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Select Topics
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?

 
AUSTRIA

Dr. Dieter Zandler, LL.M.
Partner

dieter.zandler@cms-rrh.com

Tel: +43 1 40443 4250

Dr. Bernt Elsner
Partner

Bernt.elsner@cms-rrh.com

Tel: +43 1 40443 1850

Marlene Wimmer-Nistelberger, LL.M.
Attorney-at-Law

marlene.wimmer@cms-rrh.com

Tel: +43 1 40443 5150

Vanessa Horaceck
Associate

vanessa.horaceck@cms-rrh.com

Tel: +43 1 40443 5150

No new regulation adopted or proposed

Note that relevant regulations may be changed before your contemplated transaction is completed. Mergerfilers.com and our national experts keep information on regulations up to date and even provide alerts on adopted or proposed changes that have not come into force yet but may come into effect before the transaction is completed. When this field is green, we have no knowledge of such imminent changes to the relevant regulations.

(Content available free of charge at Mergerfilers.com - sponsored by CMS)

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. The Austrian merger control rules are set out in Part I, Chapter 3 of the Austrian Cartel Act 2005 ("Cartel Act").

2) Which authorities enforce the merger control regulation?

The institutional structure of merger control in Austria is split between the following bodies: 

Merger notifications have to be submitted to the Federal Competition Authority ("FCA") and are then also forwarded to the Federal Cartel Prosecutor. In this guide, the FCA and the Federal Cartel Prosecutor together are referred to as the "Competition Authorities".

The Competition Authorities have the exclusive right to initiate phase II proceedings by applying for an in-depth examination of a merger before the cartel court (the Higher Regional Court of Vienna acting as cartel court). The decisions of the cartel court may be appealed to the Austrian Supreme Court (acting as supreme cartel court).

3) Relevant regulations and guidelines with links:

The Austrian merger control regime is primarily laid down in Part I, Chapter 3 of the Cartel Act. In addition, the Austrian Competition Act contains some procedural provisions concerning merger control proceedings. Links to the relevant legislation, guidelines and the form CO published by the FCA are listed below:

Original German version

Unofficial English translation

Kartellgesetz 2005 (BGBl. I Nr. 61/2005 idF BGBl. I Nr. 109/2019)

The Austrian Cartel Act

Wettbewerbsgesetz (BGBl. I Nr. 62/2002 idF BGBl. I Nr. 32/2018)

The Austrian Competition Act, as amended on 21 September 2017

Bundeswettbewerbsbehörde/Bundeskartellamt, Leitfaden Transaktionswert-Schwellen für die Anmeldepflicht von Zusammenschlussvorhaben

FCA and German Federal Cartel Office, Guidance on Transaction Value Thresholds for Mandatory Pre-merger Notification

Standpunkt zur Anmeldebedürftigkeit von Zusammenschlüssen - Umsatzberechnung zum Zeitpunkt des Erwerbs

Standpoint (NB: Term used by FCA on its English website) on the notification requirement of mergers - calculation of turnover at the time of acquisition (translation into English not available)

Standpunkt zur Abgabe von Prüfungsverzichten

Standpoint on waivers of requesting an in-depth examination of a merger by the Competition Authorities (translation into English not available)

Standpunkt zur Inlandsauswirkungen von Zusammenschlüssen

Standpoint on the domestic effects of mergers (translation into English not available)

Standpunkt zu Kooperation mit den Amtsparteien in Zusammenschlussverfahren

Standpoint on the cooperation with theCompetition Authorities in merger proceedings (translation into English not available)

Standpunkt zur Zurückziehung des Prüfungsantrages infolge der Zurückziehung einer Anmeldung

Standpoint on the withdrawal of a request for in-depth examination following the withdrawal of a merger notification (translation into English not available)

Standpunkt zur Mangelhaften/unvollständigen Anmeldung eines Zusammenschlusses – Vorgehen der Amtsparteien

Standpoint on insufficient/incomplete merger notifications - approach by theCompetition Authorities (translation into English not available)

Leitfaden - Zusammenschlusskontrolle und Insolvenzverfahren

Standpoint on merger control and insolvency proceedings (translation into English not available)

Formblatt für Zusammenschlüsse (also providing for a simplified notification), German language version available in Word format on the website of the FCA here

Merger Notification Form, suggested by the Competition Authorities (translation into English not available)

Investitionskontrollgesetz (BGBl. I Nr. 87/2020)

The Austrian Investment Control Act (translation into English not available)

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

Austrian competition law is interpreted in accordance with EU competition law in this respect. Therefore, while not directly applicable, the principles contained in the European Commission's Notice on Ancillary Restraints are also relevant for the assessment of ancillary restrictions.

Pursuant to case law, restrictions of competition that are ancillary to the merger are considered as integral parts of the merger and are not subject to separate review under the general competition regulation. Thus, merger control clearance also extends to ancillary restrictions, provided they are directly related and necessary to the implementation of the merger. However, the assessment whether a restriction is ancillary or not is generally not part of the merger control proceedings but within the responsibility of the parties to the merger.

Restrictions that go beyond what may be considered objectively necessary, proportionate and directly related to the merger are subject to general competition regulation, provided that they fall outside the scope of the merger or the market effects inevitably linked to the merger. Pursuant to case law, restrictions of competition resulting from the merger itself (or from market effects inevitably linked to the merger) are only reviewed under the substantive test under the merger control regime (creation or strengthening of a dominant position) and are not subject to the rules governing restrictive agreements.

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

The cartel court can impose orders on undertakings in order to terminate any infringements of prohibitions under the Cartel Act (i.e. also in connection with the general prohibition of restrictive agreements or the abuse of dominance). In this context, the cartel court may also impose structural remedies to terminate an infringement (e.g. a split-up of a business). 

However, a change to the structure of an undertaking may only be imposed by the cartel court where no other equally effective measures are available or where other equally effective measures would be more burdensome for the undertakings concerned (ultima ratio principle).

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 services:

Mergers involving the acquisition of a qualifying participation (10 % of the share capital or voting rights) or the increase of a qualifying participation so that the thresholds of 20 %, 30 % or 50 % of the share capital or voting rights are reached or exceeded in any of the following financial services undertakings require prior approval from the Financial Markets Authority:

  1. Credit institutions under the Austrian Banking Act;
  2. Insurance companies under the Austrian Insurance Supervision Act; and
  3. Investment firms and investment services providers under the Austrian Securities Supervision Act. 

The Financial Markets Authority may either prohibit or clear the acquisition. Comparable to the standstill obligation applicable for merger control under the Cartel Act, the voting rights for the shares or participations cannot be exercised within this assessment period. Non-compliance with these rules inter alia is sanctioned with fines. 

Similar procedures exist in cases of acquisitions of qualifying holdings in CRR-governed financial services firms which are supervised by the European Central Bank.

Provided that such transfers constitute a merger under the Cartel Act and the relevant turnover thresholds are met, the mergers in the financial services sectors listed above may in parallel require a merger filing with the FCA. 

Broadcasting and Telecommunications:

Mergers involving the transfer of frequency usage rights or the significant changes to the ownership structure of companies having frequency usage rights must be notified to the Telekom Control-Commission. The Telekom Control-Commission may clear, clear with remedies/commitments or prohibit such mergers.

If such transfers constitute a merger under the Cartel Act and the applicable turnover thresholds are exceeded, such transaction must also be notified with the FCA. 

Security or public order:

Under the Austrian Investment Control Act (Investitionskontrollgesetz, "ICA") acquisition of an Austrian undertaking active in certain sectors by a foreign investor is subject to approval from the Minister for Digitalization and Economic Affairs.

Approval is required for acquisition of:

  1. voting rights reaching/exceeding 10 %, 25 % and 50 %,
  2. a decisive influence, or
  3. essential/all assets

of an Austrian undertaking (i.e. having its seat or head office in Austria) provided that the direct or indirect investor is alegal person outside the EU, EEA or Switzerland or a natural person not having the citizenship of an EU/EEA country or Switzerland.

Investments in certain highly sensitive sectors listed (exhaustively) in part 1 of the Annex to the ICA are subject to the 10 %, 25 % and 50 % share (voting rights) threshold, including:

  • Defence equipment and technology;
  • Providing/operating critical energy infrastructure;
  • Providing/operating critical digital infrastructure, in particular 5G infrastructure;
  • Water;
  • Providing/operating systems that safeguard the data sovereignty of the Republic of Austria; and
  • R&D in the fields of pharmaceuticals, vaccines, medical devices and personal protective equipment.

For investments in other sectors that may affect security or public order listed (non-exhaustively) in part 2 of the Annex to the ICA, only the 25 % and 50 % share thresholds (voting rights) apply. Such other sectors include:

  • Critical infrastructure, notably energy, information technology, traffic and transportation, health, food, telecommunications, data processing and storage, defence, constitutional institutions, finance, research facilities and institutions, social and welfare systems, chemical industry and investments in land and real estate crucial for the use of such infrastructure;
  • Critical technologies and dual-use items as defined in EU Regulation No 428/2009; notably artificial intelligence, robotics, semiconductors, cybersecurity, defence technology, quantum and nuclear technologies, nano- and biotechnologies;
  • The supply of critical inputs/resources, including energy or raw materials, food security, medicines, vaccines, medical devices and personal protective equipment as well as R&D in these areas;
  • Access to sensitive information, including personal data or the ability to control such information; and
  • Freedom and pluralism of the media.

Excluded are undertakings with (i) fewer than 10 employees and (ii) an annual turnover or annual balance sheet total of less than EUR 2 million (de-minimis exemption).

Please note that the ICA also covers indirect acquisitions. Thus, acquisitions by an EU, EEA or Swiss natural or legal person may also trigger a filing obligation if such direct acquirer is ultimately controlled by a foreign investor.

The notification obligation primarily rests with the acquirer(s), however, the ICA includes a reporting obligation of the target in case the acquirer(s) have not submitted a notification. In addition, the competent secretary can assume jurisdiction ex officio after obtaining knowledge of a transaction subject to approval that has not been notified (after requesting the acquirer(s) to file a notification within three working days).

Following the notification, the European Commission and EU Member States can comment on the transaction within a 35-day period under the EU consultation mechanism of the EU-FDI Screening Regulation (EU) 2019/452 (which can be extended if information is only requested later or another EU Member State submits comments). After expiry of the consultation period, the competent secretary must within one month either (i) approve the transaction by decision or (ii) give notice to initiate an in-depth investigation. In the latter case, the transaction must within 2 months either be (i) approved, (ii) approved subject to commitments or (iii) prohibited. If no decision/notice is delivered within these time frames, the acquisition is deemed to be approved.

Non-compliance with these rules is subject to criminal sanctions and fines. In particular, implementation without clearance qualifies as a criminal offence and is sanctioned with a penalty of imprisonment of up to one year (up to three years in case of certain qualified offences). Agreements violating this standstill obligation are likely to be considered (provisionally) invalid until approval is obtained.

If such transfers constitute a merger under the Cartel Act and the applicable turnover thresholds are exceeded, such transaction must also be notified with the FCA. 

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

No. The Cartel Act covers the whole territory of Austria.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Filing is mandatory, provided the transaction constitutes a merger within the meaning of the Cartel Act and the relevant filing thresholds are met. 

Types of transactions to file – what constitutes a merger

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

Yes, pursuant to the Cartel Act, the following transactions are subject to merger control:

  1. the acquisition by one undertaking of all, or a substantial part of, the assets of another undertaking, especially by merger or transformation;
  2. the acquisition of rights by one undertaking in the business of another undertaking by means of a management or lease agreement;
  3. the direct or indirect acquisition of shares in one undertaking by another undertaking if, as a result, a participation of 25 % or 50 % (capital or voting rights) is reached or exceeded;
  4. the establishment of interlocking directorates at the management or supervisory board level (if at least half of the members of the management board or the supervisory boards of two or more undertakings are identical);
  5. any other connection of undertakings conferring on one undertaking the possibility of exercising, directly or indirectly, a decisive influence over another undertaking; and
  6. the establishment of a full-function joint venture.

Note that also the establishment of non-full function joint ventures can be subject to merger control if the transaction falls under any of the other types of mergers set out above (e.g. if one of the parent companies transfers a "substantial part of an undertaking" into a joint venture). Furthermore, pursuant to the case law, also the acquisition of a participation of less than 25 % in an undertaking can be subject to merger control if the acquirer secures rights that are comparable to the rights of a 25 % shareholder under statutory rules in case a filing obligation would otherwise be circumvented.

Generally, transactions of a temporary nature are not subject to merger control (see topics 19 and 20).

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

No. Under the Austrian merger control regime, every transaction that qualifies as a merger may also be subject to merger control (see topic 9). For example, also acquisitions of 25 % or more of the shares or voting rights of an undertaking are considered a merger, irrespective of whether control over the undertaking is acquired (see topic 9 and 12).

11) How is “control” defined?

The Austrian merger control rules do not contain a definition of "control". However, the definition of a merger also covers transactions "conferring on one undertaking the possibility of exercising, directly or indirectly, a decisive influence over another undertaking". 

In practice, the concept of control is interpreted in accordance with the EU merger regulation and the European Commission's Consolidated Jurisdictional Notice. As "the possibility of exercising […] a decisive influence" is interpreted in line with Art 3 (2) of the EU Merger Regulation, the notion of "control" as defined by the EU Merger Regulation also applies under Austrian law. 

Control may be held solely by one person or business or jointly by several persons or businesses. Establishment of joint control as well as changes in the group of owners with a controlling interest constitute a change of control.

12) Acquisition of a minority interest

Acquisitions of a minority interest may be subject to Austrian merger control in case the transaction qualifies as a merger (see topics 9 and 10). 

In particular, a transaction may be subject to Austrian merger control in case of a direct or indirect acquisition of shares in one undertaking by another undertaking if, as a result, a participation of 25 % or 50 % (capital or voting rights) is reached or exceeded. Furthermore, if an acquisition of a minority interest confers control over an undertaking, the transaction may also be subject to merger control. 

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

The following transactions may be subject to merger control:

  1. Establishment of a full-function joint venture;
  2. Establishment of a non-full-function joint venture, if the transaction qualifies as a merger (see topic 9);
  3. Change from joint to sole control;
  4. Dissolution – provided (part of) the business of the joint venture is transferred to one or more of the businesses controlling the joint venture or a third party;
  5. Change in or extension of the activities of a joint venture – provided that further assets, contracts, know-how, rights, etc. are transferred from parent companies to the joint venture (e.g. if one of the parent companies transfers a "substantial part of an undertaking" into the joint venture);
  6. Change in participants/owners – for instance if one of the controlling businesses sells its share in a joint venture to another business, or if one of the controlling businesses is acquired by another business.

A joint venture is considered "full-function" if it performs all the functions of an autonomous economic entity on a lasting basis. Whether a joint venture is considered "full function" or non-full-function depends on the level of the joint venture's dependence on its parents and to what extent the joint venture has an independent presence in the market.

Thresholds that decide whether a merger notification must be filed

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

a) Turnover thresholds

A merger notification must be filed if the following turnover thresholds are met by the undertakings concerned in the last financial year:

  1. the combined worldwide turnover of all the undertakings concerned exceeded EUR 300 million;
  2. the combined Austrian turnover of all the undertakings concerned exceeded EUR 30 million; and
  3. the individual worldwide turnover of at least two of the undertakings concerned each exceeded EUR 5 million.

Even where the above thresholds are met, no notification has to be made if in the last financial year:

  1. only one of the undertakings concerned had a turnover of more than EUR 5 million in Austria and 
  2. the worldwide turnover of all the other undertakings concerned did not exceed EUR 30 million.

b) Market share thresholds

N/A

c) Value of transaction thresholds

In 2017, a new alternative threshold based on the value of consideration for the transaction came into force. Even if the above turnover thresholds are not met, a transaction needs to be notified if:

  1. the combined worldwide turnover of all the undertakings concerned exceeds EUR 300 million;
  2. the combined Austrian turnover of all the undertakings exceeds EUR 15 million;
  3. the value of the consideration for the transaction exceeds EUR 200 million; and
  4. the target is active in Austria to a significant extent.

In order to help with the interpretation of these requirements, the FCA and the German Federal Cartel Office published a joint guidance paper on the application of the new transaction value threshold (see topic 3). Pursuant to this guidance, the "consideration value" includes all forms of cash payments, securities, unlisted securities or shares, assets and considerations received by the seller. In addition, also the liabilities of the target and the seller taken on by the acquirer have to be added to the purchase price in order to determine the value of consideration. 

The requirement of significant domestic operations was introduced to exclude transactions where the target has only marginal or non-market-oriented activities in Austria. In addition to current sales activities, active users or activities aimed at market entry, also the Austrian turnover or having a location in Austria (except in case of a site for a mere financial holding) are considered as indicators for a significant domestic activity of the target.

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

The thresholds stated in topic 14 apply to all transactions; there are no sector-specific thresholds. For media-mergers, multipliers apply to determine whether the turnover thresholds are met (see topic 17).

16) Rules on calculation and geographical allocation of turnover

Turnover is calculated on the basis of the audited accounts of the undertakings concerned of the last financial year before closing. In the event of permanent changes to the businesses of the undertakings concerned (such as acquisitions or divestments) which are not already (fully) reflected in the accounts of the last financial year before closing, the turnover must be adjusted accordingly. 

Austrian merger control rules require that not only the turnover of all (directly or indirectly) controlling shareholdings and shareholders, but also the turnover of all (directly or indirectly) non-controlling shareholdings and shareholders with a participation (capital or voting rights) of at least 25 % must be fully attributed. This far-reaching attribution of turnover has been restricted by case law to the extent that indirect shareholdings only have to be considered if a controlling interest links the direct shareholding and the indirect shareholding (e.g. in case company A holds a non-controlling 25 % participation in company B which holds a non-controlling 25 % participation in company C, the turnover of B would be fully attributed to A but the turnover of C would not be attributed to A (and vice versa)).

"Turnover" is the net turnover derived from the sale of products and services in the undertakings ordinary course of business after deduction of (i) sales rebates, (ii) value added tax and other taxes directly related to the sales, and (iii) any turnover between undertakings that belong to the same group (intra-group/internal sales).

As regards the geographical allocation of turnover, no specific Austrian rules on the geographical allocation of the turnover exist. In practice the geographical allocation is made in accordance with the rules set out in the European Commission's Consolidated Jurisdictional Notice. Thus, turnover should be attributed to the place where the customer is located at the time of the transaction. The underlying principle is that turnover should be allocated to the place where competition for the customer in question took place.

17) Special rules on calculation of turnover for particular businesses

There are special rules on calculation of turnover for credit institutions and insurance undertakings. For media mergers, multipliers apply to determine whether the turnover thresholds are met:

Credit institutions

For credit institutions, in order to determine whether the turnover thresholds are met, turnover is calculated as the sum of:

  1. interest income and similar income;
  2. income from securities, i.e. (i) income from shares and other variable yield securities, (ii) income from participating interests, and (iii) income from shares in affiliated undertakings;
  3. commissions receivable; 
  4. net profit from financial operations; and
  5. other operating income. 

Insurance undertakings

For insurance undertakings, the value of the gross premiums is used to determine whether the turnover thresholds are met.

Media mergers

For mergers where at least two participating undertakings are media businesses (or directly or indirectly hold a share of at least 25 % in such undertaking) under Section 8 (1) and (2) of the Cartel Act, certain multipliers must be applied to the turnover: In order to assess whether the combined (worldwide and domestic) turnover thresholds are met, the turnover of media undertakings and media service companies have to be multiplied by 200 and the turnover of media support undertakings have to be multiplied by 20. 

Note that these multipliers also apply in case only one of the undertakings concerned is a media business as defined in Section 8 (1) and (2) of the Cartel Act and one or several media undertakings, media service companies or media support undertakings directly or indirectly hold at least 25 % in at least one other undertaking concerned.

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

There are no specific Austrian rules on how series of transactions or interrelated transactions must be treated. However, the principles in the EU merger regulation concerning interdependent transactions may be used as guidance also for Austria based on the substance over form principle in Section 20 of the Cartel Act. 

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

19) Temporary change of control

Merger filing is only required if there is a change of control on a lasting basis. 

In case of only temporary changes of control, a merger filing is not required. For example, the conclusion of an agreement on veto rights with regard to strategic commercial decisions was not considered a concentration within the meaning of Austrian merger control rules because the agreement was subject to a two-year termination notice. On the other hand, a similar agreement which could only be terminated within a 10-year notice period was considered to be sufficiently permanent by the cartel court. 

In accordance with the European Commission's Consolidated Jurisdictional Notice, a change of control may be considered temporary – and therefore not require a separate merger filing – if it only forms part of an interdependent transaction divided into several steps (see topic 18).

20) Special industries, owners or types of transactions

Pursuant to the Cartel Act there is no obligation to file a merger notification for the following transactions:

  1. acquisition of shares (not assets) of an undertaking by a credit institution if the shares are acquired only for the purpose of resale (within one year);
  2. acquisition of shares (not assets) of an undertaking by a credit institution for the purpose of restructuring an undertaking or to serve as a collateral/security interest for claims against the undertaking (provided that the shares are resold after the end of the restructuring or once the security purpose has ceased); and 
  3. acquisition of shares (not assets) by investment funds or other capital financing companies whose sole purpose is to acquire and manage participations in other companies.

All of the above exemptions only apply if the voting rights attached to the shares are not exercised to determine, directly or indirectly, the competitive behaviour of the undertaking; the voting rights however can be exercised to preserve the full value of the investments or to prepare the sale of the shares, the undertaking, parts of the undertaking or its assets.

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

Foreign-to-foreign mergers that meet the relevant thresholds are generally subject to Austrian merger control. Since the domestic turnover threshold is only based on the parties' combined Austrian turnover, the thresholds can be met even if the target has no sales in Austria.

However, in such cases, no notification requirement exists provided that the Cartel Act is inapplicable due to a lack of domestic effects of a transaction. 

Pursuant to the case law, a transaction normally is considered to have a domestic effect if:

  1. the target is either actually or potentially (i.e., in the foreseeable future) active in Austria; or
  2. the target is active on a market wider than the national market (i.e. European-wide market) which includes Austria, even if it does not provide services in Austria; and/or
  3. the transaction would significantly or directly improve the market position of the acquirer on the Austrian market, e.g. by acquisition of resources (patents, know-how). 

The lack of domestic effect criteria (meaning that a transaction does not require a merger notification in Austria) is applied restrictively by the Competition Authorities. Therefore, in order to minimize the risk of possible fines, it can be advisable to informally inquire the Competition Authorities whether they share the view that a proposed transaction does not require a notification based on its lack of domestic effects. 

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but there is a simplified procedure available if there are no or limited horizontal overlaps and no or limited vertical relationships between the activities of the parties (see topic 33).

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

As a consequence of the EU "one-stop shop" principle, the Austrian merger control rules do not apply if the thresholds for EU merger control are exceeded. 

Excluded from this principle are media mergers, which require a filing with the European Commission and the FCA, if the applicable turnover thresholds are met (see topic 15). In this case, however, the media merger may only be examined by the Competition Authorities (and the cartel courts) in terms of whether it is likely to affect media diversity.

Further, internal restructurings within a group are not subject to merger control.

Merger control even if thresholds are NOT met

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

No, generally the Competition Authorities will only handle a merger notification if the applicable thresholds are met. However, the Competition Authorities cannot reject such a notification themselves, but theoretically would have to submit a request for examination to the cartel court, which then would have to reject the notification on the grounds of absence of a notifiable merger. In practice, in most cases where it is not entirely clear whether the relevant thresholds are met while they do not raise substantive concerns, the Competition Authorities take a pragmatic approach unless any of the parties explicitly requests that the notification is formally rejected. 

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

If the relevant thresholds are not met, the FCA may not request a merger notification.

Other than that, the FCA could potentially investigate a transaction based on the general prohibition of restrictive agreements or on the rules governing the abuse of a dominant position. 

Referral to and from other authorities

26) Referral within the jurisdiction

The Competition Authorities and the cartel courts are the only authorities who may review merger notifications and enforce the Austrian merger control rules. In addition, mergers in certain industry sectors or acquisitions in industries concerning "public safety and order" may also require an additional approval from the competent sector-specific authorities (see topic 6).

27) Referral from another jurisdiction

The Austrian merger control rules do not provide for (additional) provisions for referrals from and to other jurisdictions. Therefore, referrals have to be assessed in accordance with the EU merger regulation and the European Commission's Notice on Case Referral in respect of concentrations (see also topics 28 and 29).

Only mergers from the European Commission may be referred to the FCA for examination:

The European Commission may refer a merger in whole or in part to the FCA where the merger in question affects a distinct market or markets within Austria. Such referrals may be requested either by the notifying party/parties before a merger notification has been filed or by the FCA after a formal filing has been made. In case of a partial referral, the European Commission will continue the examination of the non-referred part, whereas the Competition Authorities will handle the strictly Austrian aspects.

Rules on the conditions and procedure for referrals from the European Commission are set out in Article 4 (4) of the EU Merger Regulation (for requests of the notifying party/parties) and in Article 9 (2) (for requests of the FCA).

Note that only transactions subject to merger control under the Cartel Act (see topic 9) may be referred from the European Commission to the FCA. 

28) Referral to another jurisdiction

Save for referrals to the European Commission, a merger cannot be referred to competition authorities in other jurisdictions.

If the merger is notifiable in at least three EU member states, the notifying party/parties may request at pre-notification stage that a single merger notification is made to the European Commission in place of notifications to each of the relevant national authorities (see topic 29). Article 4 (5) of the EU Merger Regulation provides rules on the specific conditions and procedure for referrals from the European Commission on request of the notifying party/parties.

The FCA may also request the European Commission to examine a merger that does not have an EU dimension within the meaning of Article 1 of the EU Merger Regulation but affects trade between EU member states and threatens to significantly affect competition in Austria after a formal filing has been made under the conditions and procedure laid down in Article 22 of the EU Merger Regulation.

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

The notifying party/parties may request a referral to or from the European Commission in accordance with EU merger control rules (see topics 27 and 28).

On the other hand, the national authorities do not require the consent of the notifying party/parties in order to ask for a referral of a merger under the EU Merger Regulation, although the parties are permitted to make comments opposing referrals both to the European Commission and the FCA.

Filing requirements and fees

30) Stage of transaction when notification must be filed

There is no formal filing deadline for notification of mergers. A notification can be filed as soon as the parties have agreed on the structure and intend to implement the proposed transaction within reasonable time. On the other hand, the conclusion of a binding agreement is not required.

However, merger notifications must be filed prior to the implementation of the transaction as the transaction may not be implemented before merger clearance (standstill obligation).

31) Pre-notification consultations

Under Austrian merger control rules, pre-notification consultations with the Competition Authorities are not required, and although possible, not very common in cases that do not raise any substantive issues. However, it can be beneficial to have pre-notification contacts with the Competition Authorities in more critical cases in order to avoid a lengthy in-depth (phase II) examination before the cartel court or if there are doubts as to whether a filing is necessary, e.g. due to a possible lack of domestic effects (see topic 21).

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

The Austrian merger control rules do not provide for specific rules on timing of notifications in case of public takeover bids or for acquisitions on stock exchanges. 

For public offers for equity participations of Austrian publicly listed companies (and for foreign companies listed in Austria), the specific provisions of the Austrian Takeover Code have to be observed (in addition to possible filing requirements under Austrian merger control rules). In practice, public takeover bids under the Austrian Takeover Code are either made subject to the condition of receiving the required merger (and other regulatory) clearances (e.g. in the form of a voluntary control seeking takeover bid) or are only made after the relevant merger clearances for acquiring a controlling participation (which triggers the obligation to make a mandatory takeover bid) are obtained.

For acquisitions on stock exchanges (and acquisitions of listed securities outside the stock exchange), the rules governing the acquisition of major holdings (e.g. in the Austrian Stock Exchanges Act 2018) also have to be adhered.

33) Forms available for completing a notification

The Competition Authorities have provided a standard filing form which is available on the FCA's website, providing for both a simplified and a full notification (comparable to the form CO/short form CO under the EU Merger Regulation). The filing form is available in German language only. Although the form is not compulsory, its use is encouraged by the Competition Authorities and it is common practice in Austria to prepare filings on the basis of the filing form. 

Pursuant to the filing form, a simplified notification is possible for transactions that do not give rise to affected markets. A market qualifies as affected market if

  1. A dominant position will be created or strengthened or one of the presumptions of dominance pursuant to Section 4(2) of the Cartel Act is met as a result of the merger;
  2. There is a horizontal overlap and the combined market share of the parties to the concentration amounts to 15 % or more;
  3. The parties to the concentration are active on vertically related markets and the market share of one of the parties active on a market that is upstream or downstream to the market where the other party is active amounts to 25 % or more.

Note, however, that the Competition Authorities may always require additional information, even if the conditions for simplified notification are met.

34) Languages that may be applied in notifications and communication

Notifications and communications are in German only. All supporting documents generally must also be submitted in German, although documents in English language are usually accepted by the Competition Authorities in phase I proceedings (e.g. annual reports).

35) Documents that must be supplied with notification

Based on the filing form published by the FCA, the following documents should be provided: 

  1. the audited annual financial statements of the last financial year or annual reports containing the audited annual financial statements of the last financial year for each of the parties to the merger;
  2. structure charts or annual reports containing the necessary information on the corporate structure of the undertakings concerned of each undertaking involved, including all connected undertakings linked with a shareholding of 25 % or more; and 
  3. any documentation on which the parties have based their market definition and assessment of market shares (e.g. analysis, reports, studies, economic statistics, market research or other documents).

Unlike in many other jurisdictions, transaction documents (e.g. share or asset purchase agreement(s), shareholders' agreement, etc) are not required (but may be requested by the Competition Authorities).

In case the transaction results in an affected market, further documents may be relevant, including analyses, reports, business plans for the target or other concerned undertakings and similar documents related to the merger or the affected market(s).

36) Filing fees

The filing fee for phase I for both simplified and full notifications amounts to EUR 3,500, regardless of the size of the transaction or the turnover of the parties to the merger.

Since the initial review period (phase I) only starts running upon receipt of the filing fee by the FCA, the filing fee has to be credited to the FCA's account (or paid in advance with proof of payment) before the notification is submitted. 

In addition, court fees of up to EUR 34,000 may apply in case of an in-depth (phase II) examination of a merger before the cartel court. The amount of these fees depends inter alia on the economic importance of the transaction and the complexity of the case. Please also note that in case the cartel court has appointed economic expert(s) to analyse the transaction, the notifying party/parties are also required to bear the costs of such experts which can be quite significant (often amounting to EUR 100,000 or more).

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

37) Is implementation of the merger before approval prohibited?

Yes. The merging businesses must be run separately and independently until the merger has been approved (standstill obligation). Completion of the merger before binding approval (i.e., expiry of the initial review-period or formal waiver by the Competition Authorities or legally binding decision by the cartel court(s) allowing clearance) is subject to fines. Agreements violating the standstill obligation are invalid.

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

Austrian merger control rules do not provide for the possibility to implement the transaction before approval. 

However, in cases where the transaction does not raise competition concerns, earlier clearance can be requested by petitioning the Competition Authorities to waive their right to initiate an in-depth examination (and thereby approve the merger before expiry of the initial four week phase I review period). In order to obtain such a waiver, the notifying party/parties must demonstrate that

  1. The transaction does not give rise to any plausible competition concerns; and
  2. The reasons why there is an urgent need to implement the transaction before the expiry of the phase I review-period (e.g. financial difficulties of the target requiring a quick completion or refinancing).

As a general rule, the earliest a waiver normally will be granted is after the expiry of the two weeks period for third-party comments (which commences after the information that the filing has been made was made public on the FCA's website, i.e. usually on the day of the filing or the next working day). The issuance of a waiver is in the full discretion of the Competition Authorities and therefore in addition to the above criteria also requires that both Competition Authorities had sufficient time to analyse the transaction (which may also depend on their general workload).

39) Due diligence and other preparatory steps

There are no guidelines on what may be considered acceptable preparatory steps.

Mere preparatory measures such as due diligence are generally permissible. It should be noted that due diligence and preparatory steps have to be conducted in compliance with the general rules concerning restrictive agreements, e.g. with regard to information sharing. Generally, the same standards apply for the permissibility of preparatory actions as under the EU merger regulation.

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

Preparatory measures aimed at preventing a loss of value of the target company during merger control proceedings are generally permissible prior to clearance. Therefore, an "ordinary course of business" covenant that prevents the target company from actions outside its ordinary course of business until the closing date is generally not considered a violation of the standstill obligation.

On the other hand, the granting of veto rights to the acquirer over the target before closing must be assessed on a case-by-case basis in terms of whether the acquirer thereby already may influence the target in a way which could be considered a partial implementation of the merger.

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

There are no specific rules on "carve out" of the Austrian part of a transaction to avoid delaying implementation in the rest of the world pending approval in Austria.

Thus, it must be assessed on a case-by-case basis whether the implementation of a merger outside of Austria and the Austrian part of the transaction being "carved out" are sufficiently autonomous. However, in most cases the Austrian part of the transaction and the rest of the transaction could be regarded as interdependent under the substance over form principle in Section 20 of the Cartel Act. In this case, a "carve-out" often may not be possible.

42) Consequences of implementing without approval/permission

In addition to fines, the main legal consequence of a violation of the standstill obligation is that the agreement violating the stand-still obligation becomes invalid. The amount of the fine depends on the gravity and duration of the infringement and cannot exceed 10 % of the parties' worldwide group turnover in the last financial year. 

Generally, violations of the standstill obligation are regarded as severe infringements with regard to the assessment principles for fines. 

Although the highest fine imposed for a violation of the standstill obligation by the cartel court so far amounts to EUR 1.5 million, in most cases, fines imposed by the cartel court for a violation of the standstill-obligation range from EUR 30,000 to EUR 200,000. 

If the merger is implemented before approval is obtained, the cartel court may:

  1. declare that the transaction was implemented in violation of the standstill obligation;
  2. impose a fine of up to 10 % of the infringing parties' worldwide group turnover in the last financial year;
  3. order measures to terminate the unlawful implementation of the merger (only in case no subsequent clearance is obtained).
The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Pre-notification phase:

See topic 31.

No fixed duration or deadline

Phase I:

The merger can be cleared either by expiry of the initial review period or by a formal waiver granted by both Competition Authorities.

The FCA will issue a declaratory confirmation of clearance to the notifying party/parties.

Third parties may submit comments to the Competition Authorities regarding the merger within the first two weeks of publication. Third parties do not become parties to the proceeding.

If (i) the Competition Authorities have serious concerns about a merger or (ii) a merger notification is considered incomplete (in particular in case the notifying party/parties fail to comply with a request for information by the Competition Authorities), the Competition Authorities may either request that the cartel court initiates an in-depth examination (phase II) or waive the right to request an in-depth examination in an approval with conditions/commitments. 

4 weeks from receipt of the notification (and after payment of the filing fee) 

Extension: 
2 weeks only upon request of the notifying party/parties

There are no procedural "stop the clock"-options in case the Competition Authorities request additional information or if remedies are offered. In practice, the notifying party/parties in such case sometimes request an extension of the review period or withdraw (and refile) the notification in order to prevent a request for an in-depth (phase II) examination to the cartel court. 

Earlier clearance: 
Earlier clearance can be obtained if a waiver is granted by the Competition Authorities (see topic 38).

Phase II:

Following a request by the Competition Authorities for an in-depth examination of a transaction, the cartel court will either:

1) reject the request for an in-depth examination (in case (i) the transaction does not constitute a merger notifiable under the Cartel Act or (ii) the request(s) are only made after the expiry of the 4 week phase I review period, i.e. after the standstill obligation has ceased to apply); or

2) approve, approve with conditions/commitments or prohibit the merger or the merger filing is rejected in case an incomplete merger notification is not timely supplemented with the legally required information following an order by the presiding judge of the cartel court.

Maximum 5 months after receipt of the first request for an in-depth examination from one of the Competition Authorities by the cartel court

Extension: 
Up to 1 month only upon request of the notifying party/parties

 

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

Austrian merger control applies a dominance test: A transaction has to be cleared if it does not create or strengthen a dominant market position.

An undertaking is considered dominant if (i) it is not subject to any or only insignificant competition or (ii) holds a superior market position in comparison to all other competitors. The Cartel Act provides for a number of rebuttable presumptions of (single or collective) dominance in case certain market share thresholds are exceeded. In particular, a rebuttable presumption of (single) dominance exists in case the market share of an undertaking on the relevant market exceeds 30 %.

Even if a transaction creates or strengthens a dominant position, the cartel court nevertheless must not prohibit the merger if 

  1. it is expected that following such merger also improvements to competitive conditions may occur which outweigh the disadvantages of market dominance; or
  2. such merger is necessary and economically justified to maintain or improve international competitiveness of the undertakings concerned. 

In addition, in case the conditions for clearance under the dominance test are not fulfilled otherwise, the cartel court may clear the merger subject to restrictions or obligations. These remedies may be changed or revoked in case the relevant conditions change after such declaration by the cartel court.

45) May any non-competition issues be considered?

Pursuant to Austrian merger control rules, a transaction which creates or strengthens a dominant position may still be cleared if it is necessary to preserve or enhance the international competitiveness of the undertakings concerned and is justified by national economic considerations. However, so far, to our knowledge no merger creating or strengthening a dominant position has received clearance on the basis of this ground for justification.

In addition to their effects on competition, media mergers must be assessed in terms of their impact on media diversity or plurality in Austria.

46) Special tests or criteria applicable for joint ventures

No (see topic 4).

47) Decisions and remedies/commitments available

Decisions

In phase I, there are no formal decisions clearing or prohibiting a merger. A transaction is cleared by

  1. expiry of the initial review period if the Competition Authorities refrain from submitting a request for an in-depth (phase II) examination of the merger by the cartel court; or
  2. a formal waiver of their right to request in-depth (phase II) examination granted by the Competition Authorities.

The FCA will issue a declaratory confirmation of clearance to the notifying party/parties.

In order that a request for an in-depth (phase II) examination is waived or withdrawn, the concerned undertakings may offer remedies or commitments to the Competition Authorities. Provided that a waiver/withdrawal of a request for an in-depth (phase II) examination is made conditional upon such remedies/commitments, the implementation of the transaction without adherence to these remedies/commitments is prohibited.

In phase II, 

  1. request(s) for an in-depth (phase II) examination of a merger can be rejected in case (a) the transaction does not constitute a merger notifiable under the Cartel Act or (b) the request(s) for an in-depth (phase II) examination are only made after the expiry of the 4 week phase I review period); or
  2. a merger can be (a) cleared or prohibited by a formal decision of the cartel court (also subject to remedies/commitments) or (b) cleared by a withdrawal of the request(s) for an in-depth (phase II) examination by the Competition Authorities or (c) cleared by expiry of the phase II review period without a clearance/prohibition decision being adopted; or
  3. a merger filing can be rejected in case an incomplete merger notification is not timely supplemented with the legally required information following an order by the presiding judge of the cartel court.

Remedies/commitments available

In practice, remedies are usually offered by the concerned undertakings to the Competition Authorities in order (i) to avoid a request for an in-depth examination in phase I or (ii) to obtain a withdrawal of such a request in phase II proceedings. In addition, the notifying party/parties may also propose remedies to the cartel court. 

Commitments can be either structural (e.g. divestment of a business) or behavioural (e.g. "hold separate"-obligations or reporting duties). 

There are no formal deadlines for remedy negotiations/proposals. Remedies can be offered at any stage of the proceedings. However, given the short duration of phase I, in cases that raise substantive issues often discussions on possible remedies/commitments are already commenced in the pre-notification phase if the notifying party/parties want to avoid phase II proceedings.

Non-compliance with remedies/commitments can lead to fines for violation of the standstill-obligation. In addition, in case of a violation of (typically behavioural) commitments after completion of a transaction, the cartel court may impose subsequent measures on the undertakings concerned (non-compliance with such measures is subject to fines).

Publicity and access to the file

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

Shortly after receipt of a merger notification, the FCA publishes a short summary of the transaction on its website. This includes information of the parties concerned, the type of merger and the affected business sector (i.e., generally the information provided under Section 1.2 of the filing form). 

In addition, public announcements are required in the following cases:

  1. Publication of final and binding decisions of the cartel court in an online database (Ediktsdatei) in a non-confidential version;
  2. Information on the FCA website if request(s) for an in-depth (phase II) review of a merger by the cartel court have been made;
  3. Information on the FCA website containing the verdict of a judgment of the cartel court if the cartel court has cleared a transaction only subject to commitments/remedies; and 
  4. Final decisions of the Austrian Supreme Court are also published in an online database according to the Federal law on the Supreme Court (however, unlike publications made by the cartel court where only the non-confidential version of a decision is published, here the entire decision – although with the names of the parties being anonymized – is published). 

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

The merging parties:

The merging parties (i.e., the notifying party/parties as well as the target company) have a right to access as parties of the proceeding. 

Generally, the seller is not a party to the proceedings and therefor has no access to file, as seller usually is not a notifying party and seller’s legal position is not directly influenced by the court's decision in the merger proceedings. 

Third parties:

Under Austrian merger control rules, third parties are not parties to the proceedings and thus do not have access to the file.

Pursuant to the Cartel Act, in phase II proceedings, access to the (court's) file for third parties is subject to all parties' consent (thus, factually restricting third parties from access to file).

Judicial review

50) Who can appeal and what may be appealed?

All parties to the proceeding have the right to appeal final merger decisions by the cartel court to the Austrian Supreme Court within four weeks of receipt. The Austrian Supreme Court must rule on such an appeal within two months of receipt of the file from the cartel court.

Third parties are not considered parties to the proceedings and thus may not appeal any decisions.

Only points of law or fact (provided there are serious doubts arising from the case files as to the accuracy of the facts on which the cartel court's decision is based) may be subject to an appeal. 


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