vice versa.
undertakings, whose regular activities include trading securities on
their own behalf or on behalf of others. No notification is required if
3.5 At what stage in the transaction timetable can the
such an institution acquires equity interests in an undertaking with the notification be filed?
purpose of resale, provided that it does not exercise voting rights
arising from such equity interests in order to affect the competitive The PRCA only provides for the latest date by which the filing must
actions of the undertaking in question, or provided that it only be completed, i.e. in general 30 days after signing the agreement
exercises such voting rights in the interest of arranging for the sale of (see question 3.1 above). The CPO has established the practice that
such equity interests, with a further condition that such sale is made a notification can be filed before the parties execute a binding
within one year upon purchase of the equity interests. The one-year agreement (e.g. the execution of the agreement is still subject to
period may be extended by the CPA at the request of the undertaking internal corporate approval measures), if the undertakings
if such an undertaking is able to demonstrate that the sale could not concerned show a serious intent to enter into the planned
be properly executed within the prescribed period. transaction and disclose to the CPO all the milestones of the
envisaged transaction. In addition, even if clearance is obtained,
the CPO may withdraw or amend such a clearance if the material

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facts existing at the time of the completion of the merger change the parties to submit (additional) data and/or documents, the parties
substantially from the time when the clearance had initially been may, in principle, always ask the CPA to extend a deadline for the
given. submission of documents and legal submissions (with the exception
of the thirty day deadline for filing the merger notification).
3.6 What is the timeframe for scrutiny of the merger by the
merger authority? What are the main stages in the 3.7 Is there any prohibition on completing the transaction
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regulatory process? Can the timeframe be suspended by before clearance is received or any compulsory waiting
the authority? period has ended? What are the risks in completing
before clearance is received?
Pre-notification phase
First and foremost, it needs to be noted, that the pre-notification The PRCA only prohibits exercise of rights deriving from a
phase is not a statutory part of the merger control process and is not concentration prior to a final clearance decision (please see question
regulated by the PRCA. Prior to the notification, the CPO was 3.3 above). It is therefore argued that mere completion of a
usually willing to provide information at the request of the parties transaction (i.e. the transfer of title to shares/assets of the target
which may lead to a conclusion that the CPA will be as well. undertaking) is not prohibited per se. However, please note that, to
Moreover, in the past years, the CPO has even been prepared to date, the CPOs practice has not yet established a definite answer in
meet with the parties prior to the submission of a formal this regard; a possibility that the CPA might adopt a different
notification. position can consequently not be excluded.
Phase I Upon a proposal of an undertaking, the CPA may issue an order
permitting the implementation of concentration within a specified
In Phase I procedures the CPA may adopt one of the following three
scope and under specified conditions prior to issuing a clearance,
decisions:
provided that the undertaking can demonstrate in its proposal that
If the CPA finds that the concentration notified does not fall such implementation is essential to maintain the full value of the
within the scope of the provisions of the PRCA, it shall issue
investment or to perform services of general interest. The CPA is
such a finding by way of a decision.
obliged to decide on such a request within fifteen working days.
If the CPA finds that the notified concentration, although
falling within the scope of the provisions of the PRCA, does Parties that exercise rights arising from a concentration that should
not raise serious doubts as to its compatibility with have been notified prior to obtaining approval by the CPA risk fines
competition rules, it shall issue a decision not to oppose the and other sanctions (see question 3.3 above for details).
concentration, and declare the concentration compatible with
competition rules.
3.8 Where notification is required, is there a prescribed
If the CPA finds that the concentration notified falls within format?
the scope of the provisions of the PRCA and raises serious
doubts as to its compatibility with the competition rules, it
shall issue a decision on the instigation of a Phase II The notification must be submitted on a Merger Notification Form
procedure. a questionnaire prescribed by the Decree Defining the Contents
and Elements Required for the Notification Form for the
All of the Phase I decisions are legally required to be taken within
Concentration of Undertakings (passed in 2009). The scope of
25 working days from the filing of the merger notification.
information requested by the Merger Notification Form is quite
However, the said deadline only starts running once the filing has
exhaustive (it closely mirrors the EC Merger Regulations Form
been deemed complete by the CPA. Given the exhaustive nature of
CO) and includes, inter alia:
the Merger Notification Form (see question 3.8 below), requests by
the CPA for supplementation of the filing (prolonging the initiation certified copies of the documents or the draft documents
bringing about the planned concentration;
of the deadline) will not be uncommon and can, in practice,
significantly impact the transaction timetable. Moreover, as this a list of the members of the management board, major
time limit is only instructive to the CPA, it may even happen that no shareholders or interest holders in the undertakings which
have participated or are planning to participate in the
Phase I decision is taken within the said time limit. The parties
concentration;
may, however, following a notice to the CPA giving the CPA
audited accounting statements of the participants in the
additional seven days to issue a Phase I decision, file a lawsuit with
concentration for a minimum of the preceding three tax
the Administrative Court demanding the CPA to issue a Phase I years; in the event that a participant is not obliged to audited
decision. We note that, in the meantime, the exercise of rights accounting statements, regular accounting statements are to
deriving from a concentration prior to a Phase I decision(s) is not be submitted;
allowed. a report on any form of participation in a concentration of
Phase II undertakings in Slovenia in the last three years;
Should the CPA decide to initiate Phase II proceedings, it is bound a list of controlled undertakings and subsidiaries;
to issue a final decision in sixty days upon having issued a decision a list of controlling undertakings;
on the opening of a Phase II. Again, the sixty day period is only data on the market shares of the participants in the
instructive in nature and the CPO sometimes took longer to issue transaction;
the Phase II decision. In case the CPA does not issue a Phase II data on all relevant product/service markets wherein the
decision in time, the parties may file a lawsuit with the parties to the concentration operate (including size, past and
Administrative Court demanding that the CPA issues such a future development, structure of demand and supply, market
decision. access, etc.); and
In general, the CPA issued decisions in merger proceedings without data on the main customers, suppliers and competitors; and
an oral hearing. data on the expected economic consequences of the
concentration.
If, in the course of merger control proceedings, the CPA should ask
The parties to the notification may ask the CPA for a waiver with

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regard to some of the requested information in the Merger and geographic market. A high market share, however, does not
Notification Form; however, such a waiver in practice was not always give rise to competition concerns, as the CPO appraised
necessarily granted by the CPO. market shares together with other competition parameters, such as the
choice available to suppliers and users, and the openness of the market
for new entrances. Pursuant to the PRCA the CPA will amongst
3.9 Is there a short form or accelerated procedure for any
types of mergers? Are there any informal ways in which
others take the following factors into account (Article 11 (2) PRCA):

Slovenia
the clearance timetable can be speeded up? the choice available to suppliers and users;
the market positions of undertakings concerned;
Yes, the Slovenian merger control regime provides for a short form the access to sources of supply and to the market itself;
filing. The requirements to submit only a short form filing resemble the structure of the relevant markets;
those of the EU Commissions Short Form CO, i.e. there have to be
the barriers to entry for competing undertakings;
no overlaps between the parties with a combined market share
exceeding 15%, no vertical links between the parties with a market the financial capability of affected undertakings;
share exceeding 25% on one of the related markets, or no the level of international competitiveness of the undertakings
neighbouring market where either party enjoys a market share of under appraisal; and
more than 25%. supply and demand trends on the relevant markets.
In addition, one can speed up the clearance timetable by supplying
the CPA with a notification that is as detailed as possible, in 4.2 To what extent are efficiency considerations taken into
accordance with relevant rules applicable to the contents of account?
notifications as each request of the CPA for the submission of
additional information extends the applicable deadline. The CPA shall take efficiency considerations into account in the
process of its assessment, as long as the parties to the merger are
able to demonstrate that consumers shall benefit from these
3.10 Who is responsible for making the notification and are
there any filing fees?
efficiencies as well.
A concentration that leads to a substantial lessening of competition
The filing obligation lies with the acquirer. However, a joint may still be cleared if the parties can evidence that the transaction
notification by the acquirer and the target company is possible. will lead to overriding efficiencies. To this end, synergies and other
pro-competitive effects shall be set out in the filing already and can
The filing fee currently amounts to approximately EUR 2,000.00.
be substantiated in the further proceedings.
We note that the amount of the filing fee is regularly subject to
adjustment by the Government of the Republic of Slovenia. The Due to the small geographical market size of Slovenia, the CPO has
filing fees need to be paid to the CPA by way of a bank transfer at approved mergers that resulted in very high market shares (more
the time of the filing. than 90%) in Slovenia. Owing to this, the CPO, as a rule, used to
put a lot of emphasis on the definition of the relevant (cross-border)
geographic market, which is expected from the CPA as well.
3.11 What impact, if any, do rules governing a public offer for a
listed business have on the merger control clearance The CPO generally focused on the horizontal and vertical effects of
process in such cases? the merger, though conglomerate effects also figure in their market
assessment.
The Slovenian merger control regime mirrors the EU Merger Control
Regulation to the extent that public bids can be closed prior to 4.3 Are non-competition issues taken into account in
clearance, provided that the respective bid has been notified timely assessing the merger?
and the acquired voting rights are not exercised prior to clearance.
As the CPA is not required by the PRCA to include criteria other
3.12 Will the notification be published? than those outlined above in their market test, the impact of a
merger on the public interest or other non-competition issues (e.g.
No. Only the clearance decision will be published. employment, industrial policy) does not play a role in the
assessment of a concentration.
We note, however, that non-competition issues arising from
4 Substantive Assessment of the Merger and concentrations in certain regulated industries may be taken into
Outcome of the Process account by sector regulators (see question 1.4 above). For example,
the Bank of Slovenia when assessing whether or not a certain
4.1 What is the substantive test against which a merger will person is suitable to hold a qualified share (10% or more) in a
be assessed? Slovenian bank takes into account factors such as the competence
of the investor for the involvement in the target banks business, its
The CPA shall assess concentrations within the purpose of the financial stability and even its reputation. An analogue test is
PRCA primarily with a view to establish whether or not a threat of performed by the Insurance Supervision Agency when deciding on
creating or strengthening a dominant position exists, as a result of issuing of a permission for the acquisition of a qualified
which effective competition could be distorted or significantly shareholding in a Slovenian insurance company.
impeded. The market test applied by the CPO (and that will be
applied by the CPA) corresponds broadly to the European 4.4 What is the scope for the involvement of third parties (or
Commissions substantial impediment of effective competition complainants) in the regulatory scrutiny process?
test.
The effects of concentrations are analysed on the relevant product Third parties may request to participate in the proceedings if they

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are able to demonstrate a legally recognised interest in the outcome assisted by authorised external experts) on the basis of a written
of the proceedings. The decision as to whether to admit the third authorisation issued by the CPA.
party to the procedure lies with the CPA. If the interest is not The officials of the CPA may, upon the issuance of an inspection
recognised, the third party may challenge the CPAs refusal (to grant order (sklep o preiskavi), enter the premises of the registered
standing) before the Supreme Court. corporate seat of the undertaking subject to an investigation and any
Phase I proceedings other premises in which the respective undertaking or other
Slovenia

Pursuant to the PRCA, the CPA is only obliged to publish its Phase authorised undertakings carry out activities and business operations
I decisions. Thus, prior to the publication of the Phase I decision from which a violation of competition law might have arisen.
third parties are generally not informed about pending Phase I Please note that private premises may only be inspected with the
proceedings before the CPA. If the Phase I procedure ends without consent of the respective owner; otherwise, the search of private
the instigation of Phase II, third parties may should they be able premises is subject to prior judicial authorisation.
to prove the existence of legally recognised interest file a lawsuit If the undertaking subject to inspection (a) refuses to allow access
with the Supreme Court against the Phase I decision. It should be to its business premises, (b) otherwise obstructs the investigation, or
noted that the court is not inclined to acknowledge the existence of (c) if such obstruction may be reasonably expected, the CPA
a legally recognised interest to third parties. officials may enter the premises and access business books or other
Phase II proceedings documentation by force; the police may be called upon to support
the CPA officials. Obstructing the investigation may be sanctioned
The decisions on the instigation of Phase II proceedings are
by fines of up to 1% of the respective undertakings annual
published on the CPAs website. At that time, third parties who
turnover. Furthermore, penalties of up to EUR 50,000 may be
believe they have a legally recognised interest may apply for
imposed on third persons natural persons not attributable to the
participation in the procedures before the CPA. If the CPA
investigated undertaking (i.e. persons other than representatives,
recognises such third parties interest to join the procedures, the
employees or contractual co-workers) for the obstruction of the
third parties will be (i) able to participate in the entire procedure, (ii)
investigation.
granted access to file, (iii) entitled to propose evidence and present
their opinion on all relevant issues, and (iv) entitled to file a lawsuit Whether or not an inspected undertaking has a right to immediate
with the Supreme Court challenging the final decision issued by the legal assistance in the event of a dawn raid has not been explicitly
CPA. regulated by the PRCA; pursuant to the established practice, the
CPA officials are not obliged to wait for the arrival of an external
Informal involvement
counsel, unless the investigation has been initiated by the Public
Furthermore, third parties may submit statements and evidence to Prosecutor (based on an alleged infringement of the Slovenian
the CPA even without formally joining the proceedings. Although Criminal Code).
the CPA is not required to take such submissions and evidence into
The CPA officials are further empowered to: (i) review business
account (and may not base its decision on such evidence without
books and other documentation, regardless of the medium on which
having given the parties a chance to comment on them beforehand),
it is written or stored; (ii) obtain copies of or extracts from business
such submissions may, in practice, have an impact on the
books and other documentation in any form using photocopying
assessment of the merger.
devices and computer equipment of the undertaking or the CPA;
Information requests (iii) seal all business premises and business books and other
The CPA may, on its own initiative, contact third parties (usually the documentations during the investigation and to the extent required;
competitors to the notifying parties, their customers or suppliers) (iv) seize items and business books and other documentation for a
and send them requests for information (see also question 4.3 maximum period of 20 working days; and (v) require any
below). representative or employee to give an oral or written explanation of
facts or documents which relate to the subject or purpose of the
investigation, and record this in the minutes.
4.5 What information gathering powers does the regulator
enjoy in relation to the scrutiny of a merger? The CPA may not review:
confidential attorney/client correspondence; letters,
Pursuant to Article 27 of the PRCA, the CPA is entitled to request notifications and other methods of communication related to
specific information from any market participant even without the procedure between the undertaking and its legal
having instigated a formal procedure against such undertakings. representatives are exempted from the investigative action.
The privilege also applies to in-house lawyers if the in-house
This provision is relied upon by the CPA when conducting market
lawyer is admitted to the bar and he/she represents the
tests with regard to proposed concentrations.
undertaking based on a power of attorney; or
If the undertaking either fails to submit the requested data, provides correspondence/documents not relating to the subject-matter
the CPA with incorrect or misleading data, or simply fails to comply of the investigation; the officials have to be enabled to
with the CPAs request in a timely manner, the CPA may impose a ascertain the (ir-)relevance of all books and other records. If
fine of up to EUR 50,000 on such an undertaking. If the it is disputed whether a document is in fact privileged, the
undertaking continues with not complyng with the CPAs request respective document shall be put in a sealed envelope. The
for information, the CPA may continue to impose sanctions until the CPA will then decide on the permissibility of the review of
aggregate amount of the respective monetary penalties reaches 1% such documents. Ultimately, this question will be decided by
the Supreme Court.
of the undertakings annual turnover in the preceding business year.
We note that, not long after the adoption of the PRCA in 2008, a
Undertakings and/or persons against which/whom the procedures
dispute ensued between the CPO and the Slovenian Information
are not formally opened may be summoned as witnesses under the
Commissioner (a public authority entrusted with the protection of
General Administrative Procedure Act, which implies an obligation
personal data) regarding whether or not, in the absence of a court
to co-operate with the CPA under the threat of fines. A witness may
order, the CPO was allowed to access the (company) e-mail account
therefore be compelled to a testimony. Investigations shall be
of the undertakings officials in the event that such e-mail account
carried out by persons employed with the CPA (which may also be

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contains personal e-mails (constitutionally guaranteed privacy of concentration complies with the requirements laid down in
communication). In order to clarify the issue, an amendment to the the PRCA.
PRCA was passed in 2009, explicitly stipulating that the CPA is Prohibition of merger: if the CPA finds that the concentration is
now entitled to inspect business correspondence, regardless of the incompatible with the provisions of the PRCA, it shall issue a
medium bearing such correspondence. decision declaring the concentration incompatible with competition
rules. In its decision the CPA may impose measures with a view to

Slovenia
4.6 During the regulatory process, what provision is there for eliminate the effects of the prohibited concentration, which have
the protection of commercially sensitive information? already occurred (e.g. division of the undertaking, disposal of all
the shares acquired, sale of interests, sale of securities, or other
Confidentiality measures appropriate to achieve a restoration of the situation
prevailing before the implementation of the concentration). If the
The information and data provided to the CPA during the
undertakings concerned fails to comply with the decision
investigation is treated as confidential provided that the submitting
containing de-merger or other obligations addressed to the parties
party (i) requests protection of business secrets, and (ii)
within the specified deadline, the CPA may impose fines of up to
demonstrates that data (with regard to which protection is sought)
10% of the turnover of the infringing undertaking (together with
constitute business secrets. In principle, the CPA is obliged to
other undertakings belonging to the same group) in the preceding
evaluate whether certain information or data indeed constitute
business year. A fine of EUR 5,000 to 10,000 may be levied on the
business secrets and may not rely purely on the parties designation
responsible person of such undertakings or a responsible
in practice, the CPO relied on the definition of the notion of a
independent contractor. If the nature of the offence is deemed to be
business secret from the Companies Act (ZGD-1).
particularly serious given the amount of resulting damages or
Recent developments in the CPOs practice show that the CPA will amount of unlawfully acquired pecuniary benefits, the
only grant such protection if the interested party has (i) explicitly undertakings responsible person may be fined up to EUR 30,000.
requested protection of business secrets, and (ii) provided the CPA
with a clean version of the respective documents (i.e. documents
containing only information which does not constitute business 5.2 Where competition problems are identified, is it possible
to negotiate remedies which are acceptable to the
secrets).
parties?
With regard to the mandatory publications pursuant to the PRCA
(final decisions of the CPA are published on its website), the CPA is The CPA is required to present all of the findings deemed necessary
required to protect the confidentiality of data and may publish only for the decision to the parties prior to the final decision in a
data indispensable for achieving the purpose of the publication. All statement of objection. As a rule, the CPA will encourage the
officials of the CPA must keep the information and data obtained parties to propose remedies to any competition concerns the CPA
during the procedures confidential, and shall be liable for may establish. The remedies (structural or behavioural), which the
unauthorised disclosure. Even when delivering the decision to the CPA would be willing to accept depend on the nature of the
parties of the procedure, the CPA is obliged to blacken the parts of competition concern identified. In general, the remedies must be
the decision containing business secrets of the other party. The suitable to ensure a permanent solution for the identified concern,
PRCA further provides that CPA must, upon request, keep the not to cause new competition problems, and should not require any
identity of a company or an individual, who has filed a complaint or additional supervision after their implementation. Please note that
provided the CPA with information, secret if it is likely that the the CPA may, in case of a conditional merger clearance, impose
disclosure of the identity could cause significant damage to such conditions upon the parties, which were not previously agreed by
company or individual. the parties.
Access to Files
Access to files is regulated by the PRCA as well as by the General 5.3 To what extent have remedies been imposed in foreign-
Administrative procedure Act. The parties are granted access to to-foreign mergers?
file, however the CPA may deny a party access to (a) internal
documents of the CPA relating to the case, (b) documents which are There have been no pure foreign-to-foreign mergers, in which
deemed to constitute a business secret of another undertaking remedies were imposed and concentration cleared subject to
(please see above), and/or (c) data pertaining to the identity of an conditions.
information source which has requested confidentiality.

5.4 At what stage in the process can the negotiation of


5 The End of the Process: Remedies, Appeals remedies be commenced? Please describe any relevant
and Enforcement procedural steps and deadlines.

Negotiations of remedies will usually start at the end of the


5.1 How does the regulatory process end? investigation phase (Phase II). The undertakings concerned are
obliged to suggest such remedies prior to the adoption of a final
Please see question 3.6 above regarding the end of Phase I. decision on the concentration.
Should the CPA open Phase II, it may (within 60 days) close it in
either of the following ways:
5.5 If a divestment remedy is required, does the merger
Unconditional clearance: if the CPA finds that a authority have a standard approach to the terms and
concentration is not incompatible with the provisions of the conditions to be applied to the divestment?
PRCA, it shall issue a decision declaring the concentration
compatible with competition rules.
The PRCA empowers the CPA to impose divestment obligations
Conditional clearance: the CPA may impose additional onto the parties of a concentration; however, it does not provide for
obligations and conditions intended to ensure that the

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any detailed regulation of such measures. While the CPO has it may reject the lawsuit as unsubstantiated;
already imposed divestment obligations on a few occasions, the it may annul the decision of the CPA (partially or fully) and
practice is still far from having established any solid/uniform request the CPA to issue a new decision; or
approach to the applicable terms and conditions, which could be on rare occasions the court may even amend or alter the CPA
relied upon by market participants as standards for future conduct decision itself, if all the relevant facts were fully and
of the CPA. correctly established by the CPA, but the CPA failed to
Slovenia

correctly apply the law, and if any further delay in rendering


a final decision would have a detrimental effect on the
5.6 Can the parties complete the merger before the remedies interests of the parties involved.
have been complied with?

The remedies imposed by the CPA may be such that they have to be 5.10 What is the time limit for any appeal?
complied with either prior or after the completion of the merger. In
principle, the parties could complete the merger before the remedies Parties may appeal decisions of the CPA before the Supreme Court
have been complied with if the CPA agrees with such time frame in within 30 days from the service of notice.
its decision.
5.11 Is there a time limit for enforcement of merger control
5.7 How are any negotiated remedies enforced? legislation?

The CPA decides on remedies in a formal decision in which the The PRCA does not provide for any time limit for the enforcement
CPA also orders the suspension of the procedures until the of merger control legislation. In principle, the CPA may at any time
fulfilment of commitments proposed by the party, or until the expiry initiate procedures with regard to non-notified mergers ex officio.
of the deadline determined for their fulfilment. The misdemeanour procedures for imposing monetary fines for the
failure to notify the merger may not be initiated after a period of 5
years from the date when the merger should have been notified;
5.8 Will a clearance decision cover ancillary restrictions?
after 10 years, no misdemeanour proceeding may be initiated or
continued (absolute prescription).
The PCRA does not contain provisions on the assessment of
ancillary restrictions. Nevertheless, the parties are required to
describe any ancillary restrictions in the Merger Notification Form. 6 Miscellaneous
As the CPA decides upon the compatibility of the notified merger
with competition rules, it is usually argued that the permissibility of 6.1 To what extent does the merger authority in Slovenia
ancillary restrictions is covered by the merger clearance decision as liaise with those in other jurisdictions?
well. However, there is no existing jurisprudence, which would
clearly establish whether the clearance decision also covers The CPA is a member of the European Competition Network and
ancillary restrictions. the International Competition Network.
As concerns the merits, the CPA, in principle, will follow the
practice of the European Commission when assessing ancillary
6.2 Are there any proposals for reform of the merger control
restrictions. regime in Slovenia?

5.9 Can a decision on merger clearance be appealed? No, we are not aware of any envisaged changes to the merger
control regime, but as indicated under question 1.1 the CPO has
The final decisions of the CPA in merger procedures as well as been recently restructured into an independent agency Slovenian
some procedural decisions may be appealed to the Supreme Court. Competition Protection Agency.
The appeal to the Supreme Court may only pertain to the facts and
legal grounds in the CPAs final merger decision in substance, but 6.3 Please identify the date as at which your answers are up
not to fines imposed by the CPA in the procedure. The CPA to date.
decisions on fines must be separately challenged before a regular
court - under certain conditions and with substantial limitations the 21 September 2012.
final decision of a Circuit Court may be further appealed before the
Higher Court.
When deciding upon the lawsuit, the Supreme Court may adopt any
of the following decisions:

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Jani Sorak Eva kufca


Schoenherr Schoenherr
Tomsiceva 3 Tomsiceva 3
SI-1000 Ljubljana SI-1000 Ljubljana
Slovenia Slovenia

Slovenia
Tel: +386 1 200 09 35 Tel: +386 1 200 09 84
Fax: +386 1 426 07 11 Fax: +386 1 426 07 11
Email: j.sorsak@schoenherr.eu Email: e.skufca@schoenherr.eu
URL: www.schoenherr.eu URL: www.schoenherr.eu

Jani Sorak is a partner with Schoenherr in Ljubljana, where he Eva kufca is a senior associate at Schoenherr Ljubljana, who
specialises in EU and national competition law, as well as in joined the EU & Competition team in 2012 after completing her
mergers and acquisitions. He regularly acts for foreign and LL.M. at the London School of Economics. Before joining
domestic clients before the Slovenian Competition Protection Schoenherr, Eva used to work for one of the biggest national law
Office and courts on matters of merger control/filings and antitrust firms, where she represented numerous clients in front of
investigations in automotive, gas, telecommunications, Slovenian Competition Authority in antitrust and merger
pharmaceutical and insurance industries. Jani worked as a proceedings. Apart from competition law cases, she was also
partner for Schoenherr between 2004 and 2007, after which he involved in some of most noticeable M&A transactions in the
became director at the Competition Protection Office (CPO), Slovenian market.
where he was leading the increased efforts to bring the country in
line with EU antitrust enforcement practice. After three years at
the CPO, Jani returned to Schoenherr at the start of 2011.

Schoenherr is a leading full service law firm in Central Europe. About 300 professionals service national and international clients
from our offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Chisinau, Istanbul, Kyiv, Ljubljana, Prague, Sofia, Vienna,
Warsaw and Zagreb. Operating in a rapidly evolving environment, we are a dynamic and innovative firm with an effective blend of
experienced lawyers and young talent. As one of the first international law firms to move into CEE/SEE, we have grown to be one
of the largest firms in the region. With 14 offices and several country desks, our comprehensive coverage of the region means that
we can offer solutions that perfectly fit the given industry, jurisdiction and company. Schoenherr is in compliance with the
respective local legal standards and conduct rules in all countries; therefore, the local firm name may vary from jurisdiction to
jurisdiction.
Schoenherrs EU & Competition Team advises on all aspects of EU law with an emphasis on European and national competition
law, in particular in relation to multinational mergers, acquisitions and joint ventures. Apart from this transactional work,
Schoenherr also offers comprehensive counselling in EU and competition law matters. Lawyers of the EU & Competition Team
advise domestic and foreign international clients and represent them before national competition authorities, the European
Commission and the European Courts (ECJ, EGC).

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