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Relevant legislation and authorities
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  1. Is a merger control regulation in force?
  1. Which authorities enforce the merger control regulation?
  1. Relevant regulations and guidelines with links:
  1. Does general competition regulation apply to mergers or ancillary restrictions?
  1. May an authority order a split-up of a business irrespective of a merger?
  1. Other authorities that also require merger filing or may prohibit transaction
    (Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
  1. Are any parts of the territory exempted or covered by particular regulation?
Voluntary or mandatory filing
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  1. Is merger filing mandatory or voluntary?
Types of transactions to file – what constitutes a merger
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  1. Is there a general definition of transactions subject to merger control?
  1. Is "change of control" of a business required?
  1. How is "control" defined?
  1. Acquisition of a minority interest
  1. Joint ventures/joint control – which transactions constitute mergers?
Thresholds that decide whether a merger notification must be filed
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  1. Which thresholds decide whether a merger notification must be filed?
  1. Special thresholds for particular businesses
  1. Rules on calculation and geographical allocation of turnover
  1. Special rules on calculation of turnover for particular businesses
  1. Series of transactions that must be treated as one transaction
Exempted transactions and industries (no merger control even if thresholds ARE met)
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  1. Temporary change of control
  1. Special industries, owners or types of transactions
  1. Transactions involving only foreign businesses (foreign-to-foreign)
  1. No overlap of activities of the parties
  1. Other exemptions from notification duty even if thresholds ARE met?
Merger control even if thresholds are NOT met
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  1. May a merging party file voluntarily even if the thresholds are not exceeded?
  1. May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
Referral to and from other authorities
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  1. Referral within the jurisdiction
  1. Referral from another jurisdiction
  1. Referral to another jurisdiction
  1. May the merging parties request or oppose a referral decision?
Filing requirements and fees
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  1. Stage of transaction when notification must be filed
  1. Pre-notification consultations
  1. Special rules for acquisitions on stock exchanges and public takeover bids
  1. Forms available for completing a notification
  1. Languages that may be applied in notifications and communication
  1. Documents that must be supplied with notification
  1. Filing fees
Implementation of merger before approval – "gun jumping" and "carve out"
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  1. Is implementation of the merger before approval prohibited?
  1. May the parties get permission to implement before approval?
  1. Due diligence and other preparatory steps
  1. Veto rights before closing and “Ordinary course of business” clauses
  1. Implementation outside the jurisdiction before approval – "Carve out"
  1. Consequences of implementing without approval/permission
The process – phases and deadlines
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  1. Phases and deadlines
Assessment and remedies/decisions
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  1. Tests or criteria applied when a merger is assessed
  1. May any non-competition issues be considered?
  1. Special tests or criteria applicable for joint ventures
  1. Decisions and remedies/commitments available
Publicity and access to the file
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  1. How and when will details about the merger be published?
  1. Access to the file for the merging parties and third parties
Judicial review
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  1. Who can appeal and what may be appealed?

 
ARGENTINA

Luis Diego Barry
Partner

ldb@pagbam.com

Tel: +5411-4114-3042

María Carolina Abdelnabe Vila
Counselor

mcav@pagbam.com

Tel: +5411-4114-3000 Ext. 3052

María Clara Rodriguez Llanos
Associate

mcrl@pagbam.com

Tel: +5411-4114-3000 Ext. 3157

Sonia Del Regno
Associate

sdr@pagbam.com

Tel: +5411-4114-3086

Adopted new regulation

The Defence of Competition Act No. 27,442 was adopted on 24 May 2018, however not all its provisions have been implemented yet, and it is not clear when the remaining changes will be implemented. Most of the changes are already implemented. The only changes that have not been implemented yet are 1) the introduction of ex-ante merger control, ie. a regime that requires the parties not to implement the merger before approval from the relevant competition authority, and 2) introduction of a new competition authority, the ANC. 

Proposed new regulation

In February 2019 a draft guide for merger notification was published. The draft guide clarifies the Defence of Competition Act No. 27,442 obligations and requirements. Besides, it includes the principles set in CNDC precedents.  

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control is mainly regulated in the Defence of Competition Act No. 27,442 (Ley de Defensa de la Competencia), as implemented by Regulatory Decree No 480/2018 and Resolution No 40/2001.

2) Which authorities enforce the merger control regulation?

Although the Defence of Competition Act establishes that the authority should be a body named the National Competition Authority (the ANC), this authority has not been created yet. Until its creation the enforcement authority continues to be the one set forth in the former Defence of Competition Act No. 25,156. This is, the National Commission for the Defence of Competition (the CNDC) and the Secretary of Commerce (the SIC).  In this guide, both the CNDC and the SIC may be referred to as the Antitrust Authority. 

The CNDC (i) receives merger notifications; (ii) performs appropriate investigations of the potential impact on competition; and (iii) provides a report to the SIC called a “Dictamen”, which contains the CNDC’s assessment of the impacts on competition of each notified transaction, as well as a recommended course of action.

The SIC is the authority that issues the binding resolution, and is not required to follow the recommendations of the CNDC.

3) Relevant regulations and guidelines with links:

Links to the relevant legislation, guidelines and forms are listed here:

Original Spanish version

Unofficial English translation (if available)

Ley de Defensa de la Competencia (No. 27,442)

The Defence of Competition Act 

Regulatory Decree 480/2018

By means of this Regulatory Decree some points of the Defence of Competition Act are clarified and/or regulated 

 

Guide for the notification of economic concentrations (Resolution 40/2001)

(Includes notification form)

 

Resolution 26/2006

Regarding consultative opinions from the CNDC on whether a transaction is subject to merger control.

 

Lineamientos para el Control de las Concentraciones Económicas (Resolution 208/2018)

Guidelines for Controlling Economic Concentration Operations (Resolution 208/2018)

In February 2019 a draft guide for merger notification was published aiming to clarify the Defence of Competition Act No. 27,442 obligations and requirements: 

Original Spanish version

Unofficial English translation (if available)

Proyecto de Guía para
la Notificación de Operaciones de Concentración Económica

Draft Guide for Merger Notification

 

4) Does general competition regulation apply to mergers or ancillary restrictions?

Yes, the general prohibition against restrictions of competition in the Defence of Competition Act applies to mergers and ancillary restrictions regardless of whether the transaction meets the thresholds for merger filing or not.

Ancillary restrictions are usually analysed along with the merger and are not subject to separate scrutiny.  

In rare cases these ancillary restrictions may be used to oppose a transaction. Also, although it is rare, restrictions that go beyond what may be considered ancillary may entail an antitrust investigation. These scenarios are probably only of interest if the transaction does not meet the thresholds for merger filing.

5) May an authority order a split-up of a business irrespective of a merger?

Yes, the Antitrust Authority may impose conditions that aim to neutralize the distorting effects of competition. However, to order the split-up of a business, the Antitrust Authority must have Court assistance. 

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Financial businesses

Mergers between two or more financial institutions registered with the Argentina Central Bank (BCRA), such as banks, credit institutions and investment service companies, must be submitted to the BCRA for approval. 

Internet, telephone, radio, and television services

Mergers between two or more businesses that provide internet, telephone, radio and/or television services are subject to approval by the Argentine National Communications Agency (Ente Nacional de Comunicaciones). 

Insurance companies

Mergers involving insurance companies require approval from the Insurance Regulator (Superintendencia de Seguros de la Nación).

Listed companies

If a merger involves one or more listed companies and certain criteria are met, the approval of the Comisión Nacional de Valoresis is required.  

Companies that provide public services

Mergers involving companies that provide public services are subject to Public Regulator’s control, i.e. ENRE (Electricity National Regulator) and ENARGAS (Gas National Regulator).

7) Are any parts of the territory exempted or covered by particular regulation?

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Filing is mandatory if the merger entails a change of control and the relevant thresholds are met. Notifying the transaction is mandatory for the acquirer and merging parties, and optional for the seller.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes, transactions subject to review and approval are those listed below when they entail a change of control of a business (provided the relevant thresholds described in topic 14 are met):

a) Mergers between companies; 

b) Goodwill transfer; 

c) The acquisition of shares or any interest in shares or capital holdings or debt securities granting any rights to be converted in shares or capital holdings or to have any type of influence on the decisions of the issuer when such acquisition grants the acquirer control or substantial influence over it; 

d) Any agreement or act transferring, whether legally or factually, to a person or economic group the assets of a company or granting major influence on the making of decisions regarding the ordinary and special administration of a company; and

e) Any of the situations mentioned in section c) herein, which may involve the acquisition of substantial influence in the competitive strategy of a company.

10) Is "change of control" of a business required?

Yes, a transaction will only be subject to control if it results in a change of control over a business.

11) How is “control” defined?

The concept of “control” is defined in a very broad manner, and includes any type of control exercised de jureor de facto by individuals or a company (exclusive or jointly) over another company. This does not necessarily require owning more than 50% of the shares of a company. A shareholder may be deemed to control a company as a consequence of certain rights granted by contract, the relevant by-laws, or otherwise (for example, because of the dispersion of shares among a large number of minority shareholders). 

Ownership of bonds, debentures, non-voting shares or debt securities of companies will not in itself constitute control. 

The analysis conducted by the CNDC to determine the existence of control is very much factually driven.

Acquisition of “ substantial influence" is subject to the same treatment as a change of control. Substantial influence occurs when an individual or a company has the right to (i) influence important decisions of a company (competitive and commercial strategy); or (ii) block decisions relating to day-to-day business, approval of business plans, appointment of directors or key employees and other decisions beyond standard minority shareholder veto rights.

12) Acquisition of a minority interest

Acquisition of a minority interest is not subject to approval if it does not result in the acquirer taking control over a business, unless it grants the acquirer substantial influence over the business. 

Substantial influence refers to the rights that the purchaser may exercise, such as vetoing decisions in the target business that exceed standard minority shareholder veto rights. Substantial influence may be obtained by means of rights granted under the terms of the by-laws, or a shareholder’s agreement, or pursuant to any de facto agreement.

13) Joint ventures/joint control – which transactions constitute mergers?

Joint ventures have no particular treatment under the merger regulation. Most of them are indirectly covered by mandatory notification when a change of control involves one or more undertakings. On the other hand, greenfield joint ventures are not reportable.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?

a) Turnover thresholds

The transactions subject to approval are those listed in topic 9, when the turnover in Argentina of the involved businesses exceeds in total, on an annual basis, the amount equivalent to one hundred million (100,000,000) adjustable units (currently 4,061,000,000 Argentine pesos) and the values applicable in the de minimis exemption under topic 14.c are exceeded. Please also see topic 20 regarding exemption of transactions involving only one party with significant turnover in Argentina.

b) Market share thresholds

N/A

c) Value of transaction thresholds

A transaction is exempted from the notification obligation when each of (i) the total purchase price involved in the transaction and (ii) the value of the assets located in Argentina which are being absorbed, acquired, transferred or controlled do not exceed twenty million (20,000,000) adjustable units (currently, 812,200,000 Argentine pesos), unless, during the preceding 12 months, the acquirer has been involved in transactions that jointly exceed such amount or an amount equivalent to sixty million (60,000,000) adjustable units (currently, 2,436,600,000 Argentine pesos) in the last 36 months provided in both cases that the transactions include businesses in the same relevant market.

d) Assets requirements

See topic 14.c.

e) Other

N/A

15) Special thresholds for particular businesses

N/A

16) Rules on calculation and geographical allocation of turnover

The relevant turnover includes the total sales of products and services during the last fiscal year in Argentina by the businesses involved in the transaction, minus discounts, VAT and other taxes imposed directly on sales. For purposes of determining whether a transaction meets the monetary threshold, the businesses involved in the transaction include: (i) the business being acquired (including the businesses controlled by it); and (ii) the business that acquires or takes control (including those which control, are controlled by or are under common control of the buyer). In other words, all turnover of any businesses ultimately controlled by the same entity as the buyer is included, whereas the selling entity and its parents and affiliates are not considered for the purposes of calculating the turnover.

Generally, turnover from products and services sold to customers who are resident in Argentina at the time of entering into the relevant agreement is considered to be Argentine turnover. 

Exports into the Argentine market must be allocated as Argentine turnover only if they are significant, predictable and made on a regular basis. If those sales/exports represent 3% or more of the relevant Argentine market, they are considered significant.  

17) Special rules on calculation of turnover for particular businesses

N/A

18) Series of transactions that must be treated as one transaction

Transactions that are interdependent because they are linked by conditions may be treated as one if control in each transaction is acquired ultimately by the same party/parties.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

There is no exemption for temporary change of control.

20) Special industries, owners or types of transactions

The following transactions are exempted from the review and approval: 

a) The acquisition of only one company in Argentina by only a foreign company not having previous assets (excluding those for dwelling purposes) or shares of another company in Argentina and the exports of which into Argentina have not been significant, usual and frequent during the last 36 months. 

b) Acquisition of companies that have had no activity in the country in the last year, unless the main activities of this company and the acquiring company are the same.

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All transactions that meet the thresholds are subject to merger control legislation regardless of whether the parties settle outside Argentina when they are engaged in business activities, transactions or agreements that have an impact in the Argentine market. Please also see topic 20 regarding transactions involving only one party active in Argentina. 

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities. However, this kind of transactionusually presents no antitrust concerns. 

23) Other exemptions from notification duty even if thresholds ARE met?

No.

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

The merger regulation neither prohibits nor regulates voluntary notifications. On this basis, we are of the opinion that merging parties may notify a transaction even if the thresholds are not met.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

No. The Antitrust Authority has no power to review transactions that do not meet the thresholds. However, the Antitrust Authority may commence an investigation if the transaction results in antitrust infringements and may, eventually, order – with the Court’s assistance – the split-up of business. 

Referral to and from other authorities

26) Referral within the jurisdiction

In cases in which an affected party to the transaction is subject to regulatory control from another authority, the CNDC  must request an opinion on the notified transaction from this regulatory authority within 3 business days after the filing. 

The regulatory authority has 15 business days to issue its opinion. Failure to provide an opinion within this period shall be deemed as a lack of objection from such regulatory authority to the transaction.  Further, the regulatory authority's opinion is not binding on the Antitrust Authority. It should be noted that the aforementioned 15 business days do not suspend the term provided for the Antitrust Authority to reach a resolution on the transaction.

27) Referral from another jurisdiction

No. There is no supranational antitrust authority that can refer mergers to the Antitrust Authority. 

28) Referral to another jurisdiction

No. There is no supranational antitrust authority to which the Antitrust Authority can refer mergers. 

29) May the merging parties request or oppose a referral decision?

No.

Filing requirements and fees

30) Stage of transaction when notification must be filed

Currently, notice of any of the transactions subject to prior review and approval must be filed with the Antitrust Authority (i) prior to closing or (ii) within one week of the earlier of the execution of the respective agreement, the publication of a tender offer or exchange offer, or the actual acquisition of a controlling interest. 

The Defence of Competition Act No. 27,442 provides that change of control cannot take place prior to obtaining the corresponding Antitrust clearance. This regime will be in force after one year counting from the implementation of the ANC, body that has not been created yet (please refer to topic 2).

31) Pre-notification consultations

A consultative opinion procedure allows the parties to request the opinion of the Antitrust Authority on whether notification is mandatory or not. Apart from that there are no pre-notifications consultations.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

N/A

33) Forms available for completing a notification

Resolution No 40/2001 (see link under topic 3) divides the notification procedure into three phases, making a distinction between simple and complex transactions. 

Each phase of the filing has its respective form. Forms F1 and F2, which apply to Phases I and II respectively, are standard forms, while Form F3 is drafted for a specific transaction when the Antitrust Authority requires additional and more detailed information on certain issues. 

For a more detailed explanation see topic 43.

34) Languages that may be applied in notifications and communication

Spanish.

35) Documents that must be supplied with notification

Mandatory documents are:

  1. A power of attorney certified by a public notary and dulylegalized,issued by parties that notify the transaction (Notifying Parties). Notifying the transaction is mandatory for the purchaser and optional for the seller.
  2. A copy of ID if natural persons are notifying parties.
  3. The last balance sheet of local entities if there will be horizontal/vertical relationships as a consequence of the notified transaction.
  4. A copy of the relevant agreements of the transaction.
  5. A copy of any analyses, reports, studies or surveys to which the notifying parties have access in order to evaluate or analyse the transaction in connection with competition conditions, competitors (real or potential) and market situation (if any).
  6. A pre and post-closing corporate chart.

36) Filing fees

Currently there are no filing fees.

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Currently, notification can be made within one week after closing. Therefore, approval is not needed before the transaction is closed / implemented.

The Defence of Competition Act No. 27,442 provides that change of control cannot take place prior to obtaining the corresponding Antitrust clearance. This regime will be in force after one year counting from the implementation of the ANC, body that has not been created yet (please refer to topic 2 and 30). 

38) May the parties get permission to implement before approval?

As stated in topic 37, currently there is no prohibition on completing a merger before approval. 

The Defence of Competition Act No. 27,442 does not provide a proceeding to request such permission.  

39) Due diligence and other preparatory steps

As stated in topic 37, currently there is no prohibition on completing a merger before approval. 

The Defence of Competition Act No. 27,442 is silent on this issue, and there are no guidelines. 

It must be assessed on a case-by-case basis to what extent the seller may disclose business secrets as part of a due diligence and which preparatory steps may be taken before the transaction is completed. 

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary cause of business" clause that prevents the target company from taking decisions outside the cause of its ordinary business until the closing date is generally considered acceptable.

However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses.

Note that veto rights before closing may trigger an obligation to notify the transaction. 

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Argentine part of a transaction to avoid delaying implementation in the rest of the world pending approval in Argentina.

42) Consequences of implementing without approval/permission

Currently, failure to obtain the required approval prior to the completion of the relevant transaction is not penalized. What is penalized is failure to notify the Antitrust Authority, within the specified period, of any transaction that is subject to its review and approval.

In this sense, the failure to notify the transaction in due time is subject to a daily fine for an amount of up to point 0.1% of the consolidated turnover at national level registered by the economic group to which the infringers belong, during the last fiscal year. In case the aforementioned criteria cannot be applied, the fine may not exceed the amount of seven hundred and fifty thousand (750,000) adjustable units (currently, 30,457,500 Argentine pesos).

According to the Defence of Competition Act No. 27,442, closing / implementing a transaction without obtaining the antitrust clearance will be sanctioned as an antitrust infringement and the Antitrust Authority may also impose the obligation to reverse the transaction and remove all of its effects if the transaction restricts or distorts competition in a way that may have an adverse impact on the general economic interest. However, this regime will not come into force until after one year counting from the implementation of the ANC, body that has not been created yet (please refer to topic 2 and 30). 

The process – phases and deadlines

43) Phases and deadlines

The merger regulation divides the approval procedure into three phases, making a distinction between simple transactions and complex transactions. Unfortunately, there is no clear definition of when a transaction is considered simple or complex, and ample discretion is vested in the Antitrust Authority to categorize the transaction. The only explanation provided is that a complex transaction is one that may generate a high level of participation in the relevant market. 

Each phase of the filing has its respective form, which must be completed by the Notifying Parties. Form F1 and Form F2, which apply to Phase I and Phase II, respectively, are standard forms, and Form F3 is created especially for a specific transaction, when the Antitrust Authority requires additional and more detailed information on certain issues of the particular case.

Phase Duration/deadline

Phase I - Abbreviated Filing 

All notifications are initiated by filing Form F1. But the notifying parties may elect to file Form F2 simultaneously with Form F1. This practice will expedite approval proceedings in cases of transactions that will most certainly require the filing of a Form F2.

The anti-trust authorities must resolve:

  1. to authorize the transaction; or
  2. to request the information contained in Form F2 when, in the Antitrust Authority's sole judgment, the information in Form F1 is insufficient to decide whether the transaction may be authorized.

At any time prior to this resolution, the Antitrust Authority may require the notifying parties to duly complete Form F1, if the Antitrust Authority deems that it has not been fully complied with.

15 business days counted from the date of complete Form F1 filing.

(In practice the process is often much longer. See information about suspension of deadlines below this table)

Phase II

This phase begins upon the filing of Form F2.  

The information requested in Form F2 has the purpose of providing the information necessary for the Antitrust Authority to define with more precision the market affected by the transaction, as well as the level of concentration such a transaction creates.

The Antitrust Authority must resolve:

  1. to authorize the transaction;
  2. to deny or place conditions on the transaction; or
  3. to require the filing of Form F3 when, in the Antitrust Authority's sole judgment, the information on Form F2 is insufficient to decide whether the transaction may be authorized, or must be denied or conditioned.

At any time prior to this resolution, the Antitrust Authority may require the notifying parties to duly complete Form F2 (or Form F1 and Form F2 if the parties made a simultaneous filing) if the Antitrust Authority deems that either Form F1 and/or Form F2 have not been fully complied with.

35 business days, counted from the date of complete Form F1 filing. 

(In practice the process is often much longer. See information about suspension of deadlines below this table)

Phase III

This phase is initiated when the Antitrust Authority requires the notifying parties to file Form F3.  This Form is not standard and is created on a case by case basis, to address the specific information requirements of a given transaction and of the market to which the transaction relates.

45 business days, counted from the date of complete Form F1 filing.

(In practice the process is often much longer. See information about suspension of deadlines below this table)

 

All abovementioned deadlines will be suspended:

  1. as from the time the Antitrust Authority requires the filing of Forms F2 or F3 and until such filing is made;
  2. as from the time the Antitrust Authority requires the filing of missing information from either Forms F1, F2 or F3 and until such information is duly completed;
  3. when, as permitted in the merger regulation, the Antitrust Authority decides to suspend the term pursuant to a resolution, on the basis of specified grounds.

The notification procedure will lapse and become ineffective if the notifying parties do not provide the information requested by the Antitrust Authority within 30 days of its request. 

Even in relatively simple transactions, the approval process often involves no less than six months.  This longer period, relative to the time limits stated in the merger regulation, is due to the ability of the Antitrust Authority to suspend the proceedings by requiring additional information.  However, the current Antitrust Authority is trying to reduce the approval period.

If the Antitrust Authority fails to resolve a request for approval within the terms specified for the different phases plus any applicable suspension, the transaction shall be deemed to have been tacitly approved by the Antitrust Authority.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

The merger regulation prohibits economic concentrations that have as a purpose or effect a restriction or distortion of competition in a way that may have an adverse impact on the general economic interest.

The Guidelines for Controlling Economic Concentration Operations sets the economic methodology for assessing the competitive impact of a merger. The Guidelines focus on horizontal mergers, but are also relevant for assessment of vertical and conglomerate mergers.

In the Guidelines it is established that:

  • If the involved companies’ joint market share is lower than 20%, the transaction would not prima facie be considered harmful to market competition.
  • A transaction is presumed to not be harmful to competition if: (i) after its completion the Herfindahl-Hirschmann Index (HHI) is lower than 2000 points; or (ii) its completion implies a growth of less than 150 HHI points and the involved companies do not have a joint market share of more than 50%.
  • A transaction is likely to damage market competition if: (i) it creates or further promotes a dominant position for the involved businesses; or (ii) it concerns a market of differentiated products and an upward pricing pressure (UPP) analysis supported by other indicators show a risk of significant price increases.
  • Possessing a minority stake in a company could be a cause of concern when acquiring control over another company, if competition is discouraged through that minority stake.
  • The negative effects of a transaction could be outweighed if the involved businesses face customers with strong purchasing power.  
  • Certain kinds of clauses, such non-compete or exclusivity clauses, will be subject to special analysis.
  • Acquisition of “Failing Companies” will be approved even if this causes anticompetitive effects, if those companies’ exit from the market is assessed as even worse than the referred effects.
  • Conglomerate transactions could be considered prejudicial and may not be approved if they impede the entrance of a potential competitor or produce “portfolio effects”.

45) May any non-competition issues be considered?

Although there have been cases directed by non-competition criteria, the Legislation does not allow non-competition issues to be considered in the assessment of the transaction.

46) Special tests or criteria applicable for joint ventures

Joint ventures have no particular treatment under the Legislation. Most of them are indirectly covered by mandatory notification when a change of control takes place.

If the joint venture also has coordination between the owners as purpose or effect, it will also be assessed whether such coordination is acceptable under the Antitrust Control over anti-competitive agreements.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or prohibited.

If the Antitrust Authority expresses serious concerns about the merger, it is important that the parties enter into negotiations of possible commitments. In this sense, even though there is no legal provision requiring the parties to propose remedies for potential competition issues, in many occasions parties offered remedies that were later accepted by the Antitrust Authority.

From the relevant precedents of the Antitrust Authority, it can be concluded that it seeks to create the market conditions necessary to remedy the adverse consequences of any given transaction that may affect competition. Therefore, commitments may take any form and they can be either structural or behavioural and with or without time limitations.

The authority may revoke an approval if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions/commitments contained in the approval.

Publicity and access to the file

48) How and when will details about the merger be published?

Once the transaction has been notified, the Antitrust Authority publishes all the non-confidential information on its website so that third parties can oppose to the transaction. 

Third parties can file presentations before the Antitrust Authority expressing their opinion regarding the transaction. In addition, in complex transactions the Antitrust Authority may request the opinion of the relevant players in the market. When the transaction involves a regulated sector of the economy, the Antitrust Authority will request an opinion from the regulatory entity (see topic 26). The Authority is not obliged to respond to third parties oppositions but must inform the Notifying Parties of such oppositions.

Notwithstanding the above, third parties or other governmental agencies cannot obtain access to the filing itself (see topic 49).

Only once the Antitrust Authority has issued its decision (approving, rejecting or placing conditions on the transaction) are details of the merger made public.  In this sense, and given that the resolution is public, the parties may request confidential treatment of some information provided in the filing so that it will not be referred to in that public document. Confidentiality will be granted, provided certain criteria are met and that the parties provide a non-confidential summary of the confidential information. 

49) Access to the file for the merging parties and third parties

The merging parties:

The Notifying Parties have a right to access the entire file. However, the Antitrust Authority may restrict access to certain confidential information. This confidential information may relate to third parties or even may refer to the notifying parties (the seller may have restricted access to confidential information about the buyer and vice versa).  

Third parties:

Third parties or other governmental agencies cannot obtain access to notification materials. 

Judicial review

50) Who can appeal and what may be appealed?

The merger regulation provides that the Notifying Parties may appeal: (i) a decision that prohibits the transaction; and (ii) the imposition of conditions on the approval of the transaction.

The Federal Civil and Commercial Court of Appeals is the judicial authority entitled to analyse challenged Antitrust Authority’s decisions.

 


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