Merger thresholds
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DENMARK

Jesper Fabricius
Partner, Advokat (L)

jesper.fabricius@accura.dk

Tel: +45 3078 6786

Laurits Schmidt Christensen
Partner, Advokat, LL.M

laurits.schmidt.christensen@accura.dk

Tel: +45 3078 6785

Christina Heiberg-Grevy
Partner, Advokat (L)

christina.heiberg-grevy@accura.dk

Tel: +45 3078 6739

New regulation adopted

A foreign investment regime has been adopted. It enters into force on 1 July 2021 and applies to any investments etc. completed on or after 1 September 2021. 

Confirmed up-to-date: 07/04/2021

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

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. National Merger control regulation was introduced in the Danish Competition Act in 2000 (Part 4 of the Act).

2) Which authorities enforce the merger control regulation?

The Danish Competition Council has the overall responsibility for the enforcement of the Danish Competition Act including the merger regulation provisions contained therein. However, the Danish Competition and Consumer Authority which acts as the secretariat of the Competition Council is responsible for the day-to-day administration and makes most of the decisions, while the Danish Competition Council primarily takes decisions in major cases and cases of fundamental importance. 

Decisions of the Danish Competition Council and the Danish Competition and Consumer Authority may be appealed to the Danish Competition Appeals Tribunal. The decisions of the Competition Appeals Tribunal may be appealed to the ordinary courts in Denmark.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Part 4 of the Danish Competition Act. More detailed rules may be found in various executive orders. Links to the relevant legislation, guidelines and forms are listed here:

Original Danish version Unofficial English translation

Konkurrenceloven (LBK nr. 155 af 1. marts 2018)

The Danish Competition Act (Consolidation Act No 155 of 1 March 2018)

Bekendtgørelse om beregning af omsætning (BEK nr. 1286 af 26. november 2019)

Executive Order on the calculation of turnover 

(NB: A translation of the current version of the Executive Order is not available. The link provided here is to the English translation of the 2009 version of the Executive Order)

Bekendtgørelse om anmeldelse af fusioner (BEK nr. 690 af 25/05/2020)

Bekendtgørelse om ændring af bekendtgørelse om anmeldelse af fusioner (BEK nr. 1040 af 22/06/2020 – containing updated filing forms)

Executive Order on the Notification of Mergers

(NB: A translation of the current version of the Executive Order is not available. The link provided here is to the English translation of the 2013 version of the Executive Order)

Filing forms in Danish are contained as annexes to the Executive Order on the Notification of Mergers  and may also be downloaded in Word format from the Danish Competition and Consumer Authority's website here.

Filing form "full notification"

Filing form "Simplified notification"

(NB: The English versions of the notification forms do not appear to have been updated along with the latest versions in Danish.)

Vejledning om fusionskontrol (September 2020)

The Merger Guidelines (under revision - the link provided here is to the English translation of the 2013 version of the Guidelines)

Vejledning om fusionsanmeldelse og gebyrer (juni 2020)

Guidelines to the Executive Order on Merger Notification and on Merger Fees 

(NB: A translation of the current version of the Guidelines is not available. The link provided here is to the English translation of the 2014 version of the Guidelines)

Vejledning til omsætningsbekendtgørelsen (januar 2020)

Guidelines to the Executive order on Calculation of Turnover (January 2020)

(Translation into English not available yet)

Vejledning om tilsagn i fusionssager (august 2020)

Guidelines about commitments in merger cases (August 2020)

(Translation into English not available yet)

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

Danish competition law must be interpreted in accordance with EU competition law. 

Generally, restrictions of competition that are ancillary to the merger, for instance a standard non-competition obligation on the seller, are considered as integral parts of the merger and are not subject to separate review under the general competition regulation. However, restrictions that go beyond what may be considered directly related to and necessary for the merger may be caught by the general prohibition on anti-competitive agreements.

The general competition regulation may hypothetically be used to oppose a transaction by the authorities. In practice, there are no examples of this. The general prohibition on anti-competitive agreements may be applicable in parallel to full-function joint ventures that have coordination of the market behaviour of the parent companies as their object or effect. 

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

The Danish Competition Act does not authorise split-up decisions irrespective of a merger, and there have been no cases where the Competition Counsel/Danish Competition and Consumer Authority have made such decision or obliged the parties to do so. 

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.)

Telecommunications: 

Since 1 July 2015 Mergers between two or more providers of electronic communications networks and services must be notified to the Danish Business Authority if the aggregate annual turnover in Denmark of all undertakings concerned is at least DKK 900 million and the merger involves a public electronic communications network. 

The Danish Business Authority will refer the merger to the Danish Competition and Consumer Authority, provided the abovementioned conditions are met.

If the turnover threshold in the Danish Competition Act are met, there will be an obligation to notify in accordance with the merger control rules in the Act regardless of whether the sector-specific rules for the telecommunication sector apply. 

Financial businesses:

Mergers involving financial businesses such as banks, insurance companies, credit institutions and investment service companies require approval from the Ministry of Industry, Business and Financial Affairs. The acquisition of 10 % or more of the share capital or voting rights of a financial undertaking or a financial holding company requires permission from the Financial Supervisory Authority. 

Mergers involving financial businesses may in parallel be subject to approval from the Danish Competition and Consumer Authority - with modifications regarding calculation of turnover and temporary ownership of businesses (see topic 18 and 20).

Other:

The list above of relevant authorities is not exhaustive and other authorities may also be of importance, e.g. in sectors where permits or licenses are required to operate a business (e.g. license to manufacture military equipment from the Danish Ministry of Justice).

Foreign investment control

There is currently no general screening regime for foreign investments.

War material:

In accordance with the Danish Act on War Material, approval is required to manufacture war material and a separate approval from the Minister of Justice is required if foreigners obtain decisive influence over a business involved in manufacture of war material. Approval is also required for any subsequent changes in regarding the foreign persons or entities having such decisive influence as well as when such a business moves its domicile out of Denmark.

Power cables and pipelines for transport of foreign-produced hydrocarbons

The Danish Act on the Continental Shelf and certain pipeline installations in the territorial sea stipulates that before granting permission to lay transit power cables or pipelines for transport of foreign produced hydrocarbons on Danish maritime territory, the Minister of Climate, Energy and Supply must obtain a recommendation from the Minister of Foreign Affairs. Permission can only be granted if the Minister of Foreign Affairs considers that a permission is compatible with Denmark's foreign, security and defense policy interests.

Foreign investment control

The Danish Act Danish act on Screening of certain Foreign Direct Investments (the “FDI Act”) enters into force on 1 July 2021 and applies for investments etc. completed on or after 1 September 2021. 

The FDI Act requires notification to and prior approval from the Danish Business Authority of business transfers, asset transfers, investments in ownership interests, certain loan agreements and other types of agreements (including agreements to establish a completely new business), provided that

  1. the acquirer/investor/contracting party is domiciled outside Denmark, or if a foreign national or entity has direct or indirect control or significant influence over the acquirer/investor, and
  2. the transfer/investment/agreement concerns "particularly sensitive sectors and activities"

The Danish Business Authority has extended powers with respect to investors domiciled outside the EU/EEA (and for any investors under direct or indirect control or significant influence of a national or entity outside the EU/EEA). For such investors, the abovementioned notification requirement also includes "special economic agreements". Furthermore, in respect of investors domiciled outside the EU/EEA the Authority may intervene against foreign direct investments etc., which do not concern "particularly sensitive sectors and activities", but which may pose a threat to national security or public order. There is no obligation for prior notification and approval in this respect, but it is possible to make a voluntary notification.

Particularly sensitive sectors and activities

The FDI Act defines the following as "particularly sensitive sectors and activities":

  • defense
  • IT security functions
  • processing of classified information
  • products with double application (civil and military purposes)
  • other critical technology
  • critical infrastructure

The listed sectors/activities will be further defined in an executive order. This executive order has not yet been issued, but a draft has been submitted for public consultation  and a final version is expected to be issued before 1 July 2021.

Investments types and thresholds

Investments

The notification obligation not only covers cases of acquisition of ownership interests, but may also include acquisition of assets, granting of long-term loans, etc. The notification obligation also includes greenfield investments, i.e. investment in a completely new business.

The notification obligation includes not only cases where an investor obtains control, but also cases where an investor acquires at least 10% of the ownership shares or voting rights or acquires similar control by other means. Warrants and call options must be included in the calculation as well ownership shares, voting rights or similar control by related parties. The notification obligation applies again in the event of subsequent increases of the ownership share to 20%, 1/3, 50%, 2/3 or 100% of the ownership shares or voting rights.

Special economic agreements

As mentioned above, if the foreign investor is domiciled outside the EU/EEA (or a non-EU/EEA national or entity has direct or indirect control or significant influence over the acquirer), the notification obligation is extended to also cover "special economic agreements" if the foreign investor thereby gains control or significant influence over a business. “Special economic agreements” may be agreements on a joint venture as well as operating, supply and service agreements.

Process:

Preliminary assessment

A foreign investor may request a preliminary assessment from the Danish Business Authority as to whether an intended foreign direct investment, etc. or special economic agreement relates to critical technology or critical infrastructure.

Notification and approval

The Danish Business Authority generally has 60 working days from receipt of a complete notification to either permit the investment or notify the applicant that the case will be submitted to the Minister of Business and Industry for consideration. Notification may be submitted in Danish or English. The deadline for the Danish Business Authority's position may be extended to up to 90 days and extended further at the request of the foreign investor, for instance if the foreign investor offers commitments to address concerns that the Danish Business Authority may have with respect to the planned investment/agreement.

If the case is submitted to the Minister of Trade and Industry, there is no deadline for the Minister's decision.

Criteria

The criteria for whether an investment can be approved are only very broadly described in the FDI Act. Thus, "all relevant circumstances and available information" can be taken into account in relation to whether the foreign investor can be approved. However, the main criteria are

  1. whether the foreign investor is directly or indirectly controlled by a foreign government, foreign government agencies or foreign armed forces;
  2. whether the investor in question has been involved in activities affecting security or public order in an EU Member State or in other friendly and allied countries;
  3. whether there is a serious risk that the foreign investor is engaged in or associated with illegal or criminal activities of national security or public order; and
  4. whether there are indications that the foreign investor is knowingly trying to circumvent the screening rules.

Investments not concerning "particularly sensitive sectors and activities"

In relation to foreign investors who are domiciled outside the EU / EEA (or if a national or entity outside the EU / EEA has direct or indirect control or significant influence over the acquirer), the Danish Business Authority may also intervene against already made foreign direct investments, etc., which do not concern "particularly sensitive sectors and activities", but which may pose a threat to national security or public order.

The possibility of intervention presupposes that the foreign investor acquires possession of or control over at least 25% of the ownership interests or voting rights in the company or equivalent control by other means.

There is no obligation for prior notification and approval, but it will be possible to voluntarily notify the investment in order to obtain approval.

 The criteria for whether an investment can be approved are the same as for investment in "particularly sensitive sectors and activities".

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

The Danish Competition Act only covers Denmark and not the Faroe Islands or Greenland. The Faroe Islands and Greenland each have their own separate competition laws and merger control regimes. 

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory if the applicable thresholds are met.

Types of transactions to file – what constitutes a merger

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

According to the Danish Competition Act a merger subject to merger control is defined as a transaction whereby:

  1. two or more previously independent undertakings amalgamate into one undertaking; or 
  2. one or more persons who already control at least one undertaking, or one or more undertakings – by an agreement to purchase shares or assets or by any other means – acquire direct or indirect control of the entirety of, or parts of, one or more other undertakings; or
  3. a joint venture that will perform all the functions of an independent business entity on a lasting basis.

Note that certain transactions of a temporary nature are not subject to merger control (see topic 19 and 20).

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

Yes, generally a merger will only be considered to take place if the transaction results in a lasting change of control over a business.

Transactions that result in the establishment of a new business (a joint venture) controlled by two or more businesses or persons already controlling one or more businesses will also constitute a merger.

11) How is “control” defined?

The Danish Competition Act states that “control” of an undertaking is obtained through rights or agreements or any other means which, either separately or in combination, will make it possible to exert decisive influence on the operations of an undertaking.

Control may be held solely by one person or business or jointly by several persons and/or businesses. Establishment of joint control as well as changes in the group of owners with a controlling interest constitute change of control. Consequently, there is a change of control when a business goes from 50/50 ownership to being solely controlled by only one of the existing owners, or when one of the existing owners sells its share to a third party. However, a reduction in the number of jointly controlling shareholders normally does not lead to a change of control if it does not lead to a change from joint to sole control.

Joint control may be established between a majority and a minority shareholder on the basis of veto rights regarding decisions that are essential for the strategic operation of the business. A merger will occur when the joint control is established and again when it is dissolved; for instance, if a minority shareholder gives up certain essential veto rights so that the majority shareholder gains sole control.

"Control" and "Change of control" are interpreted according to EU competition law, including the EU Commission’s Consolidated Jurisdictional Notice.

12) Acquisition of a minority interest

Acquisition of a minority interest that does not result in anyone obtaining control over a business (i.e. a non-controlling minority interest) is not subject to merger control.

However, if the acquisition of a minority interest confers de facto control of a business, the transaction may 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. Change from joint to sole control;
  3. Dissolution – provided (part of) the business of the joint venture is transferred to one or more of the businesses controlling the joint venture or to a third party; 
  4. Change in or extension of the activities of a joint venture – provided that further assets, contracts, know-how, rights etc. are transferred to the joint venture to form the basis for the new activities; 
  5. 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 not “full function” if it does not perform all the functions of an autonomous economic entity on a lasting basis and therefore is not subject to merger control. However, the joint venture may be assessed under the general prohibition on anti-competitive agreements. Whether a joint venture is considered “full function” depends on the level of the joint venture’s dependence on its parent companies and whether 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?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger notification must be filed if:

  1. the combined total annual turnover in Denmark of all undertakings concerned is at least DKK 900 million and the total annual turnover in Denmark of each of at least two of the undertakings concerned is at least DKK 100 million; or
  2. the total annual turnover in Denmark of at least one of the undertakings concerned is at least DKK 3.8 billion and the total annual worldwide turnover of at least one of the other undertakings concerned is at least DKK 3.8 billion.

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

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.

Telecommunication:

With regard to the telecommunication sector, transactions that do not fulfil the general turnover thresholds set out in topic 14 will still be subject to merger control if the aggregate annual turnover in Denmark of all undertakings concerned is at least DKK 900 million and if the transaction involves a public electronic communication network. In other words, telecommunication transactions may be subject to merger control even where one of the parties, e.g. the target company only has limited turnover in Denmark. The Danish Business Authority will not handle the merger itself but will refer the case to the Danish Competition and Consumer Authority. 

16) Rules on calculation and geographical allocation of turnover

Rules on calculation and geographical allocation of turnover are set out in the Executive order on the calculation of turnover in the Competition Act. These rules must be interpreted in accordance with the European Commission’s Consolidated Jurisdictional Notice.

Turnover is calculated on the basis of the most recent audited accounts of the undertakings concerned as well as any undertakings associated with each undertaking concerned, including any direct or indirect parent companies, subsidiaries, joint ventures and subsidiaries of parent companies.

In exceptional circumstances, other accounting data or another accounting period may be relied upon in order to determine a merger filing obligation is triggered by the transaction. However, in practice no deviations due to exceptional circumstances have been seen. 

The turnover of a joint venture must be allocated equally between the controlling owners irrespective of their ownership share, i.e. if the shares in a joint venture are divided 60/40 between two participants who exert joint control, half of the turnover of the joint venture must be attributed to each participant.

"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).

Turnover must be adjusted to take account of any permanent changes to the businesses of the undertakings concerned, such as divestments or acquisitions of businesses after the end of the financial year that are not fully reflected in the audited accounts. Any adjustment must reflect the entire period of the financial statements.

As regards the geographical allocation of the turnover, the general rule for products sold and services provided is that the turnover should be attributed to the place where the customer is located. The underlying principle is that turnover should be allocated to the place where competition for the customer in question took place. Please refer to The European Commission’s Consolidated Jurisdictional Notice.

17) Special rules on calculation of turnover for particular businesses

Businesses owned by the State/central authorities
For businesses owned by the State/central authorities the aggregate gross operational expenditure of the relevant Ministry in the preceding accounting year is used as a proxy for turnover to determine whether the thresholds are met.

Businesses owned by local and regional authorities
For businesses owned by local or regional authorities the aggregate gross operational and investment expenditure of the relevant local or regional authority in the preceding accounting year is used as a proxy to determine whether the thresholds are met. However, if a municipal partnership presents its accounts in accordance with the Danish Financial Statements Act, the turnover calculation will be made in accordance with the general rule described under topic 16.

Insurance undertakings
For an insurance undertaking the value of the gross premiums written is used as a proxy to determine whether the thresholds are met. The gross premium written includes all premiums received by the undertaking the relevant year. Amounts paid by the undertaking for reinsurance are not deducted.

Credit institutions and other financial undertakings
The relevant turnover used as a proxy to determine whether the thresholds are met is calculated as the sum of:

  1. Interest income and similar income;
  2. Income from shares; 
  3. Fees and commissions receivable;
  4. Net profit on financial operations; and 
  5. Other operating income.

The turnover is to be allocated to the branch or division established in Denmark which receives this income.

Trade associations and comparable associations
Turnover is calculated as the combined turnover of all undertakings that are members (as well as their associated undertakings) and the turnover of the association itself – with deduction of any turnover among the members and among the members and the association.

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

If two or more transactions take place between the same persons or undertakings within a two-year period, these must be treated as one transaction. 

Moreover, transactions that are linked by conditions must be treated as one if control in each transaction is acquired ultimately by the same undertaking(s).

See also topic 19 regarding temporary control.

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 temporary change of control, a merger filing is not required. An example is where several undertakings jointly acquire control of another undertaking but pursuant to a pre-existing plan immediately after completion split the assets of the undertaking. In that situation, the acquisition of temporary joint control will not be subject to merger filing, but the subsequent split-up of the assets (on a lasting basis) may require one or several merger filings. As regards this scenario, the EU Commission considers that the maximum timeframe for the division of the assets should be one year for the acquisition of control to qualify as temporary (see the Consolidated Jurisdiction Notice). 

20) Special industries, owners or types of transactions

The Danish Competition Act specifies that there is no obligation to file a merger notification in the following situations:

  1. Where credit institutions, other financial undertakings or insurance companies whose normal activity includes transactions and dealing in securities for their own account or for the account of others are temporarily in possession of interests which they have acquired in an undertaking with the intention to resell these, provided always that they do not exercise the voting rights attached to these interests for the purpose of determining the competitive conduct of that undertaking or  exercise voting rights exclusively with the aim of preparing the disposal of all or part of that undertaking or its assets or shares held and that the disposal takes place within one year of the date of acquisition;
  2. Where control is acquired by a professional who has powers under current insolvency legislation to deal with and dispose of the undertaking; or
  3. Where the transactions – where one or more persons acquire direct or indirect control of the entirety of or parts of one or more other undertakings - are carried out by holding companies (as defined in the EU Annual Accounts Directive), subject to the restriction, however, that the voting rights attached to the shares in their possession, especially in relation to the appointment of members of the management and supervisory bodies of the undertakings in which the shares are held, are exercised with the purpose to retain the full value of these investments and not to determine directly or indirectly the competitive conduct of these undertakings.

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 regardless of where the undertakings concerned are registered, operate or own assets.

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/or 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 Danish merger control rules do not apply if the thresholds for EU merger control are exceeded, unless the European Commission refers the merger to the Danish Competition and Consumer Authority.

Merger control even if thresholds are NOT met

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

No. The Danish Competition and Consumer Authority will only review a merger notification if the thresholds are met or if a referral from the European Commission allows it to review the notification.

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

Only in the case of referral from the Danish Business Authority or the European Commission (see topic 26 and 27).

Referral to and from other authorities

26) Referral within the jurisdiction

The Danish Competition and Consumer Authority may review a merger involving two or more businesses that provide electronic communications networks based on referral from the Danish Business Authority. Special thresholds apply for mergers within the telecommunication sector (see topic 15).

27) Referral from another jurisdiction

The Danish Competition and Consumer Authority only accepts referral of mergers from the European Commission.

The European Commission may refer a merger in whole or in part to the Danish Competition and Consumer Authority where the merger in question affects a distinct market within Denmark. In such case the Danish Competition and Consumer Authority may review the merger even if the thresholds for merger notification in Denmark are not exceeded. In the case of a partial referral, the European Commission will assess the non-Danish aspects of the merger, whereas the Danish Competition and Consumer Authority will assess the Danish aspects.

A referral of a merger from the European Commission may be requested either by the Danish Competition and Consumer Authority or by the notifying parties.

28) Referral to another jurisdiction

If the thresholds for merger notification are met in at least three EU member states, the parties may request 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).

The Danish Competition and Consumer Authority 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 Denmark. Such a request shall be made within 15 working days of the date on which the merger was notified to the Danish Competition and Consumer Authority. The European Commission shall immediately notify the other EU member states of the request and will decide whether to examine the merger within 25 days after this notification.

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

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

Referral to the Danish Competition and Consumer Authority:
If a merger is subject to EU merger control the parties may – prior to an EU merger notification – request that the merger is referred to the Danish Competition and Consumer Authority provided that the merger may significantly affect competition in a distinct market in Denmark. If the Danish Competition and Consumer Authority does not oppose such referral, the European Commission may decide to refer the merger in whole or in part.

The European Commission may also, on its own initiative or upon request from the Danish Competition and Consumer Authority, decide to refer a merger that has already been notified to the European Commission to the Danish Competition and Consumer Authority. 

Referral from the Danish Competition and Consumer Authority:
If a merger is subject to merger control in Denmark and at least two other EU member states, the parties may request that a single merger notification is made to the European Commission in place of the notifications to each of the relevant national authorities. If none of the relevant authorities oppose the referral, the European Commission will handle the merger notification and no notifications are required in Denmark or any other EU member state. If any of the national authorities in question oppose the referral within 15 working days, the merger must be notified to each of the relevant national authorities.

Filing requirements and fees

30) Stage of transaction when notification must be filed

A merger notification must be filed when a binding agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired, and before the transaction is implemented by the parties.  

Formally, a binding agreement must have been concluded before a notification can be made to the Danish Competition and Consumer Authority. The Danish Competition and Consumer Authority is likely to handle a draft notification in the pre-notification phase where it is not required that a binding agreement has been concluded. 

31) Pre-notification consultations

It is advisable and customary to engage in pre-notifications discussions with the Danish Competition and Consumer Authority. Usually, the parties will submit a couple of draft notifications before the authority informs the parties that the notification is ready to be formally submitted.

The deadlines for the Danish Competition and Consumer Authority will commence from the time that the notification is accepted as 'complete' by the Danish Competition and Consumer Authority and the filing fee is paid. 

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

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified after the acquisition/publication of the takeover bid. 

The acquisition/takeover bid may be implemented before approval from the Danish Competition and Consumer Authority has been obtained, provided that the merger is immediately notified to the Danish Competition and Consumer authority and that the acquirer does not exercise the voting rights attached to the securities in question or only does so to maintain the full value of his investment and on the basis of an exemption granted by the authority.

Please also note that securities law regulations apply to acquisitions of listed shares and public takeover bids, including a requirement for approval of offer documents from the Financial Supervisory Authority prior to being made available to the public. 

33) Forms available for completing a notification

There are two forms available: one for a simplified notification and one for a full notification. Both are available in Danish and English versions (see links under topic 3).

Simplified notification is possible in each of the following cases:

Mergers in which two or more undertakings acquire joint control of an undertaking or establishes a full-function joint venture which has no, or negligible, actual or foreseen activities in Denmark. Such cases occur where: 

  1. the turnover of the joint venture and/or the turnover of the transferred activities is less than DKK 100 million in Denmark, annually; and 
  2. the total value of the assets transferred to the joint venture is less than DKK 100 million in Denmark. 

Mergers in which one undertaking acquires sole control of another undertaking over which it already has joint control with one of more other undertakings. 

Mergers in which two or more undertakings are merged or one or more undertakings acquire sole or joint control of another undertaking and in which:

  1. none of the parties to the merger are engaged in business activities in the same product and in the same geographical market comprising of Denmark or part hereof or in a product market which is downstream or upstream from a product market and geographical market comprising of Denmark or part hereof in which another party to the merger is engaged; or
  2. the combined market share is less than 15% for all the parties to the merger which are engaged on the same products market and geographical market comprising Denmark or part hereof (horizontal overlaps); or
  3. the individual or combined market shares is less than 25% for all the parties to the merger which are engaged in business activities in a product market which is upstream or downstream from a product market in which another party to the merger operates on a geographical market comprising of Denmark or part hereof (vertical links). (It should be noted that the wording of the Executive Order on the Notification of Mergers is not very clear with respect to the scope of this last situation where simplified notification is accepted).

Note, however, that the Danish Competition and Consumer Authority may always request a full notification, even if the conditions for a simplified notification are satisfied, and even after having accepted and declared a simplified notification complete -  as long as the merger has not been approved.

34) Languages that may be applied in notifications and communication

Danish and English. Formally, the parties to the merger need prior consent from the Danish Competition and Consumer Authority to submit a notification in English.

35) Documents that must be supplied with notification

The relevant documents that must be submitted with the notification depends on whether it is a full or simplified filing. The notification forms state the documents required (see topic 3 for relevant link to the notification forms). Failure to provide any of the required documentation may lead to the notification being declared as incomplete.

The following documents should generally always be supplied with a merger notification whether simplified or full:

  1. the most recent audited annual financial statements and annual reports for each of the parties to the merger. Where undertakings have been sold or acquired after the conclusion of the most recent financial year, documentation must be enclosed; 
  2. all documents concerning the merger, regardless of whether the merger is brought about by agreement between the parties to the merger, acquisition of a controlling interest or a public takeover bid;
  3. group chart/overview for each of the parties to the merger;
  4. non-confidential version of the notification (to be supplied to third parties); and
  5. documentation of payment of the applicable filing fee.

For full notification, a range of further documents must be supplied with the merger notification, including analyses, reports, surveys, minutes of board meetings and similar documents related to the merger and the relevant markets. Further, an index of such documents must be prepared. 

36) Filing fees

The filing fee for simplified notifications is DKK 50,000.

The filing fee for a full notification is 0.015% of the combined total annual turnover in Denmark of all undertakings concerned; however, the filing fee is subject to a cap of 1.5 MDKK.

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. Completion of the merger prior to the merger approval is subject to fines. However, normal preparatory reversible steps are not prohibited (see topic 39).

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

Yes, the parties can get permission from the Danish Competition and Consumer Authority on a case-by-case basis. 

The Danish Competition and Consumer Authority’s Merger Guidelines (only the Danish language version) contain the following examples of permissions that have been previously granted to partly implement a merger prior to obtaining approval:

  1. initiation of negotiations with distributors;
  2. taking over rights and obligations in a supply contract in a case where the merging contract party had been taken under receivership;
  3. establishment of a joint venture including the hiring of management, procurement of IT and signing of contracts with transporters; and
  4. entering into supply contracts.

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that safeguard against commercially sensitive information being used for purposes other than assessing the merger.

There are no guidelines on what may be considered acceptable preparatory steps; however, Danish law must be interpreted on the basis of EU law in this regard. 

Preparation of integration of internal functions such as IT and HR is generally acceptable.

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

An "ordinary course of business" clause that prevents the target company from taking decisions outside the course 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.

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

There are no specific rules nor case law on “carve out” of the Danish part of a transaction to avoid delaying implementation in the rest of the world due to a pending approval in Denmark.

42) Consequences of implementing without approval/permission

The parties may be fined if the merger is implemented before approval is obtained. The amount of the fine will be fixed based on the nature, gravity and duration of the infringement, and the fine cannot exceed 10% of the parties’ worldwide turnover.

Furthermore, the merger may be prohibited, and the Danish Competition and Consumer Authority may order the parties to roll back the transaction, i.e. split up the merged entity or take any other measures necessary to restore efficient competition.

The process – phases and deadlines

43) Phases and deadlines

Phase Duration/deadline

Pre-notification phase:

It is advisable to inform the Danish Competition and Consumer Authority of the intended transaction at an early stage and to enter into pre-notification consultations that will include submitting one or more draft notifications. 

No fixed duration or deadline

Assessment of completeness of notification:

When the merger notification has been submitted, the Danish Competition and Consumer authority must assess whether the notification is complete or if further information is required within 10 working days. 

Even when the notification has been declared complete, the authority may still request more information and documentation and the authority can at any time until the merger has been approved request a full notification, even if a simplified notification has already been accepted and declared complete. The Merger Guidelines explains that if a merger has been notified by means of the simplified notification form and the Competition and Consumer Authority has demanded a full notification of the merger after the notification is deemed complete, the days which have already passed in Phase I will be deducted from the ‘new’ Phase I, when the time-limits start to run in connection with the submission of a complete full notification.

10 working days.

Extension:
If the notification is declared incomplete, the authority will have another 10 working days to assess completeness when supplementary information has been submitted. In practice, it may take several weeks for the Danish Competition and Consumer authority to actually declare a notification complete.

Phase I:

The merger is either approved or it is decided to initiate a phase II investigation of the merger.

Complex and/or problematic mergers will often require the longer deadlines applicable in phase II.

25 working days from the receipt of a complete notification. 

Extension:
10 working days if commitments are offered.

"Stop the clock"-option: 

If the parties have not provided the requested information in accordance with the Danish Competition Act's section 17, the Danish Competition and Consumer Authority can pause the deadlines until the required information is provided.  

Phase II:

The merger is either approved, approved with conditions/commitments or prohibited.

The Danish Competition and Consumer Authority will provide the parties with a preliminary statement of concerns within 5 working days after initiating phase II.

The investigation is likely to involve detailed market surveys, economic analysis and possibly negotiation of commitments to address the concerns of the Danish Competition and Consumer Authority.

In its Guidelines on commitments in merger cases, the Danish Competition and Consumer Authority states that negotiation of commitments will normally take at least 1-2 months.

 

90 working days from the date when the phase II investigation was initiated.

Extension:
There are two extension options (which may be combined):

  1. 20 working days if commitments are offered by one of the parties at a time when 70 days have passed since the decision to initiate phase 2. Commitments offered later than 90 days after initiating phase 2 will normally not be considered.
  2. Up to 20 working days if the notifying parties request or accept such extension.

"Stop the clock"-option: 

If the parties have not provided the requested information in accordance with the Danish Competition Act's section 17, the Danish Competition and Consumer Authority can suspend the deadlines until the required information is provided.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger will "significantly impede effective competition in particular due to the creation or strengthening of a dominant position".

A range of factors may be taken into consideration, including efficiencies that may be gained from the merger (efficiency defence) and whether one of the parties is likely to fail as an independent business (failing firm defence).

45) May any non-competition issues be considered?

No.

46) Special tests or criteria applicable for joint ventures

The assessment for joint ventures is the same as for other mergers, but if the joint venture also has coordination between the owners as its object or effect, it will also be assessed whether such coordination is acceptable under the general prohibition against anti-competitive agreements.

47) Decisions and remedies/commitments available

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

If the Danish Competition and Consumer Authority expresses serious concerns about the merger, it is important that the parties enter into negotiations of possible commitments well before the expiry of the deadlines as the authority will only consider an approval with conditions if the parties have offered commitments.

Commitments may take any form and they can be either structural or behavioural and with or without time limitations. The Danish Competition and Consumer Authority has issued Guidelines on commitments in merger cases describing its approach to and the process regarding commitments.

The Danish Competition and Consumer 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.

Publicity and access to the file

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

The Danish Competition and Consumer Authority will generally make a public announcement when it has received a merger notification and again when a decision has been made. The latter announcement will include a non-confidential version of the decision that will be published on the website of the authority. The level of detail of decisions varies considerably depending on the parties and their activities. 

Time and content of announcements will be coordinated with the parties. To protect business secrets, the parties are requested to provide a non-confidential description of the transaction with the notification and to identify any confidential information in the notification and the final decision.

Often the parties will agree to a public announcement during the pre-notification phase to allow the Danish Competition and Consumer authority to invite comments from third parties at an early stage.

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

The merging parties:

The merging parties have a right to access to the file including market survey questionnaires as well as an overview of all documents/correspondence in the file. However, the authority may redact third parties’ confidential information, often including the identity of such third parties. There is no right of access to the Danish Competition and Consumer authority’s internal documents and correspondence.

Third parties:

Only parties who have a substantial, direct and individual interest in the decision to be made will be granted access to the file. In practice, it is unlikely that anyone but the merging parties will be granted access to the file. 

The Danish Competition and Consumer Authority may, however, decide to provide third parties with a non-confidential version of the notification and other documents in connection with its market surveys.

Judicial review

50) Who can appeal and what may be appealed?

The merging parties can generally appeal any decisions by the Danish Competition and Consumer Authority or the Danish Competition Council to the Danish Competition Appeals Tribunal including conditions contained in an approval decision – even if they are based on commitments suggested by the parties themselves. The parties may also appeal the Danish Competition Appeals Tribunal's decisions to the ordinary courts. 

Any appeal of decisions before the Danish Competition and Consumer Authority or the Danish Competition Council has either approved or prohibited the merger will mean that the applicable deadlines will be put on hold until the Tribunal has made a decision.


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